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Time of India
5 days ago
- Business
- Time of India
Semiconductor push: Global chipmakers eye Indian partnerships amid rising pressures, Chinese competition; government incentives, market lure firms
AI image A rising number of overseas firms battling financial strain are seeking alliances with Indian companies to set up semiconductor manufacturing plants in the country, driven by generous state incentives, a vast domestic market and a large talent pool. As per ET, electronics major Sharp and US semiconductor producer Onsemi are among those exploring tie-ups, though both firms have not opened up about their plans yet. Industry observers say many of these companies are under pressure from aggressive Chinese rivals. 'Chinese companies are taking over spaces that Korean and Japanese firms dominated,' a source following the matter was quoted as saying by ET. 'For them, India offers a growing market. The potential of the Indian market that people have been looking at for two-three decades is now increasingly becoming a reality', the source added. The India Semiconductor Mission offers substantial financial aid for ventures in silicon semiconductor fabs, display fabs, compound semiconductors, sensors, packaging and chip design. This framework is creating a favourable environment for manufacturers grappling with high costs and sluggish demand elsewhere. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Dementia Has Been Linked To a Common Habit. Do You Do It? Memory Health Click Here Undo Analysts believe that collaboration with Indian partners, backed by heavy government subsidies, is an appealing lifeline for such companies. Several projects are already in progress, with the government approving joint ventures between established and new players. These initiatives aim to produce chips for consumer electronics as well as specialised automotive and industrial uses. Danish Faruqui, chief executive of Fab Economics, was cited by ET saying that combining foreign technology with Indian financial backing could be 'lucrative for established players' struggling with operational shortcomings and a lack of capital to scale. However, experts caution that India must address gaps in trained manpower and technical skills to sustain this momentum. Faruqui noted that beyond capital and technology licences, 'trained talent and skill sets across a variety of functions' are vital for high-value chip production. He warned that other nations in Southeast Asia and the Middle East are also racing to develop their own semiconductor ecosystems, making it crucial for India to strengthen its foundations quickly. Stay informed with the latest business news, updates on bank holidays , public holidays , current gold rate and silver price .
The Hindu
5 days ago
- Business
- The Hindu
India's smartphone and chip ambitions on track amid tariffs uncertainties
The announcement of a 50% tariff on exports to the U.S. from India has triggered concerns across the tech industry. On paper, it sounds like a direct threat to India's growing role in smartphone assembly and its emerging semiconductor ambitions, but in reality, the near-term impact is much smaller than headlines suggest. The structure of electronics manufacturing, the nature of global supply chains and India's unique position in this sector mean that the country's growth trajectory remains largely intact — at least for now. 'The imposition of 50% tariffs structure on India will have distinct impact across electronics exports from India to US, including smartphones, and other electronics assembled in India. In particular, the net impact will be governed by the proposed Trump's 100% tariff on inbound semiconductors supply chain,' said Dr. Danish Faruqui, the CEO of Fab Economics, a U.S. based boutique semiconductor Fab/OSAT Greenfield projects implementation and investment advisory firm. US President Donald Trump's April 5 executive order excludes smartphones, tablets, laptops, servers and telecom equipment from reciprocal tariffs. Therefore smartphone exports to the U.S. from countries like India, China and Vietnam are insulated from reciprocal tariffs. This includes the current 50% tariff on India. 'The only constant with the U.S. tariffs has been the change of status quo dynamically over the last 4-5 months, therefore such reprieve from US tariffs on smartphone is not a guaranteed insulation,' Dr. Faruqui said. (For top technology news of the day, subscribe to our tech newsletter Today's Cache) 'This [tariff] is more of a negotiation tactic putting pressure to achieve leverage in overall trade negotiations which would be on completely different items,' said Prachir Singh, Senior Research Analyst at Counterpoint. Manufacturing math It is important to note that setting up electronics manufacturing and supply chain ecosystem is a complex and tedious process that involves huge capital investments. It requires multiple layers of suppliers like chip fabrication units, printed circuit board assembly lines, camera modules makers, display panels manufacturers, batteries makers, connectors, packaging firms, testing experts and logistics handlers. And setting this up takes decades to mature. Once they are in place, they cannot be dismantled and rebuilt in another country. 'Electronics supply chain and manufacturing is inherently complex and takes decades to be built. It is nearly impractical to pressure OEMs and supply chain to setup operations in USA,' Prachir added. Moving manufacturing in response to tariffs is unrealistic. For a company like Apple, which relies on precision ecosystem, moving production to a different place would mean years of planning and billions of fresh investment. In the meantime, Apple faces some pressure due to tariff imposition by the U.S. on India. 