Two Indian officials revealed to the media that India hopes to establish its own smart phone assembly industry to strengthen the electronic supply chain. For this reason, India plans to provide $654.38+0 billion in cash to every enterprise that sets up a chip factory.
Is cash encouragement reliable?
According to a senior Indian official, "the government will give every company that sets up chip manufacturing business a cash reward of more than 1 billion dollars". Indian officials are quite confident in the sales of chips. He said: "We assure them that the government will buy and will order private enterprises to buy locally produced chips."
Chen Jing further analyzed that the production of chips needs more than 1000 processes, and few companies can contract the whole industrial chain of chips. In order to improve efficiency, many factories only specialize in a small part of the industrial chain, with clear division of labor and very high requirements for logistics convergence. Therefore, India cannot simply solve the problem of chip supply by introducing one or two chip companies.
On the other hand, it seems attractive that India provides 654.38+billion US dollars in rewards or subsidies for each enterprise, but Chen Jing said that it is hardly a large sum of money for chip companies. He said: "In the chip industry, it is very common to spend $654.38 billion to build a new factory. Moreover, upstream and downstream construction needs more funds. "
Another Indian government source also revealed to the media that "how to distribute these cash rewards has not yet been finalized", but the government has solicited opinions from relevant industries. However, the source added that the Indian government can also provide other preferential measures for enterprises, including tariff exemption, R&D fees and interest-free loans.
Indian chip industry
At present, most smartphones used by Indians are produced or assembled in India. India has become the second largest mobile phone manufacturer in the world after China. The electronics industry is one of the fastest growing industries in India, which mainly relies on consumer electronics products and key industries such as information technology and telecommunications to drive growth.
Because importing a large number of chips from abroad every year consumes a lot of foreign exchange reserves, India realized the importance of developing its own chip manufacturing industry in the last century.
In 20 12, India has issued very specific electronic manufacturing support plans, including "Improved Special Award Plan (MSIPS)" and "Integrated Circuit Manufacturing Incentive Plan" to provide policy and financial support for Indian electronic manufacturing enterprises.
Backward infrastructure, unstable power supply, complicated bureaucratic procedures and unsustainable planning failed to cultivate successful local chip companies and attract foreign chip manufacturers to settle in India. Moreover, India has always implemented strict trade protection policies. Even though some foreign companies with chip manufacturing technology settled in India, they finally chose to leave India due to trade environment and other factors.
After Modi government, which encouraged "Made in India", came to power, the development of local chip industry was put on the agenda again.
On April 1 2020, India successively issued two plans to promote the development of electronic industry, namely, Production Linkage Award Plan (PLI) and Electronic Components and Semiconductor Manufacturing Promotion Plan (SPECS), to encourage the development of chip and electronic industry in China.
After the outbreak of the epidemic, the global "lack of core tide" broke out, and India's smart phones, automobiles and other industries were affected, which further prompted the Indian government to think about how to develop the local chip industry. Indian companies, such as Tata Group, have expressed their intention to enter electronics and high-tech manufacturing.
However, some observers pointed out that although India has difficulties in chip manufacturing, it has certain advantages in the semiconductor industry, especially in the field of chip design. The Indian city of Bangalore is called "Silicon Valley of India", and Google and Apple also have chip design teams in the local area.
At the same time, there are a large number of Indians or Indian executives in the international chip industry. These factors are the advantages for India to develop local chip manufacturing.
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