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Fund crunch tempers India’s chip dreams
MUMBAI: India’s ambitious plan to be a major player in semiconductors, taking on the Chinese and churning out locally-made chips for a new generation of smartphone
MUMBAI: India’s ambitious plan to be a major player in semiconductors, taking on the Chinese and churning out locally-made chips for a new generation of smartphone users, has proved to be a little too ambitious.
The government boldly announced three years ago that it would host two new $5 billion (Rs 33,500 crore) chip plants as part of a project to become a global manufacturing powerhouse, creating thousands of jobs, reducing its need for imports and taking on global rivals such as Taiwan Semiconductor Manufacturing and Global Foundries.
But potential investors have not materialised, put off by India’s wobbly infrastructure, unstable power supply, bureaucratic red tape and poor planning, according to analysts and industry insiders.
Just weeks after Jaypee Infratech, which was partnering IBM Corp and Israel’s Tower Jazz, abandoned plans for one of the big chip plants, ST Microelectronics NV is set to scrap plans to build the other $5 billion plant as its main local partner failed to raise enough money from skeptical investors, government officials said.
“We’ve had a lot of issues with the original (semiconductor) plan,” a top official at India’s Department of Electronics and Information Technology (DEITY) told Reuters. “The technology curve has moved ahead in the last three years, the global environment has changed and China has emerged as a big player.”
India is now toning down its ambitions and setting its sights on low-end chip making, the government officials said.
“We can start by manufacturing components such as PCBs and ICs locally, and that will give a much-needed boost to manufacturing in India,” said one of the two top government officials.
“It’s crazy if India thinks it can compete with China on something like chip manufacturing when our electronics industry is a shambles,” said Ganesh Ramamoorthy, an analyst at research firm Gartner.
