1st ever Indian Semiconductor Plant: The Seed Has Been Planted & How Valuable Can This Be?

The past few years have been hard on PC builders and enthusiasts. The lack of semiconductor plants did not go unnoticed. The insufficient workforce and some major natural calamities brought attention to how rare a semiconductor plant is and why there should be more.

The prices of silicon chips hit their peak in the years 2020 and 2021, which made their production even more expensive and the end product just an unachievable dream for most people. With prices skyrocketing, there was nothing one could do to buy a laptop or build a computer. To make matters even worse, there was a major semiconductor shortage because of high demand and low production. This made worldwide prices go as high as 60% of the original price. To give you an idea, high-end products begin at $250,000!

The problems didn’t end here. The crypto market was at its peak, and as luck would have it, the already out-of-stock graphic cards were bought by miners in bulk. The end users, aka gamers and producers, were left with no choice but to use second-hand or out-of-generation parts to earn their livelihood. But a ray of hope shined upon the true users. By the end of 2021, the market saw a significant drop that brought the prices down to normal and prevented the possibility of people getting used to overpriced components.

Despite the semiconductor shortage, the years 2020–21 achieved something great. First of all, there was finally a shift in the monotonous market ruled by Intel as AMD introduced its Ryzen lineup, which turned out to be more advanced and cheaper than the competition. This made Intel get off their tail and finally innovate, something that could’ve been done years ago! Secondly, the shortage brought attention to the lack of semiconductor plants.

There are only a handful of companies that own microchip fabricators, and when you think about it, there are many more devices than there are humans! So why is a semiconductor plant so important? What even is a semiconductor?

To put it simply, a semiconductor is a piece of metal whose resistance and conductivity can be controlled as to requirements. A semiconductor chip is used in every digital device you see around you, including the phone, PC, or laptop you’re reading this on, the smartwatch on your wrist, and the vehicles you see. Semiconductor chips or microprocessors are all over the planet, even outside the planet (in artificial satellites)!

The Indian Semiconductor Plant

Naturally, at some point in time, India had to realise how much money was being wasted on importing these chips from outside. The semiconductor chips need to be packaged heavily so that not even a single particle of dust lands on the chips because that can do damage to crores of money. Presently, all the assembling of components is done by China, but this is about to change as the Vedanta group announced plans to set up India’s very own semiconductor plant, or “fab” in India.

Partnered with Foxconn or Hon Hai Technology Group, Vedanta is set to establish a semiconductor plant to assemble and test chips in the Ahmedabad district of Gujarat after giving strong hints to Maharashtra. The company is said to have a massive investment of about 1.5 lakh crore, or 1,50,000,000,000!!

NOW THAT IS A LOT OF ZEROES!

With all the major countries now pressing to make semiconductor plants, India needs to attract the tech giants like Intel, AMD, Nvidia, etc. with competitors like TSMC and Micron if they want to get returns on this humongous investment. These companies outsource a lot of their chip manufacturing to other semiconductor plants to match the continually growing demand for microchips. As per the Indian Semiconductor Mission, the government provides subsidies worth $10 billion for chips and display fabs.

So, how does the Indian semiconductor plant help the general public?

The setting up of a semiconductor plant in India will generate more technical and advanced jobs in large numbers. Additionally, with all the chips being made in India, the prices of all the laptops, PC components, cars, mobile phones, etc. will drop substantially. Just to give you an idea, the laptop that costs Rs 100,000 now will come down to just Rs 40,000, moreover, the new Iphones would not cost a kidney! Yes, that’s how much money goes into importing the chips!!

Even today, numerous Indian households cannot afford a full-blown modern system, but if this semiconductor plant is a success, then that will surely reinvent the wheel for the common people.

We say “if” the semiconductor plant is established because, as we all know, over the years, the Indian government has a history of investing in ambitious projects and not getting them done most of the time. This results in a waste of capital, land, labor, and time. However, a project of this magnitude cannot fail. We cannot afford to get this project wrong with such a large investment, bonds, land, and time on the line.