“Make in India” for chips is very very hard. More than one government and a lot of money has not seen a new growth in India to produce semiconductor chips. Hopes are for operations large enough to satisfy domestic demand and make exports. An agreed upon goal for the country has been simpler than getting it done. A lot of money spent on smartphone factories, data centers, Internet access, and teaching workers has not been enough. This release looks at the problem from a viewpoint of a foreign tech enterprise. What is reality, what is a perception, and what gaps remain to be fixed?
The reality is attracting semiconductor factory investment to India will require changes to policy, incentives to investing firms to reduce risks, and patience. The constraints on speed reflect the cyclic nature of the industry, larger tech trends, and the time required to make things work out.
The growing market in India for complex computer and communications system convinces people there is an Indian market demand. The market is growing fast for 5G network deployment, data centers, and all of the interconnected network for Internet access. This rapid growth is for finished systems. The local perception is for large manufacturers to drag-along their supply chain bringing additional capabilities and capacities to the Indian scene. The reality is there are few local suppliers, suppliers are unwilling to start new operations without investment incentives, and there are even fewer secondary or backup suppliers.
Policy changes required would support industrial development (infrastructure priorities, permitting), incentives for multiple levels of enterprises (not just giant firms), and legal intellectual property protections (processes and elements).
The reality for systems or chips to be manufactured in India:
· supply chain networks must become robust,
· manufacturing capacity across many products must be operating, and
· infrastructure must be built in many states before plants can be built.
The support for an entire industry is the gap. A few colossal enterprises getting money won’t be enough to migrate an entire industry to India. The level of industrial support will require much time to realize any real sizeable gains.
This is the first of a series about the practical gaps to bring semiconductor and systems manufacturing to “Make in India”.
For more analysis and notes see http://www.ekalore.com/india-business
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