Globally semiconductor is expected to become a $1tn industry by 2030 from $600bn billion in 2021. The race to capture the market share both for regions to attract investments and for business houses to expand their existing capacities has seen an increased frenzy.
AMD, Nvidia, Samsung and Intel have continued to strategise on what makes an apt sense considering multiple incentive scheme announced by several countries across the world. While Nvidia has recently touched a Mcap of $1tn on the back of attractiveness of its graphic cards for generative AI. In all of this intel seemed to be left out but not anymore.
The last 4 days of June has seen a series of investment announcements by Intel. Intel has continued to announce its plans to build Semicon fab facilities across three continents with the latest announcement in Germany – announcing a $33bn deal and a $11bn subsidy on offer.
Semiconductor space in India hinges less on the PLI commitment of $10bn and more on structuring a practical playground around Semicon fab facilities in India. Semicon is capital and technology intensive along being a space of global interest right now with sizeable incentive commitments in USA, China, South Korea and UK. Therefore, for India, it will be wise to build competencies gradually.
Considering India’s absence of history in the Semicon space and the complexities (including higher investments) in the smaller chips, it will do right to look at larger sized chips beyond 28 microns. Commercial orientation will be key. It would pay to identify an initial set of applications for which local capability around chips could be built – there is a huge set of product applications where larger sized chips are used (beyond 28 microns), for instance washing machines. Gradually, the list of applications could be enhanced and so would be the boundary of manufacturing capabilities around Semicon chips.
The race in Semicon fab space is competitive and a right commercially structured strategy will help in preventing this from turning overwhelming.