A Dynamic India uses huge numbers of computer systems. The "Make in India" push wants these to be manufactured locally. In a supply chain global economy most systems are produced in East Asia. There are barriers to bringing this quickly to India even with government money and a huge local market.
The systems require colossal numbers of components:
· Power supplies (and power semiconductors)
· CPU chips
· Communications chips
· Storage/memory chips
· Enclosures
· Computer circuit boards
· Connectors
· … and many more.
With anything not currently manufactured in India having to be imported.
This is much the same pattern as many “knock-down” kits used to assemble vehicles for the Indian market. The hope for pursuing smartphone factories was to gradually produce more components in the kits locally to “migrate” manufacturing supply chains to local. The attraction is favorable tax/tariff/fee treatments to get the factory started and attract suppliers to the outsource smartphone makers. (Foxconn, etc.) Kitting is being used now to manufacture some smartphones in India with more yet to start production.
Each ‘subassembly’, or component, in a kit can be complex. These are much like vehicle components like interiors, suspensions, decoration, heating/cooling/vents, etc. For electronic subassemblies the manufacturing processes are even more complex requiring raw materials, chemicals expended during the process, expendables during manufacturing, and testing equipment. The simplified supply chains for even intermediate steps adding value can require 100 or more suppliers (as has already been identified by Vedanta and Foxconn). The paperwork process of simply getting all of these entities from pre-existing supplier networks established in India is a calendar-consuming problem.
The gap between external perception of a progression from an imported-kit operation and a full technology stack manufacturing concentration is very large.
This is part of a series on brining semiconductor manufacturing to a Dynamic India.
For more analysis and notes please see our continuing series on http://www.ekalore.com/india-business
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