Indian Electronics and Semiconductor manufacturing industry

[LondonParisTokyo]

Well whatever the case, PMO had better wake up tomorrow. Time is running out

 

[avknight1408]

Bloomberg - India’s Chip Dreams Aren’t Crazy, They’re Just Misguided

New Delhi wants to lure a Taiwanese name to burnish its credentials, but there’s far more suitable candidates if the government is willing to be a little more pragmatic.

For more than two decades, India has maintained the fantasy that a major semiconductor manufacturer will set up shop on its shores, kicking off the nation’s journey along an inevitable path toward chip glory. It never happened, but there’s now a very clear script for how it might be done, if only government and industry leaders would take a more pragmatic approach.

In the latest incarnation of the dream, officials in India and Taiwan are apparently in talks to lure a new factory worth up to $7.5 billion. The local government is likely to foot half the bill to build and kit out such a project, Bloomberg News reported. While Taipei is eager to build closer ties with New Delhi, facilitating the construction of a chip fab in South Asia is not high on its priority list. That’s not due to Taiwan being particularly protectionist, but because it can’t see much point in the exercise given India's lack of expertise in the field.

Nevertheless, eager to continue the dialogue with an increasingly important partner, Taiwan may take the bait and start scouting for candidates.
What it’s likely to find is that the challenges facing the establishment of an Indian chip-making industry today are the same ones as the turn of the century. A reliable and stable electricity supply is the most crucial component of semiconductor manufacturing, but one which the nation struggles to provide. The process is so delicate that even the briefest blackout or power surge can trigger a halt that takes hours or days to reset. Abundant water supply, transport infrastructure, and experienced staff are among the other stumbling blocks.

Gone are the days when designing a component means actually building it. The rise of Taiwan Semiconductor Manufacturing Co. and Qualcomm Inc. is proof of this. The latter designs the most-advanced smartphone chips in the world, using sophisticated software and the best engineers, but only a handful of its workforce would have the skillset to run a factory. TSMC, meanwhile, has stayed out of the design business and left that to clients.

Today, India has a large talent pool of chip designers, but the roster of process engineers is much shorter and certainly not long enough to run a Taiwanese front-end chip factory — where microscopic transistors are etched onto silicon.

Under Prime Minister Narendra Modi’s Make in India campaign, scores of new factories have opened or expanded across the country — many run by Taiwanese electronics giants. This trend bolstered the belief that local production is a path to selling more goods there. But it turns out that slapping a big tariff on imported smartphones is a greater incentive to build locally, with even Apple Inc.’s iPhones getting assembled on shore.

Companies like Foxconn Technology Group and Wistron Corp. ramped up in India because the nation already had an established electronics assembly business — where margins are thin and labor costs matter — and the requisite workforce was in place. Tariffs moved the economic needle enough to justify the expansion. The same cannot be said for chips. There is no local history of production, so tariffs would just drive up prices, not spur a rash of onshoring.

It’s also apparent that India’s renewed push into chips comes amid growing rivalry with China, a country that’s already committed tens of billions of dollars to become a semiconductor powerhouse. Yet New Delhi should be learning from Beijing’s mistakes and rethink its eagerness to follow suit. The world’s largest nation, and number-two economy, is mostly churning out commodity memory chips and a small amount of processors using technology that’s more than a decade old. When it comes to semiconductors, India most certainly doesn’t want to replicate China.

Instead, it hopes to be the next Taiwan. And that’s not going to happen either. In fact, it’s already failed several times before on deals worth around $5 billion apiece.

Now, for at least the third time in two decades, India is reviving dreams of being a player in the chip space as a way for the nation to move its economy up the value chain from simple labor-intensive assembly to high-tech manufacturing. One imagines TSMC being high among the targets given it’s the global leader and boasts a client list that includes Apple, Qualcomm, Nvidia Corp. and even Intel Corp. The Hsinchu-based company might politely decline, though, as it’s already expanding at home, has broken new ground in the U.S. and is considering opening a new factory in Germany.

Smaller rival United Microelectronics Corp., however, might be curious to consider what New Delhi has to offer. Its spending budget is lower, margins thinner, and technology older, so it has a far bigger appetite to consider what sweeteners might be available. But India should also be wary of any entity that sets up solely because of the largesse that’s being doled out.

