A war of words erupted between the Congress and the BJP after a Taiwanese chip-making giant, Foxconn announced that it has withdrawn from a joint venture to manufacture chips with India-based industrial giant Vedanta, with the latter hitting out at the grand old party saying that this split will not affect India’s semiconductor programme.
The BJP also said that setting up an ATMP facility by Micron is a big milestone and will mark India’s global presence in the semiconductor industry.
In a tweet, hitting out at the Congress, Malviya said, “Foxconn-Vedanta, two private companies, had formed a JV and applied under India’s semiconductor program… As both parties worked along, they encountered certain internal issues, and split. This split will not affect India’s semiconductor program but the Congress is celebrating, as if they were waiting for a moment, which would delay India’s ambitious foray into semiconductor manufacturing…”
The BJP IT department incharge said, “This development also does not mean Vedanta and Foxconn are moving away from their commitment to participate in India’s semiconductor mission. In fact, both Foxconn and Vedanta have independently declared their commitment to India’s semiconductor program. Foxconn has announced that they are preparing to apply for Silicon Fab and Display Fab. Similarly, Vedanta has also committed to reapply with new partners.
“Besides, other major semiconductor companies are seriously evaluating India as a semiconductor design and manufacturing hub. This is bad news for the Congress, which actively attempts to scuttle, any new initiative India takes. It is now worried that India’s rise as a semiconductor manufacturing hub will further consolidate its position in the world as a credible player in the technology domain. The Congress loathes a confident and self reliant India,” Malviya said.
Congress leader Jairam Ramesh had took a swipe at the BJP government at the Centre after Foxconn announced that it has withdrawn from a joint venture to manufacture chips with India-based industrial giant Vedanta.
In a series of tweets, Ramesh had said, “So Foxconn-Vedanta is off. But Micron still seems to be on for semiconductor chip assembly, packaging and testing. Micron though is putting up just 30 per cent of the $2.75 billion with 50 per cent coming from the Centre and 20 per cent from the Gujarat government. By any standards this appears to be a hugely hefty subsidy to an American company.”
“Remember the publicity at the time of announcing the project? Gujarat CM even claimed 1 lakh jobs will be created. This has been the fate of many MOUs signed in Vibrant Gujarat summits year after year, and will be the fate in other such copycat summits like Global Investor Summits in UP. Whether Gujarat Model or ‘New India’ never trust the manufactured headlines,” the Congress Rajya Sabha MP said on Monday night.
Commenting on Ramesh’s jibe at the Micron deal, Malviya said, “I know it is tough but try and understand, Jairam. Semiconductors manufacturing is a very complex and technology-intensive sector with huge capital investments, high risk, long gestation and payback periods, and rapid changes in technology, which require significant and sustained investments.”
The BJP leader said that India’s past efforts did not succeed. “Earlier attempts were made to directly set up Fabs in absence of a comprehensive programme. Under the leadership of Prime Minister Modi, a comprehensive semiconductor program formulated to provide uniform incentive of 50 per cent to support design, manufacturing and packaging. Program also supports R&D, talent and capacity building,” he said.
He also said that outsourced semiconductor assembly and test (OSAT), which is also referred to as assembly, testing, marking, and packaging (ATMP) units, is the next step in the semiconductor value chain after semiconductor fabrication.
“Investing in advanced ATMP capabilities after having a reasonable scale of $101 billion Electronics System Design and Manufacturing (ESDM) is a natural progression towards accelerating the government’s efforts to set up Semiconductor Fabs in India. China also started its semiconductor journey with developing ESDM and ATMP or OSAT and today commands 38 per cent world’s market share in ATMP or OSAT business. The market share of China in Semiconductor Fab is much less than packaging,” Malviya pointed out.
He also said that success in Semiconductor Products requires — design competency, access to technology, low cost of manufacturing and assured off-take and financial muscle to sustain down cycle.
“Setting up an ATMP facility by Micron is a big milestone and will mark India’s global presence in semiconductor industry. It will Integrate India with the global supply chains, and also help in vertically integrating back into Fabs. Micron will bring their existing mature stable supply chains to India or they may be substituted with some domestic equivalent when it reaches required threshold quality and the standard levels that are necessary,” Malviya said.
He further stated that Micron is an ‘Integrated Device Manufacturer (IDM)’ which reduces risk associated with the project significantly. Success of first few facilities will go a long way in catalysing India’s semiconductor ecosystem.
He also said that the government approved Micron’s proposal to invest Rs 22,516 crore with fiscal support of 50 per cent of the actual Capital Expenditure subject to a ceiling of Rs 11,258 crore.
“Micron will use their latest technologies, such as Wire Bonding, ‘Post-Fab Wafer Finish’ – ‘Direct Chip Attach’ for manufacturing DDR4 or 5 or 6, SDRAM packages and memory modules, NAND Flash and SSDs. For semiconductor facilities like Fab or Packaging, technology changes every year and requires new investments, which Micron will bring at their own to remain relevant in the sector. In absence of the required ecosystem of speciality chemicals or gases or materials, equipment support etc… the first set of companies will face disadvantages, therefore; need more support to offset cost of bringing up the required ecosystem including supply chain partners,” he said.
“The investment will create 20,000 direct and indirect job opportunities in 5 years, besides creating a massive ecosystem, which will help in generating several lakh jobs and making India a hub for sourcing of skilled manpower. Currently India imports memory products worth $11 billion annually. Therefore, it is important to become Atmanirbhar in this critical strategic sector. The “Project Pioneer” will reduce dependence on imports and also lead to exports. Micron’s products are used in mobiles, laptops, tablets, servers, automobiles, communications, consumer electronics etc.
“Presence of a global semiconductor company like Micron will also give confidence to other global semiconductor companies about India’s readiness. Despite having established semiconductor ecosystems, countries like the US, EU, Japan, Korea and China are providing significant incentives to attract investments. Thus, higher incentive is required to attract investment. Understood? If not, read again,” he added.
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