'Apple could absorb some of the extra cost, at least temporarily. However, a 35 to 40% jump in the retail price of an iPhone in the U.S. is not something either Apple or the U.S. government would want or accept as normal,' said Prachir. iPhones are already premium products and a sudden price spike could hurt sales volumes and consumer sentiment. As per Fab Economics, Global smartphone industry is not reacting well to tariff impositions resulting in demand softening in multiple world regions including US. iPhone shipments to the U.S. declined by 11% year-on-year to 13.3 million units in Q2'2025 wherein Apple reported $800 million in tariffs and forecasted $1 billion in tariff in Q3'2025. Most of the iPhones assembled in India and exported to the U.S. are currently exempted from the 50% tariffs (25% for now). There will be no immediate disruption to India's iPhone production lines or to Apple's export plans from the country. India's position Even with the uncertainty around tariffs, India remains ahead of several competing manufacturing hubs. 'Compared to Vietnam, India has a far larger domestic consumer base, which means production is not entirely dependent on exports. Compared to China, India offers geopolitical diversification for global brands seeking to reduce their reliance on one country,' explained Prachir. Factors like strong export potential with schemes like production linked incentive (PLI) and huge internal demand due to a large young population, make India a rare market. This makes India a strategic choice for electronics manufacturing in the long term. The latest tariffs move looks less like an attempt to dismantle existing manufacturing patterns and more like a negotiation tactic before an upcoming trade deal between India and the U.S. For India, this 50% tariff is more of a background noise than an immediate operational challenge. As long as major export items like iPhones remain exempt, the impact will be muted. 'India's smartphone exports to US to remain tariff free by the virtue of proposed Trump's 100% tariff imposition plan on semiconductors that plan to exempt or provide favourable rates to companies having US manufacturing operations or having committed roadmap for US manufacturing operations: both Apple and Samsung qualify for such preferential treatment which represent over 80% of India's smartphone exports to US,' said Dr. Faruqui. India itself is a huge market. If the tariffs pose a challenge, the local demand can act as buffer. India's smartphone user base continues to expand with nearly 900 million smartphone users. Affordable 5G plans and cheap AI devices areexpected to drive this growth even further. For makers, serving India alongside exports creates a more balanced portfolio. This is something smaller manufacturing hubs like Vietnam lacks. Impact on other players While Apple's position is relatively secure for now, other manufacturers could feel less confident. Samsung recently spoke about making India a key global export hub for its devices. If the tariffs environment remains unpredictable, such expansion plans might be slowed down. 'There is a need to have long term clarity as it could create doubts in the minds of other phone makers like Samsung who recently said they wanted to make a key exports hub,' said Faisal Kawoosa, Chief Analyst, Techarc. Similarly, emerging smartphone brands or component suppliers considering India as a base may hesitate until they see consistent policy signals from both the U.S. and India. In manufacturing, investment timelines often stretch over a decade or more. Companies prefer to commit where they can reasonably forecast market access and costs. Even if the tariffs impact is limited, the uncertainty it creates can shake the supply chain. With trade rules changing without warning, suppliers may face challenges in planning, sourcing raw materials and deciding the pricing for the end buyers. Electronics sector, which is running on wafer-thin margins and demand is highly price-sensitive, such unpredictable move can disrupt the market. 'Such commotion stresses supply chain which makes pricing unpredictable,' added Faisal. Semiconductor India is also taking huge strides in semiconductor manufacturing by building chip fabrication facilities that are more complex than smartphone assembling units. It involves huge capital expenditure, sanitised manufacturing environments and extremely precise logistics for raw materials like silicon wafers, rare gases, and photolithography equipment. India has made investment to attract semiconductor makers, but these projects could take years to become operational. For global players considering where to place their next fabs or advanced packaging units, policy stability is just as important as infrastructure. Frequent shifts in trade dynamics could complicate those decisions, even if they do not stop them outright. 'Due to Trump's administration semiconductor tariffs enactment there will be distinct tailwinds for players in the U.S. allied countries, including beneficiaries of the U.S. Chips Act who are pursuing manufacturing operations on the U.S. soil, while major headwinds for non-allied or adversarial countries,' said Fab Economics. Manufacturers will continue to invest in India as long as they believe that the rules of the game will not shift unpredictably. This stability must come from both domestic policy and international trade relationships. Conclusion Despite the 50% tariffs, India's smartphone and semiconductor ambitions remain largely on track, thanks to exemptions for key electronics export items, a resilient and growing domestic market and a strong competitive position against rivals in Asia. 'India, even with these flip flop on tariffs, is still in the best position against China or Vietnam as a go to destination for manufacturing ecosystem for electronics and eventually semiconductors from both export and huge domestic consumption perspective. It will eventually be a two horse race: India and China,' said Prachir. The risk does not lie on the current tariffs, but the uncertainty it represents. Stable or predictable policies, both domestically and internationally, will be critical to keep investment flowing and supply chains resilient. India has the opportunity to cement its status as one of the world's top electronics manufacturing destinations. The challenge will be to ensure that short-term trade talks do not distract from that long-term goal. 'India currently holds largest share of smartphone supply to the U.S., inching towards half of its smartphone supply, which makes any tariffs imposition on Indian origin smartphone inbound supply chains directly resulting in price expulsion impacting end users in the U.S., an unwanted outcome for Trump administration,' believes Fab Economics.
