Indian semiconductor ecosystem: News, Updates & Discussions.

This is HUGE

@Ashwin @Gautam @randomradio

Tata Electronics inks deal with Tesla for semiconductor chips ahead of Elon Musk India visit: Report​


US EV automaker Tesla has signed a strategic deal with Tata Electronics to acquire semiconductor chips for its worldwide operations, according to a report by The Economic Times. The reported deal, which was executed discreetly as per the report, shows Tesla is interested in building a supply chain in India that goes beyond local revenue generation.

This comes in the backdrop of the EV automaker's chief Elon Musk's reported visit to India, where he will meet Prime Minister Narendra Modi and is expected to announce potential Indian investments.

More:
www.moneycontrol.com

Tata Electronics inks deal with Tesla for semiconductor chips ahead of Elon Musk India visit: Report

The Tesla chief will meet Prime Minister Narendra Modi and is expected to announce potential investments in India
www.moneycontrol.com www.moneycontrol.com
Original report for those with subscription:

economictimes.indiatimes.com

ET exclusive: Tata Electronics seals semicon deal with Tesla

The US-based electric vehicle (EV) major is keen to enter India, the worlds fastest-expanding major automotive market. Tesla promoter Elon Musk is reportedly visiting India this month for a meeting with Prime Minister Narendra Modi. Musk is expected to announce potential Indian investments...
economictimes.indiatimes.com economictimes.indiatimes.com

The 22-28nm fab being built by Tata will ensure India commands a sizeable market share in the medium-end (automotive, IoT etc.) of the semiconductor space across the world.
 
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Parthu said:
This is HUGE

@Ashwin @Gautam @randomradio

Tata Electronics inks deal with Tesla for semiconductor chips ahead of Elon Musk India visit: Report​


US EV automaker Tesla has signed a strategic deal with Tata Electronics to acquire semiconductor chips for its worldwide operations, according to a report by The Economic Times. The reported deal, which was executed discreetly as per the report, shows Tesla is interested in building a supply chain in India that goes beyond local revenue generation.

This comes in the backdrop of the EV automaker's chief Elon Musk's reported visit to India, where he will meet Prime Minister Narendra Modi and is expected to announce potential Indian investments.

More:
www.moneycontrol.com

Tata Electronics inks deal with Tesla for semiconductor chips ahead of Elon Musk India visit: Report

The Tesla chief will meet Prime Minister Narendra Modi and is expected to announce potential investments in India
www.moneycontrol.com www.moneycontrol.com
Original report for those with subscription:

economictimes.indiatimes.com

ET exclusive: Tata Electronics seals semicon deal with Tesla

The US-based electric vehicle (EV) major is keen to enter India, the worlds fastest-expanding major automotive market. Tesla promoter Elon Musk is reportedly visiting India this month for a meeting with Prime Minister Narendra Modi. Musk is expected to announce potential Indian investments...
economictimes.indiatimes.com economictimes.indiatimes.com

The 22-28nm fab being built by Tata will ensure India commands a sizeable market share in the medium-end (automotive, IoT etc.) of the semiconductor space across the world.
Click to expand...

Tata's going nuts for electronics. Once the factory is built, I hope they try and move up the value chain.
 
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randomradio said:
Tata's going nuts for electronics. Once the factory is built, I hope they try and move up the value chain.
Click to expand...

India is going to have an ecosystem at every step of the value chain - Design, Fab, Packaging & Testing.

economictimes.indiatimes.com

How India is spreading itself across the chip-making value chain

India's semiconductor ambitions have taken a significant leap with Prime Minister Modi inaugurating three new manufacturing and assembly facilities in Gujarat and Assam. With a strong focus on becoming a global semiconductor hub, India aims to establish a robust presence across the chip value chain.
economictimes.indiatimes.com economictimes.indiatimes.com

Some of it (like design) we already have significant capabilities, though so far they've mostly remained catering to design-outsourcing contracts from major Western firms like Intel/Qualcomm.