But India may be chasing the wrong types of companies. Keen to get their name in a press release alongside blue-ribbon names, generations of Indian leaders seem to have forgotten a far more suitable match: chip packaging and testing.


To the semiconductor snobs, outsourced assembly and test (OSAT) is considered the low-end part of the process compared to the high-cost lithographic steps that create the underlying component. It’s the leading-edge, multi-billion dollar factories that handle front-end wafer fabrication, while the more low-key plants test for flaws, attach wires, and then wrap them in a protective packaging. This may not sound sexy, but it’s still a highly technical and crucial aspect of manufacturing.

Fortunately for Taipei and New Delhi, the global leaders in packaging and testing are based in Taiwan. After merging with local rivals, Kaohsiung-based ASE Technology Holding Co. is number one with Hsinchu-based Powertech Technology Inc. fourth.

And ASE may be looking for an excuse to diversify further. The recent power crisis in China forced the Taiwan company to shut its Kunshan factory outside Shanghai for almost five days. Such outrages are rare, but with labor costs rising and power and pollution concerns in China escalating, the time is ripe for ASE to consider breaking ground in India.

New Delhi might think it wants a chip manufacturing facility to realize a long-held dream, but the government would be better off saving its money and luring more suitable partners in testing and assembly.

 

[LondonParisTokyo]

India should do both. To not get manufacturing is foolish, but to not shore up design, testing, AND fabricating is even more foolish. Too bad Modi sucks.

 

[Crazywithmath]

Bloomberg - India’s Chip Dreams Aren’t Crazy, They’re Just Misguided

New Delhi wants to lure a Taiwanese name to burnish its credentials, but there’s far more suitable candidates if the government is willing to be a little more pragmatic.

For more than two decades, India has maintained the fantasy that a major semiconductor manufacturer will set up shop on its shores, kicking off the nation’s journey along an inevitable path toward chip glory. It never happened, but there’s now a very clear script for how it might be done, if only government and industry leaders would take a more pragmatic approach.

In the latest incarnation of the dream, officials in India and Taiwan are apparently in talks to lure a new factory worth up to $7.5 billion. The local government is likely to foot half the bill to build and kit out such a project, Bloomberg News reported. While Taipei is eager to build closer ties with New Delhi, facilitating the construction of a chip fab in South Asia is not high on its priority list. That’s not due to Taiwan being particularly protectionist, but because it can’t see much point in the exercise given India's lack of expertise in the field.

Nevertheless, eager to continue the dialogue with an increasingly important partner, Taiwan may take the bait and start scouting for candidates.
What it’s likely to find is that the challenges facing the establishment of an Indian chip-making industry today are the same ones as the turn of the century. A reliable and stable electricity supply is the most crucial component of semiconductor manufacturing, but one which the nation struggles to provide. The process is so delicate that even the briefest blackout or power surge can trigger a halt that takes hours or days to reset. Abundant water supply, transport infrastructure, and experienced staff are among the other stumbling blocks.

Gone are the days when designing a component means actually building it. The rise of Taiwan Semiconductor Manufacturing Co. and Qualcomm Inc. is proof of this. The latter designs the most-advanced smartphone chips in the world, using sophisticated software and the best engineers, but only a handful of its workforce would have the skillset to run a factory. TSMC, meanwhile, has stayed out of the design business and left that to clients.

Today, India has a large talent pool of chip designers, but the roster of process engineers is much shorter and certainly not long enough to run a Taiwanese front-end chip factory — where microscopic transistors are etched onto silicon.

Under Prime Minister Narendra Modi’s Make in India campaign, scores of new factories have opened or expanded across the country — many run by Taiwanese electronics giants. This trend bolstered the belief that local production is a path to selling more goods there. But it turns out that slapping a big tariff on imported smartphones is a greater incentive to build locally, with even Apple Inc.’s iPhones getting assembled on shore.

Companies like Foxconn Technology Group and Wistron Corp. ramped up in India because the nation already had an established electronics assembly business — where margins are thin and labor costs matter — and the requisite workforce was in place. Tariffs moved the economic needle enough to justify the expansion. The same cannot be said for chips. There is no local history of production, so tariffs would just drive up prices, not spur a rash of onshoring.

