More than 10 years ago, the "advertising company" Google started making chips called TPUs. So, what is your point exactly here? As an aside, there is a pretty big boom of semiconductor manufacturing in India (in the planning/commissioning stage) based on a government incentive program floated a few years ago where there's a 1:1 PLI matching scheme by the government (eg: $100M of spend will get you a $100M funding matched by the government). This has resulted in companies like Foxconn at one point deliberating [0] entering the semiconductor manufacturing space in India, besides other local high-market-cap companies like Vedanta and Reliance.
It is important to not leave out the context that Google needed TPUs for their AI development. Now the question is what does Zoho email and office software gain from fabricating custom chips?
10 years ago, Google was already one of the largest companies in the world - and even then they never got into IC fabrication; they had the parts made for them by an established foundry.
Good point about IC fabrication vs creating a chip's design. Anyway, creating a non cutting-edge IC fab is actually not as capital intensive as it may seem, and that there are quite a few fabricators doing >=28nm fabrication.
$700 million is a really cheap semiconductor plant - I wonder what node size that fab was? Maybe they got an estimate on how much a competitve semi plant really costs - and its in the tens of billions of US$.
The govt has schemes which will refund up to 50% of the investment. Unfortunately the way these schemes are implemented, unless you have the money upfront, you can’t even start.
In short, it’s a reimbursement after some months/years, not a grant or investment.
So, they got $200M and only then realized that:
Yet as the company dug into the requirements—extreme-UV lithography, sub-10 nm process nodes, global supply-chain partnerships—it realized that building a modern fab is an order of magnitude more complex than spinning up a new data center.
> Zoho was in talks with the Department of Electronics & IT under India’s Semiconductor Mission, and reports reveal that they had set aside some $200 million for a pilot 28 nm wafer line in Tamil Nadu.
My guess is 28nm is already an aging node, and by the time any fab based on it becomes operational, the technology will be even more obsolete. It’s hard to predict what the market will look like then. You can't expect a private company to pour billions into a dicey market.
This is a case where free-market capitalism doesn’t work. You really want a government pitching tens of billions of dollars to get to the cutting edge fast, not expecting companies to foot the bill and just dangle a few incentives.
Frankly, for India, the entire semiconductor ambition feels like putting the cart before the horse. It won't create jobs, most value will be captured by fab owners. The smarter approach would be top-down: start with component assembly, then build up CNC machining, injection molding, and other foundational industries that can fill in the gap for components. Only after that should we talk about high-value semiconductor manufacturing.
India lacks even the most basic manufacturing. We import stuff like lighters, toys, and basic electronics. Why do we want to make the giant leap to semiconductors?
Unfortunately, Indian policymakers are more interested in optics than in long-term industrial planning.
The general public forgets that old nodes are the vast majority of what's made in fabs.
Cars, most appliances, military, etc all run on old nodes. They're not running cutting edge stuff. Desktop PCs and gaming stuff is nothing compared to the reliable bulk orders that last years for a car line or a line of washing machines.
india does not lacks it, its not price competitive as compared to china which has better supply chain and economy of scale.
India and other countries are not going in fab for jobs but for self-reliance.
Going for high-value semicon later is similar to the logic of removing poverty first before investing in space tech. It doesn't work that way.
India had sound policies it was quite ahead of time when it created SCL, check this video for more https://www.youtube.com/watch?v=isBYV6QWDIo
it does lacks execution though and had some bad luck.
India does have 130nm plants right now its obsolete node but works fine for low volume needs of its govt.
India has a significant industrial manufacturing sector, contributing heavily to its economy and global trade. Key areas of manufacturing include textiles, steel, automobiles, pharmaceuticals, and electronics. The country has the world's second-largest steel production and is a major exporter of textiles and clothing. The "Make in India" initiative aims to boost manufacturing growth and create jobs.
Major Industries and Their Importance:
Iron and Steel:
India is the world's second-largest steel producer, with major players like SAIL and private companies like Jindal Stainless and JSW Steel.
Textiles:
India is a major exporter of textiles and clothing, with a strong domestic textile industry serving both local and global markets.
Automobiles:
Chennai, Pune, and the National Capital Region (NCR) are major hubs for automobile manufacturing.
Pharmaceuticals:
Hyderabad and Bangalore are key centers for pharmaceutical manufacturing.
Electronics:
The electronics sector is experiencing growth, with government initiatives to promote domestic manufacturing.
