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India almost became a big semiconductor manufacturing country Now, what's the chance to do it again?
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- Time of issue:2022-10-19 11:04
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(Summary description)
India almost became a big semiconductor manufacturing country Now, what's the chance to do it again?
- Categories:News
- Time of issue:2022-10-19 11:04
- Views:
When it comes to the history of semiconductor development in India, few people know that in terms of semiconductor manufacturing, India may have almost become a global semiconductor manufacturing center, but an accident that happened changed history forever. When Fairchild, the mother of Silicon Valley semiconductors, considered outsourcing semiconductor packaging and testing to Asia in the 1960s, she considered India. Later, she was frightened by India's corrupt bureaucracy and went to Malaysia, the Philippines and other countries.
The history of semiconductor in India
In the 1980s, India planned to develop its own semiconductor manufacturing, and studied the experience of South Korea, Taiwan, China and other countries that were also developing at that time, and adopted almost the same way as Taiwan. Therefore, the state-owned semiconductor manufacturing company SCL was established with government funding.
Like Taiwan, India's SCL is mainly state-owned, and then it also tries to find some private capital to invest. Taiwan UMC was established in 1980, TSMC in 1987, and SCL in 1984.
In Taiwan Province, the Institute of Electronics, led by Yang Dingyuan and others, transferred RCA technology to the secondary semiconductor manufacturer in the United States; India is led by IIT and transferred to AMI, a secondary semiconductor manufacturer in the United States; Taiwan Province made extensive use of the relationship between Chinese in Silicon Valley, while India made extensive use of the relationship between Indians in Silicon Valley, and the relationship between IIT and the United States was closer than that of Taiwan Province Jiaotong University at that time.
At first, Taiwan Province made electronic watch IC, while India also made microprocessor besides electronic watch IC. The difference is that Taiwan Province finally used the relationship of overseas Chinese students who returned to Taiwan Province to find a buyer in Hong Kong. At first, India not only guaranteed the purchase by the government, but also cooperated with top American and Japanese companies (Hitachi and Rockwell) to sell them electronic watch IC and microprocessor, which was a better start than Taiwan Province.
Taiwan Province has set up a science park, and India has also set up a park to cluster related industries. Although Taiwan Province's technological progress was rapid at that time, India's progress was even faster. In 1984, the 5 micron was only one generation behind the 0.8 micron technology of Intel, NTT and Toshiba, which were the world's leading manufacturing technologies at that time. At this time, Taiwan Province's TSMC was just established. India also buys advanced semiconductor manufacturing equipment from the Netherlands, Japan and other countries, and there is no problem in international procurement.
At that time, the "hard injury" that India lost to Taiwan Province was infrastructure and bureaucratic efficiency, especially the supply of water and electricity. Although the local government of India fully cooperated, it still couldn't be compared with Taiwan Province. Besides, most conditions in India are the same as those in Taiwan Province, and some of them are even better than those in Taiwan Province.
In short, Indian SCL, which was established three years earlier than TSMC, is more likely to become the world semiconductor giant than TSMC.
But why does India have to beg TSMC and Hon Hai to set up factories in India today? What happened in the middle?
It turned out that in 1989, a fire broke out in SCL factory building, which completely burned the factory building. The cause of the fire is unknown, and various speculations are flying all over the sky, ranging from accidents, arson, cheating insurance money, to political factors of producing chips for the army, etc., but there is no evidence.
In a word, this one burned out the hope of Indian semiconductor, and it took eight years for India to raise enough funds to re-enter the semiconductor industry. Unfortunately, Samsung had already risen at that time, and TSMC was rushing to catch up. India had already lost its excellent opportunity and ended in complete failure.
If it weren't for that fire, it's hard to say whether the world's semiconductor power will be India today, but once history diverges, it's hard to turn back. Now India, a semiconductor manufacturing power, may only happen in another parallel world.
India will fight the semiconductor market again, and Hon Hai Vedanta Joint Venture Wafer Factory will be put into operation in 2025 at the earliest.
Since the United States imposed tariffs on imported goods from China in March 2018, the opposition between the two sides has become increasingly fierce, and the competition field has also extended from the economic level to the political level, which not only brings geopolitical risks, but also makes the industry aware of the necessity of localization and diversification of supply chains.
At the beginning of 2020, the COVID-19 epidemic spread rapidly, leading to the chain-breaking crisis in the global supply chain, and the demand for home office and online learning caused a serious shortage of semiconductor components. Under the interactive influence of geopolitics and the spread of COVID-19 epidemic, the demand for localization of supply chain is increasing continuously, among which the localized production of semiconductor attracts the most attention.
Since last year, the United States, the European Union and Japan have planned or introduced specific domestic semiconductor manufacturing subsidy bills to attract semiconductor manufacturers to invest and set up factories.