It’s also apparent that India’s renewed push into chips comes amid growing rivalry with China, a country that’s already committed tens of billions of dollars to become a semiconductor powerhouse. Yet New Delhi should be learning from Beijing’s mistakes and rethink its eagerness to follow suit. The world’s largest nation, and number-two economy, is mostly churning out commodity memory chips and a small amount of processors using technology that’s more than a decade old. When it comes to semiconductors, India most certainly doesn’t want to replicate China.

Instead, it hopes to be the next Taiwan. And that’s not going to happen either. In fact, it’s already failed several times before on deals worth around $5 billion apiece.

Now, for at least the third time in two decades, India is reviving dreams of being a player in the chip space as a way for the nation to move its economy up the value chain from simple labor-intensive assembly to high-tech manufacturing. One imagines TSMC being high among the targets given it’s the global leader and boasts a client list that includes Apple, Qualcomm, Nvidia Corp. and even Intel Corp. The Hsinchu-based company might politely decline, though, as it’s already expanding at home, has broken new ground in the U.S. and is considering opening a new factory in Germany.

Smaller rival United Microelectronics Corp., however, might be curious to consider what New Delhi has to offer. Its spending budget is lower, margins thinner, and technology older, so it has a far bigger appetite to consider what sweeteners might be available. But India should also be wary of any entity that sets up solely because of the largesse that’s being doled out.

But India may be chasing the wrong types of companies. Keen to get their name in a press release alongside blue-ribbon names, generations of Indian leaders seem to have forgotten a far more suitable match: chip packaging and testing.


To the semiconductor snobs, outsourced assembly and test (OSAT) is considered the low-end part of the process compared to the high-cost lithographic steps that create the underlying component. It’s the leading-edge, multi-billion dollar factories that handle front-end wafer fabrication, while the more low-key plants test for flaws, attach wires, and then wrap them in a protective packaging. This may not sound sexy, but it’s still a highly technical and crucial aspect of manufacturing.

Fortunately for Taipei and New Delhi, the global leaders in packaging and testing are based in Taiwan. After merging with local rivals, Kaohsiung-based ASE Technology Holding Co. is number one with Hsinchu-based Powertech Technology Inc. fourth.

And ASE may be looking for an excuse to diversify further. The recent power crisis in China forced the Taiwan company to shut its Kunshan factory outside Shanghai for almost five days. Such outrages are rare, but with labor costs rising and power and pollution concerns in China escalating, the time is ripe for ASE to consider breaking ground in India.

New Delhi might think it wants a chip manufacturing facility to realize a long-held dream, but the government would be better off saving its money and luring more suitable partners in testing and assembly.

Damn you Gloomberg! We have not even started manufacturing yet! Only a bunch of proposals are there! And these hitjobs have already started . Now you know that something solid might be finally taking shape after years of speculation, haha. Anyways, India has multiple options (other than Taiwan) on table. . I remember reading articles that questioned India's decision of pumping millions into fighter aircraft development, promoting R&D on missiles and radars, betting on ISRO and went as far as calling our indigenous covid vaccines 'dubious'! Not very surprised.

 

[Crazywithmath]

Bloomberg - India’s Chip Dreams Aren’t Crazy, They’re Just Misguided

New Delhi wants to lure a Taiwanese name to burnish its credentials, but there’s far more suitable candidates if the government is willing to be a little more pragmatic.

For more than two decades, India has maintained the fantasy that a major semiconductor manufacturer will set up shop on its shores, kicking off the nation’s journey along an inevitable path toward chip glory. It never happened, but there’s now a very clear script for how it might be done, if only government and industry leaders would take a more pragmatic approach.

In the latest incarnation of the dream, officials in India and Taiwan are apparently in talks to lure a new factory worth up to $7.5 billion. The local government is likely to foot half the bill to build and kit out such a project, Bloomberg News reported. While Taipei is eager to build closer ties with New Delhi, facilitating the construction of a chip fab in South Asia is not high on its priority list. That’s not due to Taiwan being particularly protectionist, but because it can’t see much point in the exercise given India's lack of expertise in the field.