Other Key Industries:
The Indian economy also features significant manufacturing in areas like cement, paper, and petrochemicals.
Steel, textiles, pharma, auto etc. are all relatively "primitive" stages of manufacturing. Parent comment is probably talking about manufacturing precision tools and complex micro-electronics at a gigantic global-level scale like China and Taiwan, as is required for semiconductor-related stuff. India's electronics manufacturing is absolutely nowhere near industry leaders.
I am not a manufacturing expert, although I do have some experience developing software projects for two manufacturing companies, but overall, I think I have enough broad industry knowledge, both as a software developer and an educated and widely-read layman, to say that steel and textiles maybe primitive or basic industries, but pharma and auto are more than that.
My reply to him was about exactly that (the "basic" part), and nothing else.
So, this part of your comment is actually corroborating my point:
>Steel, textiles, pharma, auto etc. are all relatively "primitive" stages of manufacturing.
The rest of your point (about the advanced stuff) is irrelevant to this particular small subthread starting from that quoted point, even if relevant overall.
>India's electronics manufacturing is absolutely nowhere near industry leaders.
I never said it was. So you are disputing a point I never made.
And India does make some more advanced stuff too, but I will not bother to get into that; you can look it up yourself, if so inclined. I anyway gave many Wikipedia and other links above.
Except for one below, which is worth giving separately:
>The Indian Space Research Organisation (ISRO /ˈɪsroʊ/)[a] is India's national space agency, headquartered in Bengaluru, Karnataka. It serves as the principal research and development arm of the Department of Space (DoS), overseen by the Prime Minister of India, with the Chairman of ISRO also serving as the chief executive of the DoS. It is primarily responsible for space-based operations, space exploration, international space cooperation and the development of related technologies.[3] The agency maintains a constellation of imaging, communications and remote sensing satellites. It operates the GAGAN and IRNSS satellite navigation systems. It has sent three missions to the Moon and one mission to Mars.
>ISRO built India's first satellite Aryabhata which was launched by the Soviet space agency Interkosmos in 1975.[8] In 1980, it launched the satellite RS-1 on board the indigenously built launch vehicle SLV-3, making India the seventh country to undertake orbital launches. It has subsequently developed various small-lift and medium-lift launch vehicles, enabling the agency to launch various satellites and deep space missions. It is one of the six government space agencies in the world that possess full launch capabilities with the ability to deploy cryogenic engines, launch extraterrestrial missions and artificial satellites.[9][10][b] It is also the only one of the four governmental space agencies to have demonstrated unmanned soft landing capabilities.[11][c]
ISRO's programmes have played a significant role in socio-economic development. It has supported both civilian and military domains in various aspects such as disaster management, telemedicine, navigation and reconnaissance. ISRO's spin-off technologies have also aided in new innovations in engineering and other allied domains.[12]
>India lacks even the most basic manufacturing. We import stuff like lighters, toys, and basic electronics. Why do we want to make the giant leap to semiconductors?
I already answered you more than once about your misconceptions or misinformation about Indian basic manufacturing, in my sibling comments to this one.
And as others have said, importing is not done only due to inability to make the products at home. Sometimes it is done for pure cost /benefit reasons. That should be pretty damn obvious to anyone, but looks like you missed that out in your assessment. Even so-called first-world / developed countries do it. What do you think the outsourcing from such countries to India for software development is about? It is about exactly that, at least some. You are a software guy, so you should know this. I am one too. If you work for them, do you think they would hire you in India, all other things been the same, if your price was the same as equal people in the US or Europe? Of course not. It would be easier for them to deal with their local people than someone partway or halfway across the world. Get real.
Do you know that we also export plenty of things, many of which go to developed countries too, and to other developing countries, and that some of the latter cannot manufacture some of the things we do?
As for your point about why we manufacture or are trying to manufacture semiconductors, that has also been answered by others, so I will not comment. Having some amount of self-reliance is the answer. Not just profit.
Same for our space program, satellites, etc, which I did comment about in reply to somebody else in this thread.
It seems you're the one who's plenty misinformed. Most countries outsource when labour costs in their own country inch higher and it makes sense to use cheaper external labour supply. Same is not the case with India, where labour costs are still extremely cheap. Even with sky-high import duties, we're not competing with China.
