According to the latest reports of defense science and technology (public number: defense technology). India is planning to become the world's largest semiconductor manufacturing hub within the next five years, according to Ashwini Vaishnaw, India's Minister of Electronics and IT revealed at ExpressAdda last Saturday. To this end, the Indian government will invest significant funds and resources to ensure a sound ecosystem that will support the country's growing semiconductor industry. This ecosystem will include manufacturing, design and testing, and will work with leading international companies to improve the country's technology level and production efficiency. Seeing this, one can't help but ask: Why is India so confident?
In fact, the reason why India is so confident is because the country's production costs are relatively low.
In December, India officially announced a $10 billion semiconductor manufacturing plan, which is awaiting factory approval. The main objective of the program is to build a complete ecosystem in the next 4 to 5 years to establish India as the world's largest semiconductor manufacturing hub. However, this is a very complex task, and India faces some challenges in starting and sustaining semiconductor manufacturing. In this process, the Indian government needs to take appropriate measures to ensure the successful implementation of this plan.
In the presence of U.S. and Indian consultants, an initiative called "iCET" was officially launched in Washington on January 31. The initiative, which aims to strengthen U.S.-India cooperation in areas such as artificial intelligence, quantum technology, telecommunications, and space, is a continuation of a plan jointly launched by U.S. President Joe Biden and Indian Prime Minister Narendra Modi last May to further enhance and expand their strategic science and technology partnership and promote cooperation in the defense industries of the two countries. This is also one of the latest measures taken by the United States to actively attract allies to counter China.
The United States plans to increase the deployment of Western cellphone networks in South Asia, attract more Indian chip experts to the United States, and encourage companies from both countries to cooperate on military science and technology projects. Although the United States has been working to build an alliance with India, it still faces various obstacles. According to Reuters, the United States has many restrictions on military technology transfer and foreign migrant visas.
In addition, India's dependence on Russia has become a potential problem. Despite misgivings, America's top priority remains the development of a scientific and technological alliance. "Basically, this situation depends largely on the success of high-tech and industrial innovation policies, which are at the heart of President Biden's entire strategy," Sullivan said. We cannot ignore the Chinese and Russian factors, but building a high-tech ecosystem is also crucial. ”
According to the Washington Post, U.S. and Indian science and technology cooperation will focus on semiconductors, 5G and 6G wireless network infrastructure and lunar exploration. Officials revealed that the two governments aim to support India's development of an indigenous defense industry to meet its domestic defense and export needs. It is worth noting that although India is a member of the US-led Indo-Pacific Economic Architecture, it is not involved in the trade pillar negotiations. For India's semiconductor industry, we need to dig deeper into whether its strength is really strong enough.
On December 15, 2020, India's Ministry of Electronics and Information Technology launched a program called "Letter of Intent" to provide incentives to manufacturers interested in setting up chip factories in India and determine what specific measures should be offered. A year later, on December 15, 2021, India approved an incentive scheme worth Rs 76,000 crore for silicon fabs, other types of semiconductor fabs, semiconductor design and display fabs.
Surprisingly, one year after the announcement of the plan, the approval process for the first batch of applications has not yet been completed, including three silicon fab applications received on February 15, 2022. Federal Minister Ashwini Vaishnaw said on Feb. 24 that the Indian government will conduct a detailed assessment of the application for the mega semiconductor program and expects to complete the entire process and sign the agreement with the company in the next 8 to 10 months.
Japan, the United States and other countries, almost at the same time as India began planning semiconductor incentive programs, there are already a number of new fab construction cases, and even ready to introduce semiconductor equipment into the region. However, specific details and timing remain undecided. The wavering rhetoric has heightened fears that the global semiconductor industry could face a recession.
In the context of the current Sino-US chip war, whether India is really determined to lay out in the semiconductor industry is a question in the minds of many people. Even if the construction of a semiconductor manufacturing plant is finally realized in 2023, the possibility of another missed opportunity due to other policy changes cannot be ruled out. In addition, it is also unknown whether the packaging of semiconductor chips and the assembly of final products can be completed in India.
After all, the Indian government's decision-making and bureaucracy often delay the process, leaving many manufacturers with the dilemma of whether they should set up a factory in India. At the same time, Vietnam is actively seeking to share this huge market share.
In recent years, the Vietnamese government has invested a lot of money, billions of dollars to set up research and education centers, aiming to attract major chipmakers to Vietnam. Samsung, the world's largest memory chip maker, has also pledged to invest another $3.3 billion in Vietnam in 2022, with plans to start producing chips by July 2023.
At the same time, the Indian government also claims that its semiconductor mission is a big plan for 20 years. It can be seen that the Vietnamese government has made remarkable achievements in attracting chip manufacturers, and there are more opportunities and challenges waiting for them to explore in the future.
While it is gratifying to outline an ambitious vision, it will be difficult to achieve without a realistic short-term action plan. When the next wave of semiconductor prosperity arrives, this vision will not be realized without the support of concrete actions.
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