Nevertheless, eager to continue the dialogue with an increasingly important partner, Taiwan may take the bait and start scouting for candidates.
What it’s likely to find is that the challenges facing the establishment of an Indian chip-making industry today are the same ones as the turn of the century. A reliable and stable electricity supply is the most crucial component of semiconductor manufacturing, but one which the nation struggles to provide. The process is so delicate that even the briefest blackout or power surge can trigger a halt that takes hours or days to reset. Abundant water supply, transport infrastructure, and experienced staff are among the other stumbling blocks.

Gone are the days when designing a component means actually building it. The rise of Taiwan Semiconductor Manufacturing Co. and Qualcomm Inc. is proof of this. The latter designs the most-advanced smartphone chips in the world, using sophisticated software and the best engineers, but only a handful of its workforce would have the skillset to run a factory. TSMC, meanwhile, has stayed out of the design business and left that to clients.

Today, India has a large talent pool of chip designers, but the roster of process engineers is much shorter and certainly not long enough to run a Taiwanese front-end chip factory — where microscopic transistors are etched onto silicon.

Under Prime Minister Narendra Modi’s Make in India campaign, scores of new factories have opened or expanded across the country — many run by Taiwanese electronics giants. This trend bolstered the belief that local production is a path to selling more goods there. But it turns out that slapping a big tariff on imported smartphones is a greater incentive to build locally, with even Apple Inc.’s iPhones getting assembled on shore.

Companies like Foxconn Technology Group and Wistron Corp. ramped up in India because the nation already had an established electronics assembly business — where margins are thin and labor costs matter — and the requisite workforce was in place. Tariffs moved the economic needle enough to justify the expansion. The same cannot be said for chips. There is no local history of production, so tariffs would just drive up prices, not spur a rash of onshoring.

It’s also apparent that India’s renewed push into chips comes amid growing rivalry with China, a country that’s already committed tens of billions of dollars to become a semiconductor powerhouse. Yet New Delhi should be learning from Beijing’s mistakes and rethink its eagerness to follow suit. The world’s largest nation, and number-two economy, is mostly churning out commodity memory chips and a small amount of processors using technology that’s more than a decade old. When it comes to semiconductors, India most certainly doesn’t want to replicate China.

Instead, it hopes to be the next Taiwan. And that’s not going to happen either. In fact, it’s already failed several times before on deals worth around $5 billion apiece.

Now, for at least the third time in two decades, India is reviving dreams of being a player in the chip space as a way for the nation to move its economy up the value chain from simple labor-intensive assembly to high-tech manufacturing. One imagines TSMC being high among the targets given it’s the global leader and boasts a client list that includes Apple, Qualcomm, Nvidia Corp. and even Intel Corp. The Hsinchu-based company might politely decline, though, as it’s already expanding at home, has broken new ground in the U.S. and is considering opening a new factory in Germany.

Smaller rival United Microelectronics Corp., however, might be curious to consider what New Delhi has to offer. Its spending budget is lower, margins thinner, and technology older, so it has a far bigger appetite to consider what sweeteners might be available. But India should also be wary of any entity that sets up solely because of the largesse that’s being doled out.

But India may be chasing the wrong types of companies. Keen to get their name in a press release alongside blue-ribbon names, generations of Indian leaders seem to have forgotten a far more suitable match: chip packaging and testing.


To the semiconductor snobs, outsourced assembly and test (OSAT) is considered the low-end part of the process compared to the high-cost lithographic steps that create the underlying component. It’s the leading-edge, multi-billion dollar factories that handle front-end wafer fabrication, while the more low-key plants test for flaws, attach wires, and then wrap them in a protective packaging. This may not sound sexy, but it’s still a highly technical and crucial aspect of manufacturing.

Fortunately for Taipei and New Delhi, the global leaders in packaging and testing are based in Taiwan. After merging with local rivals, Kaohsiung-based ASE Technology Holding Co. is number one with Hsinchu-based Powertech Technology Inc. fourth.

And ASE may be looking for an excuse to diversify further. The recent power crisis in China forced the Taiwan company to shut its Kunshan factory outside Shanghai for almost five days. Such outrages are rare, but with labor costs rising and power and pollution concerns in China escalating, the time is ripe for ASE to consider breaking ground in India.