For example, the latest American Chip and Science Act in the United States includes the "Chip Act" with a subsidy of $52 billion for semiconductor manufacturing;
The European Chip Act of the European Union has been officially launched, and it is estimated that 43 billion euros will be invested to build a local semiconductor supply chain; Japan passed the Semiconductor Assistance Law and plans to raise 600 billion yen to support the local semiconductor supply chain.
In this context, India also plans to spend $30 billion to promote the establishment of local semiconductor supply chain.
On February 14th this year, Hon Hai announced that it had signed a memorandum of cooperation with Vedanta, a large multinational group in India, to jointly establish a joint venture company to manufacture semiconductors in India. According to the memorandum of cooperation signed by both parties, Vedanta will hold a majority stake in the joint venture company, while Hon Hai will hold a minority stake; Anil Agarwal, chairman of Vedanta, will be the chairman of the joint venture company.
In September this year, Hon Hai Group officially signed a Memorandum of Cooperation (MOU) with Vedanta, a large multinational group in India, on the establishment of a semiconductor and display factory in Gujarat, India. The relevant investment amount will reach 20 billion US dollars.
Among them, Rs. 945 billion (USD 11.95 billion) in the project is used to build a new factory for producing monitors. Another 600 billion rupees (US$ 7.58 billion) is used for chip-related production, including semiconductor manufacturing, packaging and testing.
Akarsh Hebbar, the global managing director of Vedanta Semiconductor and Display Division, recently confirmed to the reporter of China's Taiwan Province media "Central News Agency" that both parties are focusing on settling down in Dholera, Guchaladi province. The first phase of the factory area is scheduled to be 400 acres, and the evaluation work has been completed, which is almost at the "finalization" stage.
"This will be the beginning of the first stage of electronic manufacturing, including semiconductor chips and display glass," he said.
Guradi province is the hometown of Indian Prime Minister Narendra Modi. After the news that Hon Hai cooperated with Vedanta to produce semiconductors came out, many provinces put forward various preferential measures to try to set up factories.
Heba said that the factory is currently planned to be put into operation in 2025 or 2026, producing 28-nanometer 12-inch wafers, with an initial monthly output of 40,000 wafers, and full-speed production after a year.
He said that the 28-nanometer process is a mature technology, and it is the most common type of semiconductor chips. It can be used in information and communication technology equipment, automobiles, washing machines, laptops and mobile phones, etc., and has a wide range of uses.
When asked about the integrity of India's electronic industry chain, water and electricity supply and other issues, Heba replied that Vedanta was one of the first companies in India to own a clean room, and there was no problem in building a clean room. Gujarati province also promised to send water and electricity to the scheduled site of the factory, and provided many rewards and concessions.
In an interview, he also predicted that in the future, more than 100 third-party manufacturers from China, Taiwan Province, South Korea, Japan and the United States will be stationed near the factory area to form clusters.
It is worth mentioning that in February this year, the Indian government issued a statement saying that it has received investment proposals worth 20.5 billion US dollars from five companies, planning to build manufacturing semiconductor factories and display factories in India. Among them, in addition to the joint venture project between Hon Hai and Vedanta, Singapore's IGSS Ventures and ISMC also plan to invest US$13.6 billion to build a chip factory in India to manufacture chips for various products such as 5G equipment and electric vehicles.
In March this year, Indian industrial organization-Indian Semiconductor Mission (ISM) also announced that it planned to modernize the semiconductor laboratory (SCL) in Mohali as part of the upgrading of semiconductor manufacturing capacity. A report of the Standing Committee on Communication and Information Technology of the Indian Parliament details the plan of updating and upgrading Mohari SCL equipment, and ISM will be specifically responsible for this work.
This series of actions also shows India's desire to become a global semiconductor manufacturing power.
At present, the population of India is the second largest in the world, with a total population of 1.42 billion in 2021. According to United Nations estimates, the population of India will surpass that of China in 2027.
The rising population and sustained economic growth will inevitably support the huge domestic demand market. Coupled with the current improvement of India's electronic manufacturing industry chain, the Sino-US trade war has also made manufacturers such as Apple accelerate the transfer of production capacity to Southeast Asian countries such as India, which also makes India's domestic demand for semiconductors more and more attractive to overseas semiconductor supply chains.
However, in terms of talent management and infrastructure construction, semiconductor manufacturers going to set up factories will still face challenges.
For example, in terms of talent management, the local caste system, cultural barriers and influential trade unions have brought a lot of invisible management costs to electronic foundry manufacturers. In the future, the semiconductor supply chain is bound to face similar management problems.
In terms of infrastructure, the semiconductor supply chain needs a large number of stable water resources and electricity, as well as safe and reliable logistics routes, but India's infrastructure is still insufficient.
India's $1.3 trillion infrastructure plan in 2021 is in its infancy, and it is still a challenge whether the semiconductor supply chain can successfully obtain enough and perfect development space in the future.
Source: xinzhixun
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