Economic Times
5 days ago
- Business
- Economic Times
Crisis-hit global chip companies vie for an Indian summer via partnership
Agencies A growing number of international companies facing financial challenges are looking to be strategic partners to Indian firms that are looking to establish semiconductor manufacturing facilities in the robust government incentives, coupled with a vast domestic market and a large talent pool, are making it an attractive destination for these firms, analysts said. ET had earlier reported that Japan's Sharp and American semiconductor giant Onsemi are among the companies that are actively scouting for partners in India. Queries sent to Onsemi and Sharp regarding their plans remained unanswered as of press time Wednesday. These companies, many of which are facing stiff competition from Chinese manufacturers, are looking at the opportunity from multiple angles, a person tracking the development said.'Chinese companies are taking over spaces that Korean and Japanese firms dominated," he said. For them, India offers a growing market. The potential of the Indian market that people have been looking at for two-three decades is now increasingly becoming a reality, he said. "Many of them are interested, many of them feel they can brave this market now and the room in other markets is also not growing as quickly,' he said. 'The Chinese market is difficult to break into because there are already enough suppliers and producers there. Indian corporates and entrepreneurs are also fairly flush with money, so they are also looking for lucrative businesses to invest in. These foreign companies also have fairly decent technology. So, it is a win-win." The India Semiconductor Mission offers significant fiscal support to companies investing in silicon semiconductor fabs, display fabs, compound semiconductors/silicon photonics/sensors (including MEMS) fabs, semiconductor packaging (ATMP/OSAT) and semiconductor design. This policy has created a favourable ecosystem that is proving to be a lifeline for companies struggling with high operational costs and competitive pressures in other parts of the world. Industry analysts suggest that for these financially strained companies, a partnership with an Indian firm, backed by substantial government subsidies, presents a compelling India's semiconductor journey is still in its early stages, several projects are already underway. The government has approved a number of joint ventures, with both established and new players, signalling a clear intent to fast-track domestic chip production capabilities. These ventures are set to produce a wide range of chips, from those used in everyday electronics to more specialised components for the automotive and industrial sectors. "India is a lucrative option for players around the globe," said Danish Faruqui, chief executive of greenfield fab/ATP projects advisory consultancy Fab Economics. "These players have been in the semiconductor industry for a while but, due to not having operational excellence, have suffered,' he said. 'What is now becoming viable for them is to combine their technology with Indian capital support which is lucrative for established players in the semiconductor industry, who could be financially strained because of not having operational excellence and not having capital to scale their operational footprint to bring economies of scale."However, it isn't just India that these companies are looking at. Experts said India still needs to address critical gaps in order to ensure that this opportunity is not are specific success factors that are required other than the capital and the technology licence to reach the stage of high value manufacturing of products, Faruqui said. "Those factors include trained talent, trained skill sets across a variety of functions,' he said. 'India needs to also develop these to enrich its capital so that more and more technology licensing deals happen in favour of India against multiple competing nations as most of the Southeast Asian and Middle Eastern countries too are looking to develop a semiconductor ecosystem." Elevate your knowledge and leadership skills at a cost cheaper than your daily tea. Tariffs, tantrums, and tech: How Trump's trade drama is keeping Indian IT on tenterhooks Good, bad, ugly: How will higher ethanol in petrol play out for you? As big fat Indian wedding slims to budget, Manyavar loses lustre As 50% US tariff looms, 6 key steps that can safeguard Indian economy Stock Radar: JSPL forms Ascending Triangle pattern on weekly charts, could hit fresh 52-week high soon Nifty and business are different species: 5 small-cap stocks from different sectors with upside potential of up to 30% F&O Radar | Deploy Bear Put Spread in Nifty to play index's negative stance amid volatility Wealth creation: Look beyond the obvious in some things; 10 fertilizer sector companies worth watching