That might change in the coming years...maybe not so much at the consumer-facing level, but definitely for the business-facing requirements:


Pretty soon I'd bet most of the large firms involved in high-end engineering (L&T, Godrej, Tata etc) would be developing their own in-house design capabilities to create custom chips & SoCs needed for their unique use-cases, either for internal requirements (e.g. factory automation) or to support the specific products/services they supply the customers.

As of the various levels of Fabs themselves (high, medium & low-end), we're already making a huge play into the medium-end segment (20-65nm) which by now looks like will become a crucial part of global supply chains in that segment. We now need to clear investments for fabs in the low-end segment (>65nm) which covers things like chips that go in controllers for countless electronics. I think we'll cover this after elections are done with. Additional medium-end proposals (like Tower's 40-65nm) will also be looked at.

If we can capture a sizeable portion of the medium & low-end segment, we're golden.

Going into the high end (right now <14nm) is beyond our financial means to subsidize for the foreseeable future. All of the new high-end fabs coming up to develop alternatives for Taiwan are going to likes of US, Japan & Europe.

It'll be a long while before we can compete in that segment...but the world needs all kinds of chips. Even a device that uses the latest 4nm CPU will need a dozen 65nm chips around it to support other functions. If we can become the world's go-to supplier for that medium & low-end (we have the potential scale to out-compete everyone else including SE Asia if we keep this up, only China could do it better than us but the West & West-aligned markets will be going away from them due to strategic reasons), we can create employment for millions & add trillions to the GDP.

It won't be economical to produce the mid & low-end in developed countries, so they have to buy them from someone - that's our ticket.
 
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Parthu said:
India is going to have an ecosystem at every step of the value chain - Design, Fab, Packaging & Testing.

economictimes.indiatimes.com

How India is spreading itself across the chip-making value chain

India's semiconductor ambitions have taken a significant leap with Prime Minister Modi inaugurating three new manufacturing and assembly facilities in Gujarat and Assam. With a strong focus on becoming a global semiconductor hub, India aims to establish a robust presence across the chip value chain.
economictimes.indiatimes.com economictimes.indiatimes.com

Some of it (like design) we already have significant capabilities, though so far they've mostly remained catering to design-outsourcing contracts from major Western firms like Intel/Qualcomm.

That might change in the coming years...maybe not so much at the consumer-facing level, but definitely for the business-facing requirements:


Pretty soon I'd bet most of the large firms involved in high-end engineering (L&T, Godrej, Tata etc) would be developing their own in-house design capabilities to create custom chips & SoCs needed for their unique use-cases, either for internal requirements (e.g. factory automation) or to support the specific products/services they supply the customers.

As of the various levels of Fabs themselves (high, medium & low-end), we're already making a huge play into the medium-end segment (20-65nm) which by now looks like will become a crucial part of global supply chains in that segment. We now need to clear investments for fabs in the low-end segment (>65nm) which covers things like chips that go in controllers for countless electronics. I think we'll cover this after elections are done with. Additional medium-end proposals (like Tower's 40-65nm) will also be looked at.

If we can capture a sizeable portion of the medium & low-end segment, we're golden.

Going into the high end (right now <14nm) is beyond our financial means to subsidize for the foreseeable future. All of the new high-end fabs coming up to develop alternatives for Taiwan are going to likes of US, Japan & Europe.

It'll be a long while before we can compete in that segment...but the world needs all kinds of chips. Even a device that uses the latest 4nm CPU will need a dozen 65nm chips around it to support other functions. If we can become the world's go-to supplier for that medium & low-end (we have the potential scale to out-compete everyone else including SE Asia if we keep this up, only China could do it better than us but the West & West-aligned markets will be going away from them due to strategic reasons), we can create employment for millions & add trillions to the GDP.

It won't be economical to produce the mid & low-end in developed countries, so they have to buy them from someone - that's our ticket.
Click to expand...

The West is ensuring India doesn't get much of the high-end segment although we are pretty much the most ideal location.

