In a wrestle between great powers, there will always be a third party benefitting!
Case in point, INDIA!!!
With its vast population, favorable climate with expansive land, obviously India would be a perfect spot for the companies exiting China fearing supply chain disruptions!
Does this case hold true for SEMICONDUCTOR INDUSTRIES?
Let us analyze!
Recently, The Chairman of Foxconn, (which is the largest Semiconductor Industry in the world that manufactures microchips for Apple devices!) HIGHLIGHTED THE PREDOMINANT ROLE OF INDIA in the future of this industry especially after the COVID-19 pandemic!
- Authoritarian regime,
- Communist party’s interference in top decision making bodies of companies,
- Human rights issues,
- Uighur genocide in Xinjiang province,
- Frequent disappearing of key personalities who try to criticize the CCP (as like Jack Ma)
are tempting companies in China to rethink!!
INDIAN GOVERNMENT’S MOVE?
Indian Government has approved Rs.76000 crore through Performance Linked Incentive scheme to boost Semiconductor production!
This would generate 35k direct jobs and 1 lakh indirect jobs for Indian citizens!
The State Governments too are playing their part! Some of which are:
- MoU between Singapore based company IGSS & Government of Tamil Nadu
- MoU between Israeli company ISMC & Government of Karnataka
- The 60:40 joint venture of Vedanta-Foxconn in Gujarat made headlines on the media!!
These progress may make one feel that India’s future in Electronics would be in a bright spot!
But the issues inside home needs attention!
1. LAND
- Acquiring Land to setup a manufacturing unit is the major hurdle in India with a hell lot of formalities!
2. INNOVATION
- Companies like Renault, Nissan, Hyundai has their manufacturing bases in India but the technology still lies in their respective countries!
- The Budgetary allocation by the Government for Research is very meagre!
- India would END UP MANUFACTURING OLD CHIPS, RATHER THAN ADVANCED CHIPS!
3. INFRASTRUCTURE
- A Semiconductor unit would require constant electricity supply, Controlled air quality & Temperature and a Dust free environment whose maintenance is highly expensive as discussed in earlier article!
- CHIP WARS – USA vs CHINA!
- Any infringe to the above mentioned conditions would amount to millions as losses!
- The LEVEL OF INFRASTRUCTURE India has at this particular point of time MAY NOT SUFFICE for this Industry!
4. FOCUS ON LABOUR-INTENSIVE INDUSTRIES
- With the youth concentrated in IT sector, there is a need to DIFFUSE them to various streams!
- This would provide them with multiple choices!
With these insights on mind, Dr. Raghuram Rajan recently said that,
India should not focus on Manufacturing with a perception of being a China like model!
One size doesn’t fit all!
Rather, India has its own strengths!
It should train its skilled youth like Software & Design Engineers to innovate Semiconductor designs!
The Government should make conditions favorable for Research & Development!
With high Risk comes high Reward!
Indian scientists are capable to reach Mars with a cost less than a movie!
With an enthusiastic DEMOGRAPHIC DIVDEND in place,
‘THE SEMICONDUCTOR DREAM’ for India where both Innovation & Manufacturing go hand in hand is soon to be cherished!!
That will be the TRUE SELF-RELIANCE!!
“If you can’t explain something simple, you don’t understand it well enough” – Albert Einstein.
Howdy readers!!! With strong belief in the power of words, I look forward to help you choose the correct lens to perceive world issues and embrace positivity about the future!
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