India To Offer $1 Billion Reward To Every Chip-Maker Who 'Makes In India’

[Daniel Nenni]

This is certainly an exciting time for the semiconductor industry!

- India is reportedly planning to offer more than $1 billion in cash to each semiconductor company that sets up manufacturing units in the country.

- A senior government official told Reuters that the government as well as private companies will mandatorily procure ‘made in India’ chips so that the new fabrication units have assured buyers for their product.

- India is currently the world’s second-biggest mobile manufacturer after China and looks to establish reliable suppliers for its electronics and telecom industry, especially after the military and diplomatic standoff with Beijing last year.

India To Offer $1 Billion Reward To Every Chip-Maker Who 'Makes In India’

Now that's what I'm talking 'bout!

www.indiatimes.com

 

[soAsian]

wow semis industry got more interesting since covid...

 

[prime007]

The article doesn't say what kind of fab is India expecting/asking for. 90nm, 65nm, 55nm....5nm?

Personal opinion...but I doubt India's offer will garner much interest. Why?
1. $1 billion is not enough
Japan recently offered TSMC several hundred billion yen (or about several billion dollars) to build a fab there and TSMC declined. So India is expecting a different result with their $1 billion offer?

2. India's infrastructure is terrible
As the India Times states, the previous attempt was deterred by India's wobbly infrastructure, unstable power supply and poor planning. It's estimated that the closure of Samsung's Austin fab may cost the company millions of dollars between loss product and lost production days. It doesn't make sense for TSMC, Samsung, GlobalFoundries, etc. to build a fab until India solves their infrastructure problems.

Another problem...the current lack of semiconductor equipment and material suppliers in India. In Taiwan, for example, there's literally a local industry supporting TSMC. A trusted few of them will be moving to Phoenix to support TSMC's US fab here.

3. The "chicken or egg" paradox
The Indian government can proclaim that India's government and private companies will mandatorily procure 'Made In India' chips so that the fab has customers...but that's highly dubious. Suppose GlobalFoundries sets up a fab with their 12LP+ node...would its private companies really use it to build their SoCs, CPUs, GPUs, AI chips to sell to the world if everyone else fabs on Intel 10nm/Samsung 5nm/TSMC 5nm? Will Indian companies be understanding to see their cutting-edge designs constrained by the fab's process node?

Would Indian consumers choose to purchase local products over foreign versions that are generations ahead? History certainly suggests Indian customers (like the rest of the world) will purchase products featuring the latest technologies.

Unless India can convince an Intel, Samsung or TSMC to build a cutting-edge fab in their country...their government & its private companies will continue to source on foreign fabs.

4. "Non-profitable" venture
While the world is realizing the importance of semiconductor fabs...creating your own separate supply chain (like what India is currently proposing) would result in large amounts of "non-profitable" capacity according to Dr. Mark Liu (TSMC Chairman). While Dr. Liu was referring to the US and Europe, I imagine his point would be even stronger with India.

 

[Paul2]

The article doesn't say what kind of fab is India expecting/asking for. 90nm, 65nm, 55nm....5nm?

Personal opinion...but I doubt India's offer will garner much interest. Why?
1. $1 billion is not enough
Japan recently offered TSMC several hundred billion yen (or about several billion dollars) to build a fab there and TSMC declined. So India is expecting a different result with their $1 billion offer?

2. India's infrastructure is terrible
As the India Times states, the previous attempt was deterred by India's wobbly infrastructure, unstable power supply and poor planning. It's estimated that the closure of Samsung's Austin fab may cost the company millions of dollars between loss product and lost production days. It doesn't make sense for TSMC, Samsung, GlobalFoundries, etc. to build a fab until India solves their infrastructure problems.

Another problem...the current lack of semiconductor equipment and material suppliers in India. In Taiwan, for example, there's literally a local industry supporting TSMC. A trusted few of them will be moving to Phoenix to support TSMC's US fab here.

3. The "chicken or egg" paradox
The Indian government can proclaim that India's government and private companies will mandatorily procure 'Made In India' chips so that the fab has customers...but that's highly dubious. Suppose GlobalFoundries sets up a fab with their 12LP+ node...would its private companies really use it to build their SoCs, CPUs, GPUs, AI chips to sell to the world if everyone else fabs on Intel 10nm/Samsung 5nm/TSMC 5nm? Will Indian companies be understanding to see their cutting-edge designs constrained by the fab's process node?

Would Indian consumers choose to purchase local products over foreign versions that are generations ahead? History certainly suggests Indian customers (like the rest of the world) will purchase products featuring the latest technologies.

Unless India can convince an Intel, Samsung or TSMC to build a cutting-edge fab in their country...their government & its private companies will continue to source on foreign fabs.

4. "Non-profitable" venture
While the world is realizing the importance of semiconductor fabs...creating your own separate supply chain (like what India is currently proposing) would result in large amounts of "non-profitable" capacity according to Dr. Mark Liu (TSMC Chairman). While Dr. Liu was referring to the US and Europe, I imagine his point would be even stronger with India.

A boon for a 200mm shop. A jump from no fabs, to at least something that can make discretes is what they need.

 

[Daniel Nenni]

India has a huge amount of semiconductor design talent so creating a fab ecosystem would seem to be a great fit. $1B will not do it but it is a good starting point. Globalfoundries should jump all over this. They are a global foundry, right? Now is the time to push that narrative.