The low to mid end segment will take care of our industry for the next decade. But I don't think we can compete with anybody else when it comes to silicon at the high end. We are gonna have to shift our focus to gallium and boron.

The US currently isn't a good place either, due to DEI, their quota system. So companies are moving to Japan.

We need to develop and produce our own AI chips too.
 
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randomradio said:
The West is ensuring India doesn't get much of the high-end segment although we are pretty much the most ideal location.
Click to expand...

There is that, but then again setting up high-end fabs would have required us to put up subsidies of a whole other league that we can't afford.

And it would have made no economic sense because unlike Taiwan which pretty much monopolized the global market for high-end, the reshoring that's happening now is highly fragmented. US would still have been buying only US-made chips, Europe European-made & Japan Japanese-made. Even their plans like CHIPS Act make no economic sense - they fly directly in the face of the free market.

They're just doing it for strategic reasons, and they can afford to take the financial hit because their economies are very high value-added unlike ours.

We simply wouldn't have had a big enough market to sell those high-end chips into, and as a result the fabs would be forced to run at huge losses.

We have to exploit the segment of the market where we have a competitive advantage. Cannot just blindly flail at everything. Especially when we are new to the sector and have no legs to stand on yet.
 
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Parthu said:
There is that, but then again setting up high-end fabs would have required us to put up subsidies of a whole other league that we can't afford.

And it would have made no economic sense because unlike Taiwan which pretty much monopolized the global market for high-end, the reshoring that's happening now is highly fragmented. US would still have been buying only US-made chips, Europe European-made & Japan Japanese-made. Even their plans like CHIPS Act make no economic sense - they fly directly in the face of the free market.

They're just doing it for strategic reasons, and they can afford to take the financial hit because their economies are very high value-added unlike ours.

We simply wouldn't have had a big enough market to sell those high-end chips into, and as a result the fabs would be forced to run at huge losses.

We have to exploit the segment of the market where we have a competitive advantage. Cannot just blindly flail at everything. Especially when we are new to the sector and have no legs to stand on yet.
Click to expand...

We have no legs to stand on anyway. All that we plan on setting up is coming from outside the country, including low-end.

Companies have been allowed to set up low and mid-end capabilities in India, but high-end has been denied even though we can absorb that tech. This is all ToT and screwdrivergiri.

The market already exists, the whole world. But, even if we dole out more cash, they are not gonna allow it. These are protected technologies.
 
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randomradio said:
We have no legs to stand on anyway. All that we plan on setting up is coming from outside the country, including low-end.

Companies have been allowed to set up low and mid-end capabilities in India, but high-end has been denied even though we can absorb that tech. This is all ToT and screwdrivergiri.

The market already exists, the whole world. But, even if we dole out more cash, they are not gonna allow it. These are protected technologies.
Click to expand...

If you take US, Europe, Japan & China out of the equation because they'll all be buying their own chips, there's nowhere else that we can sell high-end chips into.

Who else is building stuff that requires high-end chips? Africa?
 
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Parthu said:
If you take US, Europe, Japan & China out of the equation because they'll all be buying their own chips, there's nowhere else that we can sell high-end chips into.

Who else is building stuff that requires high-end chips? Africa?
Click to expand...

Production will cater to all markets, not just one or two. None of these fabs are domestic.

Countries would rather pay a premium than shift production to India and reduce costs.
 
randomradio said:
Production will cater to all markets, not just one or two. None of these fabs are domestic.
Click to expand...

None of these fabs will make even 10% of the economic sense that TSMC's Taiwan facilities did.

But making economic sense is no longer the point. They are treating this as a strategic sector now.

randomradio said:
Countries would rather pay a premium than shift production to India and reduce costs.
Click to expand...

It's not about reducing costs at all.

If they didn't want to move high-end fabs to India because we're not an Ally/subordinate, fine. But why aren't they moving all the fabs to Japan? Or all of them to Europe? Or all of them to US?

It would have still made more economic sense than building 3 fabs here, 2 there & 2 there which simply leads to duplication of infrastructure & loss of synergies.
 
