India Next in Line With Incentives for Chip Makers

[TheLostSwede]

Over the past couple of months there have been a lot of calls for more investment into the semiconductor industry due to the current shortage of many different kinds of semiconductors. As we've seen, several government organizations have already started working on how to woo chip makers to their part of the world and the latest nation to join the fray is India.

Unlike the US and the EU where so far no firm budgets have been approved, India has already approved a US$10 billion incentive plan for semiconductor, as well as display panel manufacturers who are willing to consider India as the next location for their new fabs. According to Reuters, the Indian government is said to cover up to 50 percent of the project cost of new semiconductor and display panel fabs. So far it seems like at least three companies are interested in the scheme for semiconductor manufacturing, namely Tower Semiconductor out of Israel, Foxconn and an unnamed Singaporean consortium.




The Indian government is hoping that the investments will create some 35,000 direct jobs for highly qualified staff, plus up to another 100,000 indirect jobs. India is lagging behind when it comes to the semiconductor industry, despite there being a growing local semiconductor designs, most of them can't be produced locally due to lack of suitable foundry partners. It's unlikely that we'll see a huge shift here, unless there's local interest in starting a foundry that manufactures for Indian companies in India. That said, if India can manage to win over some foreign companies that will set up foundries locally, this is a means to further local know-how in semiconductor manufacturing, which could lead to local foundries in the future, even though it might not happen in the near future.

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[Daven]

The main takeaway is that capitalism is only for well established markets at their current levels. Expanding or creating markets seems to require public tax money or so these large very profitable businesses would have you believe.

 

[btarunr]

I'm not 100% sure this will result in cutting-edge semiconductor fabrication, but it will at least make India a major source of low-tech stuff like electrical SMDs, bare PCBs, placing, or even chip-packaging. One could even consider display panels "low-tech."

 

[TheLostSwede]

The main takeaway is that capitalism is only for well established markets at their current levels. Expanding or creating markets seems to require public tax money or so these large very profitable businesses would have you believe.

Well, it's expensive to build a semiconductor fab, so if they can get a government to give them money, why not? I mean, better value for them and their shareholders...
I guess the argument is that they're providing jobs, so the government should help them out.

I'm not 100% sure this will result in cutting-edge semiconductor fabrication, but it will at least make India a major source of low-tech stuff like electrical SMDs, bare PCBs, placing, or even chip-packaging. One could even consider display panels "low-tech."

Well, I think you're a bit too conservative here, as it looks like the companies that are interested are making things like MEMS, RFCMOS and CMOS image sensors, which is still cutting edge in their specific market segment and a lot more cutting edge than what you're mentioning.
As far as I've managed to find out, the most advanced foundry in India is at 150nm, which is very far from the cutting edge and more in line what you mentioned.
At least Tower Semiconductor is at 45nm or possibly smaller nodes.

Tower Semiconductor - Wikipedia

en.wikipedia.org

 

[Daven]

Well, it's expensive to build a semiconductor fab, so if they can get a government to give them money, why not? I mean, better value for them and their shareholders...
I guess the argument is that they're providing jobs, so the government should help them out.


Well, I think you're a bit too conservative here, as it looks like the companies that are interested are making things like MEMS, RFCMOS and CMOS image sensors, which is still cutting edge in their specific market segment and a lot more cutting edge than what you're mentioning.
As far as I've managed to find out, the most advanced foundry in India is at 150nm, which is very far from the cutting edge and more in line what you mentioned.
At least Tower Semiconductor is at 45nm or possibly smaller nodes.

Tower Semiconductor - Wikipedia

en.wikipedia.org

I would agree with you on the government part if rich naysayers inside and outside government were not constantly campaigning / lobbying on reducing their tax burden on the one hand but then asking for a government bailout / handouts on the other. The law of diminishing returns will eventually kick in when the poor and middle class are left with 100% of the tax burden while their salaries are constantly behind inflation and prices keep rising.

 

[TheLostSwede]

I would agree with you on the government part if rich naysayers inside and outside government were not constantly campaigning / lobbying on reducing their tax burden on the one hand but then asking for a government bailout / handouts on the other. The law of diminishing returns will eventually kick in when the poor and middle class are left with 100% of the tax burden while their salaries are constantly behind inflation and prices keep rising.

Sorry, I guess my sarcasm didn't quite come across...

 

[TheinsanegamerN]

The main takeaway is that capitalism is only for well established markets at their current levels. Expanding or creating markets seems to require public tax money or so these large very profitable businesses would have you believe.

I think the lesson here is that if you want chip makers to expand to your country as opposed to others, you need to give them incentive to do so, because otherwise they will go where it is cheaper. Capitalism 101 right there.

 

[RandallFlagg]

The main takeaway is that capitalism is only for well established markets at their current levels. Expanding or creating markets seems to require public tax money or so these large very profitable businesses would have you believe.

Has nothing to do with current advancements being too expensive.

Both Taiwan and China have in the past and still do support their fab industries with their tax dollars. TSMC and UMC were both started by Taiwan's government. Can't expect capitalist companies to compete against entities that are supported by entire nations.

 

[trsttte]

I think the lesson here is that if you want chip makers to expand to your country as opposed to others, you need to give them incentive to do so, because otherwise they will go where it is cheaper. Capitalism 101 right there.

Always has been, this is nothing new and not exclusive to semi conductors, like at all

 

[Flanker]

gogogo more chips for everyone

 

[AlwaysHope]

Well, it's expensive to build a semiconductor fab, so if they can get a government to give them money, why not? I mean, better value for them and their shareholders...
I guess the argument is that they're providing jobs, so the government should help them out.

The job creation part is where they get governments. Pretty hard for any government to reject that side of the argument.

 

[Caring1]

Are they going to outsource to an American call centre?

 

[TheLostSwede]

The job creation part is where they get governments. Pretty hard for any government to reject that side of the argument.

Well, in this case it's clearly something the Indian government is betting pretty hard on as well.

 

[peja]

India have failed before during 90 era. Until they fix their power and water utility no chipmaker will stay. India have talent but bad government

 

[RandallFlagg]

India have failed before during 90 era. Until they fix their power and water utility no chipmaker will stay. India have talent but bad government

Horse before the cart. They'd be better off starting with discrete components - transistors / capacitors / resistors and PCB assembly. India's manufacturing output has also faltered since reaching a high point as % of GDP in 2010 and high in nominal value in 2018. Maybe this is also because of what you say.