 

[Paul2]

India has a huge amount of semiconductor design talent so creating a fab ecosystem would seem to be a great fit. $1B will not do it but it is a good starting point. Globalfoundries should jump all over this. They are a global foundry, right? Now is the time to push that narrative.

I always struck me how India produces so many semi engineers despite having no semi companies.

Though, if it were for the money, my choice would've been a 200mm for small volume design, and government orders + power, and discretes.

If you take a look on what's on the menu, there is no chance that India will put tariffs on application processors for a significantly worse chip, and even if they would do, big assemblers have put so much money onto the table already, they will simply bare with tariffs.

On other hand, power, and discretes totally for grabs. Out of stuff India manufactures already, it's mostly low end, and appliance stuff, with phones, and EVs, where component costs make much more of the retail cost. Money is there.

 

[hist78]

"If you take a look on what's on the menu, there is no chance that India will put tariffs on application processors for a significantly worse chip, and even if they would do, big assemblers have put so much money onto the table already, they will simply bare with tariffs."

Higher tariffs not only won't help India' semiconductor industry but also will kill the electronic assembly industry.

One of Taiwan's successful strategies back in 1970s and 1980s (and even today) was not put any artificial tariff to protect the semiconductor industry. Any semiconductor businesses in Taiwan must compete and fight their survival in the world market.

This policy and process sometimes were brutal and controversial. Many Taiwan's semiconductor start-ups failed but a few of them came out strongly to become those industry leaders that we know today.

 

[prime007]

Perhaps this older article is referring to the same thing (India's invitation for proposals in setting up a semiconductor fab just WITHOUT the $1 billion incentive)...

Govt invites proposals for setting up semiconductor FAB plants in India

Semiconductors are used in the majority of electronic products today and constitute to be a significant part of the total value of Bill of Material (BOM). Defined by rapid changes in technology, semiconductor manufacturing is a complex and research-intens

www.businesstoday.in

According to the EoI document, Government of India is keen to incentivise and attract investment in setting up of Semiconductor FABs in India. This assumes significance in view of the fact that India is poised to increase its share in global manufacturing of Mobile Phones, IT Hardware, Automotive Electronics, Industrial Electronics, Medical Electronics, IoT and other devices in the near future as it aspires to have $400 billion of electronics manufacturing by the year 2025.

The government has formulated three categories under which the [Expression of Interest] EoI may be submitted. The category A includes well established Integrated Device Manufacturers (IDMs) or Foundries or Indian Company/Consortia with Indian Industry Partner - having state-of-art mainstream CMOS technology nodes for fabricating processors, memories, analog / digital / mixed signal Integrated Circuits. And are keen on setting up/expansion of existing semiconductor FAB in India (preferably with a node size of 28nm or lower, wafer size of 300 mm and capacity of 30,000 WSPM or more). The category B includes well established IDMs or Foundries OR Indian Company/Consortia with Indian Industry Partner having state-of-art compound semiconductor-based emerging technologies for fabricating high frequency/ high power/optoelectronics devices, and keen on setting up /expansion of existing semiconductor FAB in India preferably with wafer size of 200 mm or more. The category C includes Indian Companies /Consortia interested in the acquisition of Semiconductor FAB outside India. Along with the category, the proposals need to have details of the land location, land, water and power requirement, operation details, financial details, financial support desired by the government, technology specifications, operational details, among others.

 

[soAsian]

I always struck me how India produces so many semi engineers despite having no semi companies.

Though, if it were for the money, my choice would've been a 200mm for small volume design, and government orders + power, and discretes.

If you take a look on what's on the menu, there is no chance that India will put tariffs on application processors for a significantly worse chip, and even if they would do, big assemblers have put so much money onto the table already, they will simply bare with tariffs.

On other hand, power, and discretes totally for grabs. Out of stuff India manufactures already, it's mostly low end, and appliance stuff, with phones, and EVs, where component costs make much more of the retail cost. Money is there.

One thing that India got it going for them is their young population. China is aging like Japan and Japan is a old folks home. Unless fab can be totally automated without any human interaction. Going to India have the advantage of young work force and engineers. even USA is aging.

 

[soAsian]

China's young and old rail against raising retirement age

Move to shore up shrinking labor force raises alarm over jobs and child care

asia.nikkei.com

China aging population

 

[tonyget]

One thing that India got it going for them is their young population. China is aging like Japan and Japan is a old folks home. Unless fab can be totally automated without any human interaction. Going to India have the advantage of young work force and engineers. even USA is aging.

Fab is not labour intensive industry, I don't think have a large workforce is a big deal in this area. Remember Taiwan and Korea's aging problem is even worse，the population is shrinking as we speak.

 

[Bill Martin]

One thing that India got it going for them is their young population. China is aging like Japan and Japan is a old folks home. Unless fab can be totally automated without any human interaction. Going to India have the advantage of young work force and engineers. even USA is aging.

If you are talking young population to help design more chips for various applications, then you are correct.
If you are talking about population to staff wafer foundries, human processing went away some time ago in the most advanced foundries. Humans contribute too much contamination for financially viable line yields. facial hair, make up, cigarette smoking besides what they clothes/shoes come in contact with provide an abundance of large particles. The best way to minimize particles is to remove humans and automate the entire fab. This includes having chaseways where people can perform maintenance without entering the fabrication (super clean processing area).