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Parthu said:
None of these fabs will make even 10% of the economic sense that TSMC's Taiwan facilities did.

But making economic sense is no longer the point. They are treating this as a strategic sector now.



It's not about reducing costs at all.

If they didn't want to move high-end fabs to India because we're not an Ally/subordinate, fine. But why aren't they moving all the fabs to Japan? Or all of them to Europe? Or all of them to US?

It would have still made more economic sense than building 3 fabs here, 2 there & 2 there which simply leads to duplication of infrastructure & loss of synergies.
Click to expand...

Yeah, it's a strategic sector, which is my point in saying we gotta give up on silicon.

The reason why Taiwan made sense was because of the very low pay of the workers and middle rung managers within the industry. The same benefits India has.

As for why they aren't moving to the same location, it's 'cause of subsidies. Companies are merely maximising the benefit of subsidies 'cause taxpayers are willing to pay for setting up shop. With Taiwan going out of the loop, and the only option being other developed countries, pay and perks have become uniform, which allows chip companies to set up shop anywhere. Though, it's a very bad move on their part in not selecting India's low wage advantage while trying to compete with China.
 
randomradio said:
The reason why Taiwan made sense was because of the very low pay of the workers and middle rung managers within the industry. The same benefits India has.
Click to expand...

That was back when it all started out. As of now Taiwan's per capita income is about the same as Western Europe once you adjust for purchasing power.

But the reason why it still made sense to produce here was because all the critical infrastructure was already built up, and more importantly the economies of scale were mind-boggling: Taiwan was producing over 90% of the entire world's high-end chip supply.

But like I said, that kind of economy of scale is simply not going to be attained by any of the new fabs coming up in West/Japan. The new market is going to be highly fragmented AND highly localized. For example, the chips to go on a Sony PlayStation console will probably be built in Japan, while those for a Xbox console might be built in the US.

Earlier, they were both being built at the same place - Taiwan.

randomradio said:
As for why they aren't moving to the same location, it's 'cause of subsidies. Companies are merely maximising the benefit of subsidies 'cause taxpayers are willing to pay for setting up shop. With Taiwan going out of the loop, and the only option being other developed countries, pay and perks have become uniform, which allows chip companies to set up shop anywhere. Though, it's a very bad move on their part in not selecting India's low wage advantage while trying to compete with China.
Click to expand...

But if you're getting subsidies everywhere, why not take advantage of economies of scale on top of that?

It's because that eventually, they realize that there are probably going to be tariffs on chips that weren't made in the home country. That, and redundancy was probably a strategic requirement as well.
 
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Parthu said:
That was back when it all started out. As of now Taiwan's per capita income is about the same as Western Europe once you adjust for purchasing power.

But the reason why it still made sense to produce here was because all the critical infrastructure was already built up, and more importantly the economies of scale were mind-boggling: Taiwan was producing over 90% of the entire world's high-end chip supply.

But like I said, that kind of economy of scale is simply not going to be attained by any of the new fabs coming up in West/Japan. The new market is going to be highly fragmented AND highly localized. For example, the chips to go on a Sony PlayStation console will probably be built in Japan, while those for a Xbox console might be built in the US.

Earlier, they were both being built at the same place - Taiwan.



But if you're getting subsidies everywhere, why not take advantage of economies of scale on top of that?

It's because that eventually, they realize that there are probably going to be tariffs on chips that weren't made in the home country. That, and redundancy was probably a strategic requirement as well.
Click to expand...

Taiwan's pay is high only at the upper echelons. The pay is still low at the lower echelons which make up numbers. Although Taiwan has Western levels of development, their wages are still half that of the West.
 
We need to throw another 20k crores for next 3 years and give the chips to local industry. We have the design expertise and can build lower end products like server boards, networking products..etc. These internally produced goods can replace imports saving significant foreign exchange. Once the industry picks up they can start paying for those chips. Some where some one has to pay for it without which the industry will not grow.
 
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