I never said we don't manufacture. There are few notable industries that we are decent at and export it as well: two wheelers, pharma. But we manufacture only teeny tiny bit of mass-manufactured goods, especially electronics.
Self-reliance makes no sense when you're trying to one component out of hundreds involved. Sure, it won't be entirely useless, it will decouple some of the chip imports for defense and auto, but it will do nothing to bootstrap the electronics industry.
I have to post another comment, even though I said I would not in my previous one, because your comment is so ignorant;
>There are few notable industries that we are decent at and export it as well: two wheelers, pharma. But we manufacture only teeny tiny bit of mass-manufactured goods, especially electronics
Note highlighted words and compare them with what I say below, people.
Check the result of this Google search that I just did:
>highest selling 100 cc motorcycle in the world
And an excerpt from the results:
>The Hero Splendor is the highest-selling 100 cc motorcycle in the world. It is a popular commuter bike in India and is known for its fuel efficiency and low maintenance. The Splendor consistently leads the 100 cc segment in sales, and Hero MotoCorp, its manufacturer, is the world's largest two-wheeler manufacturer by volume.
If that is not a mass manufactured good, I don't know what is.
>Self-reliance makes no sense when you're trying to one component out of hundreds involved.
What the heck does "trying to one component" mean? Ungrammatical again.
Overall, your comments are full of falsehoods and crap.
"lacks even the most basic" implies that we don't have the higher stuff too. That in turn implies that we don't have any. All of which is false, based on the earlier links that I provided. Are you saying that those are lies? (Also anyone can google that info for themselves.) Then be open about it, and say so directly.
That was such a global, wide-ranging and patently false and pretty insulting statement (even if ignorantly done) that you made about Indian manufacturing.
Many top Indian multi-hundred-crore-or-multi-thousand-crore turnover (in rupees) industrialists or groups like the Tatas, Birlas, Bajajs, Singhanias, Thapars, Godrejs, TVS group, TTK group, Munjals, Ambanis, Premjis, and many more, may like to have a word with you, or rather, would smile and giggle at your ignorance.
And now you try to weasel your way out of it by saying, in the comment above that I am replying to:
>I never said we don't manufacture.
Those two statements are clearly quite contradictory.
Laughable.
Even your first paragraph above is wrong.
I have had enough of your false arguments. If I feel like it, I may point out what is wrong with that, later, otherwise not.
And about this:
>There are few notable industries that we are decent at and export it as well:
Maybe check out the difference between "few" and "a few", which have opposite meanings (a mistake that Indians often make), and at the same time, improve your English grammar generally.
Can't help but post another link, related to what I said above:
>Many top Indian multi-hundred-crore-or-multi-thousand-crore turnover (in rupees) industrialists or groups like the Tatas, Birlas, Bajajs, Singhanias, Thapars, Godrejs, TVS group, TTK group, Munjals, Ambanis, Premjis, and many more, may like to have a word with you, or rather, would smile and giggle at your ignorance.
Not all of those are about manufacturing, but many are.
Their combined total revenue adds up to hundreds, if not thousands, of billions of US dollars, going by a simple conversion of thousand crore rupees to USD that I just did in Google.
The permanent bureaucracy is a hangman's noose around the country's neck. They have a billion ways of derailing projects with political and public support if they don't like it. So many people have talked about their conversations with these gatekeepers where they openly threaten that the politician will be gone in the next election but they will remain. So you don't have a choice but to deal with them.
The current BJP government in the centre is probably the most powerful one in the history of modern India as far as political power is concerned. But look at the statements the Finance Minister makes: [1]
> "The question should be how much it takes for me to convince the ministry and the boards. It is not so much about the PM. The PM was very clear that he wanted to do something. It was for the ministry to reach a comfort level and then proceed with the proposal,"
They are trying to "convince" the bureaucracy instead of ordering them to get on with the program. No wonder these projects do not succeed.
This scourge of bureaucracy extends to wherever the government has a vice-like grip on a particular sector (like banking). Here is a case of a non-profit that digitizes manuscripts (eGangotri) struggling to access the grant it has received from the government: [2]
> As most patrons know Ministry of Education had most kindly chosen us for a IKS grant but with a very limiting condition and in my opinion over-bureaucracy to only allow ICICI Bank as the Chosen Partner and this has turned a nightmare for us.
India succeeds in services because most of the ten thousand-odd permissions you require to set up a manufacturing unit do not apply. You try to start a physical plant and see how many people you have to pay off before you can succeed.
