Skip to main content

Micron in Gujarat de-risking strategy to shift low end production to India, Malaysia

By Kavita Kabeer* 

When a deal takes place between two parties, it is supposed to be fruitful for both. But the recent deal with Micron, signed on PM Modi’s visit to the US and initially hailed as a major technological breakthrough, seems to be falling flat of its tall promises.
Micron is one of the leading manufacturers of chips. And as per the deal it has offered to set up a plant in Gujarat to “assemble, package and test” chips that it fabricates in other places like the US and China. It is these chips that it would be bringing to India to test and package.
And so this is not going to help India’s semiconductor industry much. In fact, we are getting the lowest end of the chip-making technology, which would certainly employ low-skilled labour but would not be able to fulfil India’s ambitions in the semiconductor industry.
What Micron is doing is employing a de-risking strategy, where it is shifting the low end of the production to other countries like Malaysia and India, while keeping the high-end fabrication in the US. Interestingly, Malaysia is already way ahead of India in this right now, acquiring about 13% of the world’s outsourced semiconductor assembly and test market.
On the cost front, the total cost of the facility is estimated at US$2.75 billion, with a 50% subsidy from the Central Government and a 20% subsidy from the Gujarat state government. That means Micron is going to invest just 30% of the total capital in this project. But still, it will have 100% ownership! In other words, India will pay 70% of the cost, while the ownership and eventual profits will go to the US firm.
So why this extreme subsidy? Is it just a PR exercise to show some results after the PM’s US visit, or would it yield any other benefits?
Semiconductor Complex Ltd started production in 1984 as 100% government enterprise in Mohali. But it burned down mysteriously
The question is what does the semiconductor industry need?
India’s dream of becoming a global semiconductor leader was conceived way back in 1976, when the Indira Gandhi Cabinet, approved the formation of a semiconductor complex. The time was appropriate as China, Israel, Korea etc were nowhere in the scene.
Semiconductor Complex Ltd (SCL) started production in 1984 as a 100% government owned enterprise in Mohali, Punjab. But it burned down mysteriously, when a fire broke out in 1989, causing heavy losses to equipment and facilities.
Instead of re-starting, it was restructured as a research & development centre within the Department of Space in 2006.
In another blow to India’s semiconductor industry, Foxconn has pulled out of the Vedanta chip plan worth $19.5 billion. This pact was signed with Vedanta last year, to set up a semiconductor and display production plant in Gujrat, which now stands cancelled.
From defence to high-tech industries, cutting-edge chips are essential. And India needs a strategy to access technology transfer, and not rely on its cheap labour and subsidies at the cost of taxpayer’s money.

Source: Centre for Financial Accountability

Comments

TRENDING

'Flawed' argument: Gandhi had minimal role, naval mutinies alone led to Independence

Counterview Desk Reacting to a Counterview  story , "Rewiring history? Bose, not Gandhi, was real Father of Nation: British PM Attlee 'cited'" (January 26, 2016), an avid reader has forwarded  reaction  in the form of a  link , which carries the article "Did Atlee say Gandhi had minimal role in Independence? #FactCheck", published in the site satyagrahis.in. The satyagraha.in article seeks to debunk the view, reported in the Counterview story, taken by retired army officer GD Bakshi in his book, “Bose: An Indian Samurai”, which claims that Gandhiji had a minimal role to play in India's freedom struggle, and that it was Netaji who played the crucial role. We reproduce the satyagraha.in article here. Text: Nowadays it is said by many MK Gandhi critics that Clement Atlee made a statement in which he said Gandhi has ‘minimal’ role in India's independence and gave credit to naval mutinies and with this statement, they concluded the whole freedom struggle.

A Hindu alternative to Valentine's Day? 'Shiv-Parvati was first love marriage in Universe'

By Rajiv Shah*   The other day, I was searching on Google a quote on Maha Shivratri which I wanted to send to someone, a confirmed Shiv Bhakt, quite close to me -- with an underlying message to act positively instead of being negative. On top of the search, I chanced upon an article in, imagine!, a Nashik Corporation site which offered me something very unusual. 