New Delhi might think it wants a chip manufacturing facility to realize a long-held dream, but the government would be better off saving its money and luring more suitable partners in testing and assembly.

 

[Covfefe]

Don't worry, nibba. They are a part of the "problem in every solution" brigade. Mudi, for all his other fallacies, didn't listen to his RBI governor when he painted a doomsday scenario for Manufacturing focus (Rajan touted the Make in India initiative). Who is this BS opinion piece writer to make them change their mind!

 

[HitmanBlood]

Lot of India can't do articles. If Semiconductor fab really comes to India, China will use 0.5 front to derail this plan. Protests by farmers, environmentalist NGOs will come out in full force.

BJP may need to be heavy handed in their approach. Otherwise anti-India forces will do everything to stop Indian fab dream.

 

[Dark Sorrow]

Lot of India can't do articles. If Semiconductor fab really comes to India, China will use 0.5 front to derail this plan. Protests by farmers, environmentalist NGOs will come out in full force.

BJP may need to be heavy handed in their approach. Otherwise anti-India forces will do everything to stop Indian fab dream.

Not everything is a conspiracy.
May be reasons might be simpler light market and economic or lack of capital or lack of interest or pure incompetence.

BJP is a political party. They are not patriots but politicians. One thing politicians can be counted upon that they will act in their own political interest.

One more thing heavy handed approach don't work in India; we are not PRC!!!

 

[HitmanBlood]

Not everything is a conspiracy.
May be reasons might be simpler light market and economic or lack of capital or lack of interest or pure incompetence.

BJP is a political party. They are not patriots but politicians. One thing politicians can be counted upon that they will act in their own political interest.

One more thing heavy handed approach don't work in India; we are not PRC!!!

We can bury our heads in sand and pretend there is no conspiracy but time and time again, Indian critical projects have been derailed by same leftist group, for this to be a mare coincidence.

Semiconductor Fab means India's entry into small club of elite technology producing nations. Even China is struggling in this front. This is a future gold mine of production. No way China will just sit idle and let India overtake it. A few million dollars thrown at the right people can get many things done in India.

BJP is a political party. They have to make India prosper to win people's trust in future. A weak economy will only make opposition stronger. BJP being a right wing party doesn't have vote bank of muslims, nor they can think innovative ways of giving away handouts. Only thing going for BJP in India at the moment is "Vikas". Therefore it is in BJP's political interest to make Indian economy grow.

Heavy handed approach always works. If it wasn't for heavy handed approach of Indira Gandhi, India would've been a much different country today. Without heavy handed approach Kashmir would've been part of pakistan today. North east would've broken into small righ wing Christian states long ago. Heavy handed approach by Momota in Bengal has completely destroyed any opposition in her state.

If Gov don't do heavy handed approach there are many types of people who will try to derail allmost every project or every law passed by gov. If gov becomes afraid of heavy handedness it will result into complete Chaos in India.

 

[Dark Sorrow]

We can bury our heads in sand and pretend there is no conspiracy but time and time again, Indian critical projects have been derailed by same leftist group, for this to be a mare coincidence.

Semiconductor Fab means India's entry into small club of elite technology producing nations. Even China is struggling in this front. This is a future gold mine of production. No way China will just sit idle and let India overtake it. A few million dollars thrown at the right people can get many things done in India.

Their can be simple explanation that we don't have necessary capital or will to enter in such endeavor. We don't have necessary customer base. No company/country will give their bleeding edge technology just because you want them to.

BJP is a political party. They have to make India prosper to win people's trust in future. A weak economy will only make opposition stronger. BJP being a right wing party doesn't have vote bank of muslims, nor they can think innovative ways of giving away handouts. Only thing going for BJP in India at the moment is "Vikas". Therefore it is in BJP's political interest to make Indian economy grow.

BJP is a political party. All they want is to get elected. Making India prosper to win people's trust in future is all BS. Lets be practical man!
BJP is highly polarizing force that depends on nationalist favour to get elected.
Kindly note it is in BJP's political interest to get re-elected by hook or crook everything else comes secondary.

Heavy handed approach always works.

Heavy handed approach will never works in a diverse country like India in today's age.

