India Is Said to Plan $10 Billion Incentive To Woo Chip Makers

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Indian government to offer ₹76,000 crore incentive package for semiconductor manufacturing in India, report says

The Indian government is reportedly planning a ₹76,000 crore incentive package for semiconductor companies. It plans to set up over 20 semiconductor units

www.businessinsider.in

 

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The plan has been approved by the Modi's government.

India outlines $10 billion plan to woo global chip makers

NEW DELHI (Reuters) -India has approved a $10 billion incentive plan to attract semiconductor and display manufacturers, its technology minister said on Wednesday, as part of a deepening push to establish the country as a global electronics production hub. Under the plan, India's government...

finance.yahoo.com

"Israel's Tower Semiconductor, Taiwan's Foxconn and a consortium from Singapore have shown interest in setting up chip factories in India while Vedanta Group was keen to set up a display plant, a government source told Reuters."

 

[Paul2]

I am my company's go to person for South Asian clients, and we have few running projects there, more with each year, with one real "giant" possibly joining on next year.

The saying is that the entire tech ecosystem of Vietnam is less than that of a single district of Shenzhen, and the same analogy goes for India with Vietnam itself.

It's too late to try to catch up to Vietnam for India. They long missed the timeframe when the collective unconscious of the industry was still deliberating where to go on from China. Now, Taiwanese industrialists have all put a bet on Vietnam, and it's very, very unlikely that they will abandon their investment in Vietnam now.

All of them are waiting for when Apple+few other majors will make a move from China. As of now, the amount of stuff Taiwanese have built in Vietnam can't right match the scale of the industry there yet. Their component factories there are sized for 5-8+ years into future.

 

[Paul2]

Electronics manufacturing requires some labour, but really not that giant amount of it. The city of Shenzhen alone (not even the greater Shenzhen area municipality,) used to make 50% of world's electronics alone a decade ago. The city back then had way fever people than it is having now.

Virtually any Asian country in the region can provide comparable workforce, or more, and India can probably outdo competitors on workforce n-times over (India produces almost as much engineers per year as China,) but the matter is not about workforce really.

The industry really moves only once in 20-15 years, and it's very cyclical. It stays in the country for 2 turns of the economic cycle, and then departs to the next cheapest location. When Samsung has built its first factory in Vietnam, Vietnam was indeed poorer, and seen lower wages than even Burma, or urban India, or Bangladesh, but otherwise it had very good workforce. Vietnam also gave a complete carte blanche for factories relocating to the country 20-15 years ago, which was better than any government deal in the region, moreover India.

So, Vietnam stole the deal from:

1. India - by having much cheaper educated labour, no unions, and much better deals from the government
   Bangladesh - by being just a bit more cheap, being closer to China, more developed infrastructurally, and having much better deals. BD government really overcorrected on the last one now, but it's too late already
   Indonesia - cheaper, and somewhat better educated labour
2. Myanmar - by having no war
   Philippines - I really don't understand why the country never got any attention from the manufacturing industry.

 

[hist78]

I am my company's go to person for South Asian clients, and we have few running projects there, more with each year, with one real "giant" possibly joining on next year.

The saying is that the entire tech ecosystem of Vietnam is less than that of a single district of Shenzhen, and the same analogy goes for India with Vietnam itself.

It's too late to try to catch up to Vietnam for India. They long missed the timeframe when the collective unconscious of the industry was still deliberating where to go on from China. Now, Taiwanese industrialists have all put a bet on Vietnam, and it's very, very unlikely that they will abandon their investment in Vietnam now.

All of them are waiting for when Apple+few other majors will make a move from China. As of now, the amount of stuff Taiwanese have built in Vietnam can't right match the scale of the industry there yet. Their component factories there are sized for 5-8+ years into future.

"Now, Taiwanese industrialists have all put a bet on Vietnam, and it's very, very unlikely that they will abandon their investment in Vietnam now".

I think it's not a zero or one issue. Those Taiwanese contract manufacturers' operations in Vietnam do not exclude them to have factories in India or in any other countries. In fact the big ones like Foxxcon, Wistron, and Pegatron all have manufacturing operations in India. Granted they are still smaller than those in mainland China and Vietnam.

 

[Paul2]

"Now, Taiwanese industrialists have all put a bet on Vietnam, and it's very, very unlikely that they will abandon their investment in Vietnam now".

I think it's not a zero or one issue. Those Taiwanese contract manufacturers' operations in Vietnam do not exclude them to have factories in India or in any other countries. In fact the big ones like Foxxcon, Wistron, and Pegatron all have manufacturing operations in India. Granted they are still smaller than those in mainland China and Vietnam.

I know Foxonn been in India for a very long time. It tried to get there since nineties. It had a fab working in TN until 2004, and then it exited it despite it being quite a giant investment for them, on par with the "Foxconn city" north of Shenzhen. They weren't able to make it work there, despite starting in India earlier than in China. I know a number of Taiwanese industry oldtimers who were in India at around the same time, none with flattering accounts of their work there. Only Taiwanese companies which managed to stay there were fabless.

All of Taiwanese industry piling up in Vietnam, very much preclude a chance they will move elsewhere. The whole of the industry outside of China is already there, why go somewhere where there is none of it?

 

[count]

India's past challenges have in the past been a combination of bureaucracy, corruption, lack of infrastructure, and culture (by this I mean the sort of collective hive mentality that exists many SE Asian countries does not exist in India, and there is also a disdain for jobs involving any sort of physical labor). This makes it hard to succeed in complex manufacturing industries.

India's strength is the breath and depth of it's technical talent. In industries where this talent is not constrained by the above bureaucracy/corruption, like software, R&D, and design, India does very well.