Maize, bajra, jute, banana cultivation banned off West Bengal border: Plea to NHRC

Counterview Desk  West Bengal-based human rights defender Kirity Roy, who is secretary, Banglar Manabadhikar Suraksha Manch, and is national convenor of the Programme Against Custodial Torture & Impunity, in a representation to the chairman, National Human Rights Commission, second within few days, has bought to light one more case of trespassing and destruction of a fertile banana plantation by BSF personnel along the Indo-Bangladesh border, stating, despite a written complaint to the police has taken "no initiative".

India second best place to invest, next to UAE, yet there is 'lacks support' for IT services

By Sreevas Sahasranamam, Aileen Ionescu-Somers*  The United Arab Emirates (UAE) is the best place in the world to start a new business, according to the latest annual Global Entrepreneurship Monitor (GEM) survey. The Arab nation is number one for the third year in a row thanks to a big push by the government into cutting-edge technology in its efforts to diversify away from oil.

Mahanadi delta: Aggressive construction in flood plains, reduced fish stock, pollution

By Sudhansu R Das  Frequent natural calamities, unemployment, low farmers’ income, increase in crime rate and lack of quality human resources to strike a balance between growth and environment etc. continue to haunt the state. The state should delve into the root causes of poverty, unemployment and natural calamities.

Buddhist shrines were 'massively destroyed' by Brahmanical rulers: Historian DN Jha

Nalanda mahavihara By Our Representative Prominent historian DN Jha, an expert in India's ancient and medieval past, in his new book , "Against the Grain: Notes on Identity, Intolerance and History", in a sharp critique of "Hindutva ideologues", who look at the ancient period of Indian history as "a golden age marked by social harmony, devoid of any religious violence", has said, "Demolition and desecration of rival religious establishments, and the appropriation of their idols, was not uncommon in India before the advent of Islam".

Living standards in 'model' Gujarat worse than major states: Govt of India document

By Rajiv Shah  Amidst raging controversy over whether the latest Government of India’s “Household Consumption Expenditure Survey 2022-23 Fact Sheet: August 2022-July 2023” suggests that India’s poverty levels are actually down to 4.5 to 5%  during the decade-long Narendra Modi rule, a state-wise breakup in the 27-page document shows that “model” Gujarat’s average consumption expenditure is far below most of the so-called developed states.

Narmada Valley's fossil evidence: Ground for 'nationalists' to argue primates' India roots?

By Saurav Sarkar*  In December 1982, a geologist digging in India’s Central Narmada Valley found something he did not expect. Arun Sonakia, who at the time worked for the Geological Survey of India, unearthed a hominid fossil skullcap from the Pleistocene era. The discovery sent shockwaves through the field of paleoanthropology and put South Asia on the map of human prehistory. Some experts concluded that the skull likely belonged to a member of a predecessor species of ours, Homo heidelbergensis , or perhaps was a hybrid of homo species, while Sonakia himself suggested “ an affinity… to Homo erectus .”

Not livable in summer, Chitrakut PM-Awas houses 'push' tribals in moneylender trap

By Bharat Dogra*  Those who are in-charge of implementing the PM-Awas scheme of rural housing can rightly take pride in what has been achieved in Dafai hamlet (Karvi block, Chitrakut district, Uttar Pradesh). All the Kol tribal families here are extremely poor and vulnerable. In a rare achievement, almost all of them have received housing assistance under PM Awas. 

Sharp 61-85% fall in Tech startup funding in India's top 'business-friendly' States

By Rajiv Shah Funding in Tech startups in top business-friendly Indian states has witnessed a major fall, a data intelligence platform for private market research has said in a series of reports it has released this month. Analysing Tech startup data of Telangana, Maharashtra, Delhi NCR, Gujarat, Tamil Nadu, Karnataka and Kerala, Tracxn Technologies Ltd , the Bengaluru-based research firm, finds that except for Kerala, funding witnessed a fall of anywhere between 61% and 85%.