If it wasn't for heavy handed approach of Indira Gandhi, India would've been a much different country today. Without heavy handed approach Kashmir would've been part of pakistan today. North east would've broken into small righ wing Christian states long ago. Heavy handed approach by Momota in Bengal has completely destroyed any opposition in her state.

Her heavy hand approach cost both her and Republic of India a lot. This is 2021 and not 1970s when government can do anything and get away with it.
Most of License Raj and most of our socialist laws came during her tenure.
Even with her heavy hand she failed to establish Semiconductor facility in India.
Don't compare counter-insurgency with civilian endeavor.

If Gov don't do heavy handed approach there are many types of people who will try to derail allmost every project or every law passed by gov. If gov becomes afraid of heavy handedness it will result into complete Chaos in India.

Heavy handed approaches gives rise to dictatorial rule.
Such endeavors fail as soon as they loose patronage . We want self-sufficient and self-running semiconductor industry and not a government patronage or till end up like SCL.

 

[Abdus Salem killed]

Riaz haq the pak fat boy talking on Indian expertise a hitjob article to make us doubt goi

 

[Crazywithmath]

Their can be simple explanation that we don't have necessary capital or will to enter in such endeavor. We don't have necessary customer base. No company/country will give their bleeding edge technology just because you want them to.

Please do not write stuff without knowing a thing. Who told you that there will not be any customers? The proposals from NXP ventures included even guaranteed buyers! And no one is giving us 3nm technology. GOI is looking to enter through the lower end of the pyramid. Assembly and testing is already up and running (mostly through SPECS/PLI). The earlier ventures did not bear fruit because we did not have enough manufacturing capacities in India. With PLIs coming up on phones, components, Assembly and tesing, IT products, white goods, TVs and the contribution from manufacturing of electronics set to go up to 7-8% of the GDP (from the present 3%+ ish) in the next few years it makes sense to dive deeper into semiconductors. GOI is looking for 50, 60, 65 nm ish chips even if the FAB is analog. Do you think this is some massive cutting edge technology? If companies were not interested then they would not be responding to the EOI floated by the GOI and one certain Israeli company would not be writing to the PMO to expedite the process; don't you think so? India has designing capabilities, assembly and testing is slowly kicking up and with the electronic ecosystem slowly taking the shape it makes sense to get into the semiconductor bus.

We want self-sufficient and self-running semiconductor industry and not a government patronage or till end up like SCL.

LOL self running/sustaining industry! This industry is a strategic asset; it does not survive without government patronage. Most fabs operate on extremely narrow profit margins and competitions are cut throat. And GOI is not looking to create another SCL. Outside supports are absolute necessity to run commercial FABs. R&D is a different ball game altogether and this article says nothing about domestic R&D so I won't go into that.

 

[Suryavanshi]

Their can be simple explanation that we don't have necessary capital or will to enter in such endeavor. We don't have necessary customer base.

Let's moves aside from semiconductor and take ongoing projects an an example, u have seen the arrey protest, stertile copper protests. Even after getting all the safety metrics right engineered protests kept on.
Do you not consider this as an Outside intervention?

BJP is highly polarizing force

Very natural and genuine in the situation.

Kindly note it is in BJP's political interest to get re-elected by hook or crook everything else comes secondary.

Yes one had to get elected to get stuff done.
All good will feelings are useless unless one get's elected.

Heavy handed approach will never works in a diverse country like India in today's age.

It's a matter of competence not a matter of it will work or not work.

Heavy handed approaches gives rise to dictatorial rule.
Such endeavors fail as soon as they loose patronage . We want self-sufficient and self-running semiconductor industry and not a government patronage or till end up like SCL

Modern democracy is just a set up for anarchy so I don't see the point of dissing heavy handed well cordinated approach

 

[shade]

Bloomberg - India’s Chip Dreams Aren’t Crazy, They’re Just Misguided

New Delhi wants to lure a Taiwanese name to burnish its credentials, but there’s far more suitable candidates if the government is willing to be a little more pragmatic.

For more than two decades, India has maintained the fantasy that a major semiconductor manufacturer will set up shop on its shores, kicking off the nation’s journey along an inevitable path toward chip glory. It never happened, but there’s now a very clear script for how it might be done, if only government and industry leaders would take a more pragmatic approach.

