Global giants look to invest Rs 50,000 crore in chip-making in India

[Sergi]

Read the title of the thread and I was like god dam it what idiot is going to invest 8 Billion dollars in making chips. Apparently its not the potato chips

On topic : semiconductor industry in India something is cooking here. Great news

 

[BigDaddyWatch]

I'm skeptical about this news. There was talk a few years back from the Indians that Dell was going to move her entire operation from china to India and nothing happened. The source of this news are two anonymous officials in the government that's said to be in the know rather than a official announcement by either the two companies or the Indian government.

 

[mastaan]

1. India is HUGE market. Put a 6% customs duty .. and anyone who produces domestically gains a 6% profit margin.

India is already the third largest smart phone market in the world ... and even then, the untapped market looks huge.

Good that Reliance refused Samsung on price .... I wish Reliance sources domestically its 4G handsets, beginning with assembly and moving up the value chain to components manufacture as well.

2. It is naive to think that India has "no industrial base". Its only low as a fraction of the overall GDP, but the GDP itself is quite large that still makes manufacturing a huge employer and income generator.

Just because we have large industries producing basic industrial goods and few large refineries purifying imported crude, doesn't really qualify us to be an industrial power. You should check out what we really produce, our labor laws to invite global majors and our salary inflation rate and you won't be contesting what i said. We don't have the industrial culture, discipline or policies to really support making a guongzhou in india. I have worked there, seen yheir scale and speed and quite frankly, we are at least 2 decades behind competing with a taiwan or china or south korea on industrial basis.

The 4g handsets might be 'assembled' in india, but the technology, design and manufacturing process will be done and certified by foreigners... It is nothing to be defensive about, but we must accept that we need to learn still to walk, let alone running the industrial production race

 

[Nisha]

Ans you all wonder why India is in the sad state it is today....


Well here you go....until you wake up and fight against corruption and for justice....no real change will ever occur...



Durga's Shakti unites IAS officers - The Times of India

 

[mastaan]

Because production costs are soaring in the aforementioned nations.

Sir, chip making is a heavily automated process and driven by only one word, scale! A chip has to cost cheap and that comes from the number of units we produce in a single day. Chine kills the world on that scale. Chipe, steel, heavy manufacturing... They just do it faster and bigger....

On the question of labor arbitrage, that is really not that big a difference as vlsi designers will cost a bomb everywhere and the workers are not your normal factory workers. There is a reason why even infy and wipros are looking to recruit locals in these countries, because indian wage inflation is one of the highest in the world. When chinese sakaries grow at 3 %, our grew at higher than 12%. If you do the math, we will catch up on salary levels in almost a decade. Hardly any leverage for a long term investment, when the factories/facilities will take 3 years to get permits and 2 years to build

 

[AADHAAR]

Sir, chip making is a heavily automated process and driven by only one word, scale! A chip has to cost cheap and that comes from the number of units we produce in a single day. Chine kills the world on that scale. Chipe, steel, heavy manufacturing... They just do it faster and bigger....

On the question of labor arbitrage, that is really not that big a difference as vlsi designers will cost a bomb everywhere and the workers are not your normal factory workers. There is a reason why even infy and wipros are looking to recruit locals in these countries, because indian wage inflation is one of the highest in the world. When chinese sakaries grow at 3 %, our grew at higher than 12%. If you do the math, we will catch up on salary levels in almost a decade. Hardly any leverage for a long term investment, when the factories/facilities will take 3 years to get permits and 2 years to build

All this isn't an issue at all.

You may note that all the chip fab foundries are in losses ... and this is why profit-focused Indian companies don't manufacture it.
(ditto for profit-minded Americans and Europeans).

That said, manufacturing the chips in India will convert a forex liability to rupee expense for India.. it's good for import substitution. And India's domestic market is huge.

Profitablility is going to be a stress.. and that's why govt sops are necessary, and a small customs protection.

I know, as we experienced before the 90s, high customs duties don't help (in fact, hurt) in the long run. The 6% customs is more like to provide a level playing field against hidden subsidies in china, and written off capital investments in taiwanese foundries.

 

[ptltejas]

It is hard to believe that it can come to gujarat. I think it is require to make at where row materials are available and also water.

 

[acid rain]

I'm skeptical about this news. There was talk a few years back from the Indians that Dell was going to move her entire operation from china to India and nothing happened.

Any source or proof of this?

 

[Brahmos_2]

Amazing News

 

[mastaan]

All this isn't an issue at all.

You may note that all the chip fab foundries are in losses ... and this is why profit-focused Indian companies don't manufacture it.
(ditto for profit-minded Americans and Europeans).

That said, manufacturing the chips in India will convert a forex liability to rupee expense for India.. it's good for import substitution. And India's domestic market is huge.

Profitablility is going to be a stress.. and that's why govt sops are necessary, and a small customs protection.

I know, as we experienced before the 90s, high customs duties don't help (in fact, hurt) in the long run. The 6% customs is more like to provide a level playing field against hidden subsidies in china, and written off capital investments in taiwanese foundries.

Awesome point. Didn't think about import substitution with local expense and thus lower forex liability... Might just be a small number, but logiclly you have a valud point. However, for the kind of foundries we would establish (i believe, low end, mass scale chips for simplistic function logics in them), how big would be the domestic market?

Btw, i don't think indian companies are profit minded or shareholder focussed (not promoter oriented)like the american ones...

 

[Marshmallow]

Awesome point. Didn't think about import substitution with local expense and thus lower forex liability... Might just be a small number, but logiclly you have a valud point. However, for the kind of foundries we would establish (i believe, low end, mass scale chips for simplistic function logics in them), how big would be the domestic market?

Btw, i don't think indian companies are profit minded or shareholder focussed (not promoter oriented)like the american ones...

mastaan

 

[Armstrong]

mastaan

@mastaan - Don't mind her...shes a little

 

[Marshmallow]

@mastaan - Don't mind her...shes a little

is that da same mastan we used to hav in naswar corner?

 

[Armstrong]

is that da same mastan we used to hav in naswar corner?

Yes the same !

 

[Marshmallow]

Yes the same !

i asked u cuz u kno each n every member here...their bhabis n bhais....da crockery in their kitchen...furniture.....bank accounts n even the pen and pencils they use to write things