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Nilgiri

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NEW DELHI : Nineteen companies have applied to avail the benefits of the government’s production-linked incentive (PLI) scheme for manufacturing IT hardware in India, the Centre said on Tuesday.

The scheme was announced in March and is similar to the one announced last year for the local manufacture of mobile phones.

The applicants for IT hardware production include 15 domestic companies and four global firms.

Along with multinationals Dell, Wistron, Rising Stars Hi Tech (a Foxconn subsidiary) and Flextronics, domestic manufacturers such as Lava, Micromax, Dixon Technologies, Infopower, Syrma Technologies, Neolync Electronics, Optiemus Infracom, Netweb Technologies, Smile Electronics, Panache Digilife and RDP Workstations have expressed their interest to manufacture IT hardware components such as laptops, tablets, all-in-one personal computers (AIOs) and servers.

The PLI scheme for IT hardware offers an incentive of 2-4% on net incremental sales of goods over the base year of 2019-20. The benefits will be available till 2024-25, starting 1 April 2021.

According to government estimates, companies eligible for the scheme will be producing IT hardware worth ₹1.6 trillion over the next four years. Out of this, exports will account for 37% or ₹60,000 crore.

The government said that the scheme will facilitate investments worth ₹2,350 crore in India’s electronics manufacturing space and generate 37,500 direct employment opportunities.

India’s domestic value addition in IT hardware manufacturing is expected to grow from 5-12% to 16-35% over the next four years, it added.

“The world is looking at India as a destination to manufacture, and participation in the scheme by global companies is a resounding vote of confidence to the current government’s policies," said Pankaj Mohindroo, chairman of the India Cellular and Electronics Association (ICEA), the apex industry body for homegrown electronics companies.

While the industry welcomed the move, global supply of chips and other components have affected the ability of local manufacturers to meet the target set under the scheme.

The ICEA had written to the government in March, requesting to revise the base year for paying PLI benefits to 2020-21 instead of 2019-20.

The industry body said that 15 out of the 16 PLI applicants for producing mobile phones will not be able to meet the targets required under the scheme.

Unlike the PLI scheme for IT hardware, the incentives for the mobile manufacturing scheme were to be paid out from 2020.

According to an industry executive, the matter is currently under review at the ministry of electronics and information technology (MeitY), and the government hasn’t said no to reviewing the base year yet.

According to a report from Counterpoint Research, the global chip shortage may extend further since Taiwan, which accounts for nearly 70% of all chip manufacturing, is facing its worst drought in more than 56 years.

“Taiwan dominates semiconductor production globally due to its unique position in the foundry and outsourced assembly and testing (OSAT) industry. Semiconductor mass production also uses some of the most advanced technologies, which make setting up a production unit a high-investment and time-consuming affair. This is why the current drought in Taiwan has set alarm bells ringing the world over," wrote Brady Wang, semiconductor analyst at Counterpoint Research, in a blog post.
 

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“Taiwan dominates semiconductor production globally due to its unique position in the foundry and outsourced assembly and testing (OSAT) industry. Semiconductor mass production also uses some of the most advanced technologies, which make setting up a production unit a high-investment and time-consuming affair. This is why the current drought in Taiwan has set alarm bells ringing the world over," wrote Brady Wang, semiconductor analyst at Counterpoint Research, in a blog post.
Would india manage to produce a fab with more than just 1b dollar?
Even if it does how much time till it reaches to TSMC or Intel level?
 

Nilgiri

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Would india manage to produce a fab with more than just 1b dollar?
Even if it does how much time till it reaches to TSMC or Intel level?

1 billion is low but its better than decades now of zero hard commitment from GOI...and it will get the ball rolling I think.

i.e 1 billion is just a sweetener to a private conglomerate that say JV's with a bigger foreign developer + supply chain on a bulk use chip fab of some sort.

Those two will have to do the most legwork/analysis on bringing such to India....say something in 28nm - 130nm that will remain very relevant for long time in large process bulk use of mobile computing and networking.

Automotive is probably the industry India can use to leverage first here.

Then over time the ecosystem grows and deepens to lower nm "cutting edge" as Indian economy grows and matures in more industries.

TSMC/Intel level (w.r.t India) cannot be projected now in any time frame, that is open ended hypothetical with a huge amount of things needing to go correctly for many decades in the more bulk-areas first to sustain the top tier thresholds later.

Right now focus must be on grabbing the low hanging fruit as far as possible.
 

Nilgiri

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May our covid crisis be over soon 🙏.....so we can get back to putting foot on gas pedal, as a tribute to all those precious lives we have lost.

 

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HYDERABAD: US-based semiconductors and wireless technology giant Qualcomm is setting up a mega facility spread over nearly 1.6 million sq ft at a SEZ in Hyderabad. This will be the largest SEZ leasing deal in Telangana. It will also be Qualcomm’s largest facility in India.

The Qualcomm facility, to be housed over 17 storeys at the Sustain Properties Pvt Ltd SEZ being developed by K Raheja Group at Raidurg, will entail an investment of Rs 3,904 crore and will create about 8,700 jobs over the next five years, the Visakhapatnam Special Economic Zone (VSEZ) said on Monday.

The mega SEZ facility is expected to generate IT services exports to the tune of Rs 28,658 crore over the next five years, it said.

The project has also received approval from the unit approval committee of VSEZ at a meeting held recently. All SEZs in Telangana fall under VSEZ.

Qualcomm will start with taking possession of four storeys at the SEZ in September and ramp it up with the facility expected to be fully operational by September 2022, VSEZ development commissioner A Rama Mohan Reddy said.
The company is intent on setting up its own campus at an investment of $400 million. The deal was initially announced by the Telangana IT & industry minister KT Rama Rao's office in October 2018 but the campus proposal was learnt to have been ditched as the land initially identified for the project turned out to be a disputed one.
Following this, the US giant is learnt to have decided to opt for a leased facility in the city, where it already has a couple of facilities that it will be consolidating in the upcoming SEZ facility, sources said.
 

Nilgiri

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Nilgiri

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8000 cr INR = about 1.1 billion USD

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