Time of India
5 days ago
- Business
- Time of India
Crisis-hit global chip companies vie for an Indian summer via partnership
Academy Empower your mind, elevate your skills ETtech A growing number of international companies facing financial challenges are looking to be strategic partners to Indian firms that are looking to establish semiconductor manufacturing facilities in the robust government incentives, coupled with a vast domestic market and a large talent pool, are making it an attractive destination for these firms, analysts said. ET had earlier reported that Japan's Sharp and American semiconductor giant Onsemi are among the companies that are actively scouting for partners in sent to Onsemi and Sharp regarding their plans remained unanswered as of press time companies, many of which are facing stiff competition from Chinese manufacturers, are looking at the opportunity from multiple angles, a person tracking the development said.'Chinese companies are taking over spaces that Korean and Japanese firms dominated," he said. For them, India offers a growing market. The potential of the Indian market that people have been looking at for two-three decades is now increasingly becoming a reality, he said."Many of them are interested, many of them feel they can brave this market now and the room in other markets is also not growing as quickly,' he said. 'The Chinese market is difficult to break into because there are already enough suppliers and producers there. Indian corporates and entrepreneurs are also fairly flush with money, so they are also looking for lucrative businesses to invest in. These foreign companies also have fairly decent technology. So, it is a win-win."The India Semiconductor Mission offers significant fiscal support to companies investing in silicon semiconductor fabs, display fabs, compound semiconductors/silicon photonics/sensors (including MEMS) fabs, semiconductor packaging (ATMP/OSAT) and semiconductor policy has created a favourable ecosystem that is proving to be a lifeline for companies struggling with high operational costs and competitive pressures in other parts of the world. Industry analysts suggest that for these financially strained companies, a partnership with an Indian firm, backed by substantial government subsidies, presents a compelling India's semiconductor journey is still in its early stages, several projects are already underway. The government has approved a number of joint ventures, with both established and new players, signalling a clear intent to fast-track domestic chip production capabilities. These ventures are set to produce a wide range of chips, from those used in everyday electronics to more specialised components for the automotive and industrial sectors."India is a lucrative option for players around the globe," said Danish Faruqui , chief executive of greenfield fab/ATP projects advisory consultancy Fab Economics. "These players have been in the semiconductor industry for a while but, due to not having operational excellence, have suffered,' he said.'What is now becoming viable for them is to combine their technology with Indian capital support which is lucrative for established players in the semiconductor industry, who could be financially strained because of not having operational excellence and not having capital to scale their operational footprint to bring economies of scale."However, it isn't just India that these companies are looking at. Experts said India still needs to address critical gaps in order to ensure that this opportunity is not are specific success factors that are required other than the capital and the technology licence to reach the stage of high value manufacturing of products, Faruqui said."Those factors include trained talent, trained skill sets across a variety of functions,' he said. 'India needs to also develop these to enrich its capital so that more and more technology licensing deals happen in favour of India against multiple competing nations as most of the Southeast Asian and Middle Eastern countries too are looking to develop a semiconductor ecosystem."