The legal system is so slow that the government's own projects can be blocked by filing nuisance cases in random courts and tribunals. Private businesses have no hope in hell.
Without police reform, judicial reform and bureaucratic reform, we will keep chugging along. Always underachieving.
Yep. What's interesting is that this bloated bureaucracy is the result of the country being an electoral democracy embedded with every "equity" intervention possible. With the ridiculous levels of population and heterogeneity within it, and with the majority of the population being intellectually poor, it was evident that the dominating part of the administration's energy is spent in appeasing voters' sentiments in place of competently executing good policies. India is the prime example of what happens when a country gets democracy at a stage when it's not prepared for it.
There is a famous quote attributed to some post-Independence India bureaucrat that I forgot the name of, which went something like "if we are to prioritize efficiency against representation, we might as well have just accepted British rule." India had to choose between strong economic development or plebeian representation, and it chose the latter. This is the consequence.
Could you please stop posting unsubstantive comments and flamebait? You've unfortunately been doing it repeatedly. It's not what this site is for, and destroys what it is for.
We've banned this account for continuing to post nationalistic and religious flamewar comments, and otherwise breaking the site guidelines, after we've asked you many times to stop.
> “we export most of our technology talent.” Retaining that talent, he insisted, will require homegrown, ambitious deep-tech projects
India's elites incl. the ones HN folks are likely to run into are products of the old colonial education system - one that ensures that only the micro-minority of English-speakers (~5%) are able to ever get any decent level of higher education. People don't realize that there's very little "pull" for Indians who escape this system and "win" the game they're playing viz. to climb the greasy-poles of the (Pan-)Anglosphere.
It strikes me that quite a bit of the caste-system narrative is basically a coded/symbolic version of what the neo-colonial system currently has in place. Ironically, going by the reports of East-India Company, the hated pre-British "Hindu" India seems to have been a far more equitable place.
India should at least start off by building aesthetically sound products that people require globally - not just functional products. Just like China did.
Vedanta-Foxconn, Adani-Tower, and now Zoho all collapsed because of questions around market viability. Sure, India has a large domestic market, but that is not reason enough for business consumers to buy Indian, nor is it a large enough market on its own. Semiconductor markets require global-scale markets, something the Chinese, Koreans and Japanese were able to break into with years of copying Western aesthetics.
India thinks it can be the market leader for the developing world's semiconductor supply, but when it comes to chips, the whole package counts, not just bare functionality. With all of the world's electronics manufacturing in either China-Japan-Korea, and others in Europe, India has a very limited consumer base for chips to be sold to.
>now Zoho all collapsed because of questions around market viability.
When did Zoho collapse? It is privately held and seems to be worth over $10B [1]
I find Vembu being quite annoying these days with all his statements and comments, but all his companies (Zoho has many, like ManageEngine) are doing well.
Deciding that one new business is not viable is not a collapse.
Consumer electronic product design. India has some native consumer and business electronics manufacturing (with chips designed in China), but for an outsider to the country used to good product design, using them is an alien experience. They could have at least gotten the software part right, but nope, even that's dated.
There are some companies that are working towards that end though, but they still have quite a long way to go. And a lot of native manufacturers in India have faced financial issues, so that's another hurdle.
Practically any Indian electronics company. Many of them with extremely dated designs.
Take IFB for instance - it's a native heavy duty home appliances manufacturer in India. Their product is solid and resilient, and in many cases better than their Western equivalent, like Bosch (which I must add is going downhill). You literally get a Miele quality product at a much lower price (30-50%). Yet they lose out to the more "namebrand" companies because the UX is something that would pass for in the 2000s.
IFB is the best, we rarely look at any other brand for cleaning appliances. Our washing machine has lasted decades. Those who've bought at least one IFB product generally swear by it.
Also, the latest appliances are fine; the UX is good enough. You don't need fancy stuff for the products in such a market; fancier UX might appeal to first-time buyers, but they get tired of all that soon and look forward towards saner options the next time.
I agree, but if IFB wants to be competitive with the likes of foreign brands in international markets, they really need to step up their game. Instead what I'm seeing is a retreat from international markets. IFB wasn't widely available abroad but it was available in the UAE back in the day, but now you can't get them from any major retailer.
Isn't this fairly common for Indian companies? I expect that's because the domestic market is large enough to not want to try expanding internationally?