In the latest incarnation of the dream, officials in India and Taiwan are apparently in talks to lure a new factory worth up to $7.5 billion. The local government is likely to foot half the bill to build and kit out such a project, Bloomberg News reported. While Taipei is eager to build closer ties with New Delhi, facilitating the construction of a chip fab in South Asia is not high on its priority list. That’s not due to Taiwan being particularly protectionist, but because it can’t see much point in the exercise given India's lack of expertise in the field.

Nevertheless, eager to continue the dialogue with an increasingly important partner, Taiwan may take the bait and start scouting for candidates.
What it’s likely to find is that the challenges facing the establishment of an Indian chip-making industry today are the same ones as the turn of the century. A reliable and stable electricity supply is the most crucial component of semiconductor manufacturing, but one which the nation struggles to provide. The process is so delicate that even the briefest blackout or power surge can trigger a halt that takes hours or days to reset. Abundant water supply, transport infrastructure, and experienced staff are among the other stumbling blocks.

Gone are the days when designing a component means actually building it. The rise of Taiwan Semiconductor Manufacturing Co. and Qualcomm Inc. is proof of this. The latter designs the most-advanced smartphone chips in the world, using sophisticated software and the best engineers, but only a handful of its workforce would have the skillset to run a factory. TSMC, meanwhile, has stayed out of the design business and left that to clients.

Today, India has a large talent pool of chip designers, but the roster of process engineers is much shorter and certainly not long enough to run a Taiwanese front-end chip factory — where microscopic transistors are etched onto silicon.

Under Prime Minister Narendra Modi’s Make in India campaign, scores of new factories have opened or expanded across the country — many run by Taiwanese electronics giants. This trend bolstered the belief that local production is a path to selling more goods there. But it turns out that slapping a big tariff on imported smartphones is a greater incentive to build locally, with even Apple Inc.’s iPhones getting assembled on shore.

Companies like Foxconn Technology Group and Wistron Corp. ramped up in India because the nation already had an established electronics assembly business — where margins are thin and labor costs matter — and the requisite workforce was in place. Tariffs moved the economic needle enough to justify the expansion. The same cannot be said for chips. There is no local history of production, so tariffs would just drive up prices, not spur a rash of onshoring.

It’s also apparent that India’s renewed push into chips comes amid growing rivalry with China, a country that’s already committed tens of billions of dollars to become a semiconductor powerhouse. Yet New Delhi should be learning from Beijing’s mistakes and rethink its eagerness to follow suit. The world’s largest nation, and number-two economy, is mostly churning out commodity memory chips and a small amount of processors using technology that’s more than a decade old. When it comes to semiconductors, India most certainly doesn’t want to replicate China.

Instead, it hopes to be the next Taiwan. And that’s not going to happen either. In fact, it’s already failed several times before on deals worth around $5 billion apiece.

Now, for at least the third time in two decades, India is reviving dreams of being a player in the chip space as a way for the nation to move its economy up the value chain from simple labor-intensive assembly to high-tech manufacturing. One imagines TSMC being high among the targets given it’s the global leader and boasts a client list that includes Apple, Qualcomm, Nvidia Corp. and even Intel Corp. The Hsinchu-based company might politely decline, though, as it’s already expanding at home, has broken new ground in the U.S. and is considering opening a new factory in Germany.

Smaller rival United Microelectronics Corp., however, might be curious to consider what New Delhi has to offer. Its spending budget is lower, margins thinner, and technology older, so it has a far bigger appetite to consider what sweeteners might be available. But India should also be wary of any entity that sets up solely because of the largesse that’s being doled out.

But India may be chasing the wrong types of companies. Keen to get their name in a press release alongside blue-ribbon names, generations of Indian leaders seem to have forgotten a far more suitable match: chip packaging and testing.


To the semiconductor snobs, outsourced assembly and test (OSAT) is considered the low-end part of the process compared to the high-cost lithographic steps that create the underlying component. It’s the leading-edge, multi-billion dollar factories that handle front-end wafer fabrication, while the more low-key plants test for flaws, attach wires, and then wrap them in a protective packaging. This may not sound sexy, but it’s still a highly technical and crucial aspect of manufacturing.