Mint
10-07-2025
- Business
- Mint
Ground Reality: A 26-acre patch emerges as key hurdle to SCL Mohali's facelift
A 26-acre land parcel near the existing chip research and manufacturing facility, the Semi-Conductor Laboratory (SCL) in Mohali, has emerged as a potential hurdle in the Centre's plan to modernise the decades-old plant with advanced chip technology. Owned by the Punjab government, the land was identified by the Centre-run facility over a year ago for its expansion and adding new fabrication lines. However, ongoing disputes over the land and a higher price of about ₹700-800 crore demanded by the Punjab government are causing delays to the government's plans, two officials aware of the matter said on the condition of anonymity. 'The land is seen as key for expansion due to its proximity to the existing research and manufacturing infrastructure. Essential services such as power, water, and connectivity can be expanded with the existing SCL set-up nearby, making it highly practical for expansion," the first official said, adding that the ministry of electronics and IT (MeitY) is currently evaluating the prospects. Queries emailed to MeitY and chief secretary to the Punjab government did not elicit any response till press time. To be sure, SCL Mohali is currently undergoing a ₹4,000-crore revamp process which involves replacement of old machine and equipment along with technology upgrade in the existing legacy semiconductor technology of 180 nanometer (nm). After this revamp, the government will begin with the process to modernise SCL Mohali by moving to lower chip nodes of 65 nm, 40 nm, and 28 nm nanometer, the official said, adding that a new tender will be invited to seek technology partners for SCL's foray into lower nodes. The 180-nanometer process is an old chip-making technology. It is still used to make chips for satellites, space and defense systems, medical devices, micro-controllers, power management, etc. In chip-making, nanometers measure the size of tiny parts like transistors and the spaces between them on a chip. Smaller nanometers mean smaller, faster, and more power-efficient chips. 'While technology transfers are key for SCL to foray into new chip technology, land acquisition is very important for infra expansion. The Punjab government is quoting a three-times higher price for the land. Requests have also been made to them to directly hand over the land to the SCL after it is cleared for the existing disputes," the second official said. 'An Indian pre-play foundry type vision for SCL Mohali should include a diverse fab (fabrication) level node portfolio that offers multiple nodes to meet demand of diverse end-markets and also have both Capex and Opex cost structure synergies across the node mix in the fab," said Danish Faruqui, CEO of Fab Economics, a US-based boutique semiconductor fab/OSAT greenfield projects advisory and implementation consultancy. Fabrication in semiconductors means the process of building tiny electronic components and circuits on a silicon wafer, using advanced machines, chemicals, and cleanroom environments. 'Specific nodes sub-90nm with individual capacities in SCL Mohali will bring multi-faceted synergy to develop and propel the entire nation's ecosystem towards more advanced nodes," Faruqui said, adding that SCL Mohali's expansion and modernization should aim for brownfield-driven synergies. SCL first started manufacturing in 1984. This was three years before Taiwan's Semiconductor Manufacturing Company (TSMC), which eventually became a global chip leader, set up shop. But a mysterious fire 35 years back destroyed its facilities at the 51-acre campus at Mohali and after that slow decision-making had put SCL off-track. The facility has been serving strategic sectors like space and satellites, railways, and telecom, among others by supplying them 180 nm chips. 'The current plan with SCL modernisation is to increase its capacity and to support startups and industry for R&D and prototyping," a third official said, adding that the chip design startups have already started utilising the SCL facility for prototype and limited scale manufacturing of their chips in 180 nm technology. With modernisation, the startups will be able to get their chip prototype in the advanced technology, the official said. Currently, fabless startups that develop chip designs have to tap global entities such as TSMC, and GlobalFoundries to get even limited samples of chips before actual production can start. The same not only incurs huge costs but also limits their ability to do failure analysis, testing, and identify any challenges in manufacturing or assembly first hand. Lately, the SCL facility has also been used by global semiconductor companies, which are setting up shops in India, for training their workforce. Last year, US-based Micron, which is setting up assembly, test, marking, and packaging (ATMP) facility at Sanand, Gujarat, got the first-level training to its engineers from SCL Mohali, according to a post by SCL on X in February 2024. Similarly, Lam Research, which is a manufacturer and supplier of wafer fabrication equipment, also sent a batch of engineers for training at the SCL Mohali recently, the third official said. 'Tata too approached to get the training done but the same did not happen. This was because they had asked SCL to accommodate a batch of 120 people whereas SCL can accommodate only a limited number," the third official added. Queries emailed to Tata Electronics and Lam Research did not elicit any response till the press time. In December 2021, the government announced a ₹76,000-crore India Semiconductor Mission that aims to create a strong semiconductor and display ecosystem in the country. Of the same, the government had earmarked around ₹10,000 crore for modernisation of SCL. According to estimates by industry body India Electronics and Semiconductor Association (IESA), by 2030, India's semiconductor demand is projected to reach $103 billion, and 10-15% of this will stem from technologies built on 180nm nodes such as MEMS (micro-electromechanical systems), CMOS (complementary metal-oxide-semiconductor) image sensors, power semiconductors, analog, and mixed-signal devices.
