Bangalore, India - India's ambitious semiconductor chip manufacturing plan seems doomed
semindia's $3billion OEM project, like another OEM plan of the Indian electronics manufacturing company (IEMC), may be aborted due to premature timing. In addition, South Korean investor junemin's plan to design and build India's first OEM plant in Hyderabad, India, has been abandoned and switched to manufacturing photovoltaic products
India took a major step in the chip manufacturing policy last year. The purpose of this stimulus policy is to help investors establish the most advanced OEM plants in India in the next few years
however, due to the re exposure of financial reality, the high expectations for the Indian chip industry may come to naught. The OEM plant of semindia using AMD technology and IEMC cooperating with Infineon seem to have become a month in the water
in the venture capital investment of semindia, US $30million comes from venture capital firm sandalwoodpartners, Wall Street fund empirecapitalpartners and contract electronics manufacturer FL, whose annual production capacity reaches 4million square meters. They cannot determine the OEM strategy of semindia, according to sources familiar with the project
"there are many uncertainties in the Indian industry," industry sources said, "especially because the semiconductor industry is a very volatile and cyclical industry, with cyclical fluctuations, which is an industry that requires high-intensity investment. Therefore, it is urgent for companies involved in this field to be able to manage their investment, capacity distribution, new plant construction and phase out outdated technologies in a relatively short time."
"this is crucial for the survival and growth of the semiconductor industry. At present, it is not clear whether India has the ability to manage this rapidly changing industry," industry sources added. Despite the uncertainty, semindiasystems is becoming the flagship of the company, and its manufacturing capacity has supported the company's financial performance. Similarly, the IEMC outline revised plan focuses on the photovoltaic market that CEO rajendrasingh is good at
reliance, a $25billion conglomerate, or other big money negotiators are also considering acquiring unattractive chip manufacturers such as AMD, industry observers said<"Taking the Industrial Park as an important carrier for industrial development/p>
the investors of semindia have formulated a simple strategy for it: at the beginning of its establishment, semindiasystems has been built into a profitable enterprise. It is the first Indian manufacturer to ship more than 1million adsl2+ broadband modems in the year when it was put into operation. Its annual sales revenue exceeded 25million US dollars in 2007, and its operating rate in 2008 is estimated to be worth about 80million US dollars.
made in India The company has defeated some vanadium battery projects and will not be able to postpone the implementation of previously established companies, such as D-Link, Huawei, ZTE and other Chinese companies that have long supplied Indian companies
semindiasystems has recorded great growth in less than two years, and investors predict that if the company adheres to back-end manufacturing rather than chip manufacturing, it is expected to grow 50 times in the next year
"this is entirely because semindia is attracting the attention of many fund institutions. American venture capital companies and Wall Street funds may announce substantial additional investments," a source said
the Indian electronics market is expected to reach $3630 in 2015, while its domestic demand for semiconductors alone is expected to reach $36billion, according to the analysis of frost Sullivan, a market research company
"sometimes, when you focus too much on the project, you can't see your direction," an investor said, "semindia's project happens to be like this. At present, we have realized that we are wrong, and in order to correct the mistakes, we are asking the company to change its business model."IEMC executives have also stopped its OEM program. "At present, we have no plan to establish a foundry in India. We have made other plans, "An IEMC executive who asked to remain anonymous said so.
the key reason is that the OEM cost is huge. Semindia envisaged an investment of $3billion in 2005, but now it will be as high as $7billion. Here we need to consider that if we can spend the same money on the research and development of new test machine models in 2018 and purchase existing chip manufacturers, why should we spend $7billion to build a new OEM?
industry analyst ashidar said: "India must move cautiously and move in the right direction. If Indian companies can acquire a OEM, they should examine technology and see if their business plans can integrate a OEM."
Indian analysts also blamed the delay and ambiguity of the Indian government's chip policy as the reason for the difficulties of the OEM plan. The special stimulus package provided by policymakers is to encourage investment in OEM plants, including subsidies equivalent to 20% and 25% of manufacturing capital expenditure in and outside the special economic zone. "However, the form of this subsidy provided by the Indian government is unclear," Deloitte wrote in an internal memo summarizing the investment in the Indian semiconductor industry
industry experts were also surprised to find that Indian chip manufacturers can provide global markets with products that Chinese manufacturers cannot provide. As Intel plans to build a 65nm foundry in China, most observers here agree with what IEMC executives say, "India's dream of a foundry power has been shattered."