Fortunately for Taipei and New Delhi, the global leaders in packaging and testing are based in Taiwan. After merging with local rivals, Kaohsiung-based ASE Technology Holding Co. is number one with Hsinchu-based Powertech Technology Inc. fourth.

And ASE may be looking for an excuse to diversify further. The recent power crisis in China forced the Taiwan company to shut its Kunshan factory outside Shanghai for almost five days. Such outrages are rare, but with labor costs rising and power and pollution concerns in China escalating, the time is ripe for ASE to consider breaking ground in India.

New Delhi might think it wants a chip manufacturing facility to realize a long-held dream, but the government would be better off saving its money and luring more suitable partners in testing and assembly.

I'd highly recommend not taking Chingberg articles seriously.
India doesn't want to become Taiwan or Korea, we want to be atleast on the level of Malaysia and get our foot in the door.

BJP is a political party. All they want is to get elected. Making India prosper to win people's trust in future is all BS. Lets be practical man!
BJP is highly polarizing force that depends on nationalist favour to get elected.
Kindly note it is in BJP's political interest to get re-elected by hook or crook everything else comes secondary.

Your nO MaRkEt fOr InDiAn SeMiConDuCtOr shilling makes sense now, thank you very much .
Also building a Fab here will not net them any more votes, most of the voting populace doesn't know about what a Fab is, neither do they care.
Also no, private industry cucks will not put money into a risky venture like Semiconductor without Govt backing, even TSMC started out with heavy Taiwanese govt backing, and probably has such backing even today.
" self-sufficient " lol, this is a capex hungry industry, there will always be a government patronage angle if it has to survive, SCL is for ISRO and Defense, not for civilian purposes

 

[Covfefe]

Riaz haq the pak fat boy talking on Indian expertise a hitjob article to make us doubt goi

Lol, big talk from a place where a "semi-conductor" will be interpreted as a cleaner dude on a semi/minitruck, in all likelihood.

 

[Lost user]

Riaz haq the pak fat boy talking on Indian expertise a hitjob article to make us doubt goi

Bloomberg articles routinely trolled PLI schemes too.. But, in a few years time, they will be proven wrong.. But, semi conductor manufacturing is a different ball game.. Would need single minded focus to make this work..

 

[Abdus Salem killed]

Bloomberg articles routinely trolled PLI schemes too.. But, in a few years time, they will be proven wrong.. But, semi conductor manufacturing is a different ball game.. Would need single minded focus to make this work..

Can I get some links

 

[shade]

Can I get some links

Don't have any actual links

But these two authors write the most anti-India articles( it's very rare to see honest coverage on India or pro-India articles on Chingberg ) on Chongberg, targetting Modi specifically.

Mihir Sharma - Bloomberg

Mihir Sharma is a Bloomberg Opinion columnist. A senior fellow at the Observer Research Foundation in New Delhi, he is author of “Restart: The Last Chance for the Indian Economy.”

www.bloomberg.com

Andy Mukherjee - Bloomberg

Andy Mukherjee is a Bloomberg Opinion columnist covering industrial companies and financial services in Asia. Previously, he worked for Reuters, the Straits Times and Bloomberg News.

www.bloomberg.com

The orientation of that site is pro-China.

 

[Crazywithmath]

Don't have any actual links

But these two authors write the most anti-India articles( it's very rare to see honest coverage on India or pro-India articles on Chingberg ) on Chongberg, targetting Modi specifically.

Mihir Sharma - Bloomberg

Mihir Sharma is a Bloomberg Opinion columnist. A senior fellow at the Observer Research Foundation in New Delhi, he is author of “Restart: The Last Chance for the Indian Economy.”

www.bloomberg.com

Andy Mukherjee - Bloomberg

Andy Mukherjee is a Bloomberg Opinion columnist covering industrial companies and financial services in Asia. Previously, he worked for Reuters, the Straits Times and Bloomberg News.

www.bloomberg.com

The orientation of that site is pro-China.

They do host some good articles as well. Ashish Chandorkar was a decent columnist. It's just that the likes of Mihir and Andy are $1 paid shills and Bloomberg has a history of hosting trashy opinion pieces. One can look for the regular factual/analysis type articles instead; those are mostly decent.

 

[LondonParisTokyo]

Any updates???