# Not Today, Tomorrow Or Day After; Why India Cannot Enter Semiconductor Gold Rush | Geeta's World, Ep 52

An episode of [Geeta's World](https://invisiblenetwork.ai/podcast/1635741757), 11 Jul 2023, 40 min.

Audio: https://dts.podtrac.com/redirect.mp3/api.spreaker.com/download/episode/56063257/11_jul_23_geetas_world_11_july_ep_52_128.mp3

So what seems like a never-ending tech war has now escalated, with some really pertinent developments recorded recently/ This is about the ongoing chip war between China and the US, and it wouldn't be wrong to say that it's indeed becoming the next oil war, or maybe even more important than it, owing to the fact that now China spends more money each year importing chips than it spends on oil. And well, the ego battle between these two countries is not latent. So what really happened: Earlier this week, on July 3, China put curbs on the exports of germanium and gallium, two niche metals used in the manufacturing of semiconductors and electronics. And this was in response to the Netherlands having imposed, in consultation with the United States, new restrictions on the export of the Dutch manufacturer ASML’s advanced chips machinery to Beijing. After which, even Japan announced that it would impose export restrictions on 23 types of chipmaking technology, including advanced semiconductor manufacturing equipment. These semiconductors, which are also known as microchips or integrated circuits, are practically inside every essential product of the modern world — from household appliances to defence systems, mobile phones to cars. So this explains its importance and the bid for its control by these biggest economies, and why it's important for a common individual to know, to understand this war. So, in this episode, our host Anna Priyadarshini and foreign affairs editor at India Today, TV Today Network Geeta Mohan look at what this war seems to be, who is winning and what will it its repercussions be, where India is in the picture, and what the future of semiconductors looks like. 

## Transcript

[0:00] This is India Today podcasts. China and the US are locked in a fierce
[0:08] chip battle, and now China has put curbs on the exports of germanium and
[0:13] gallium. These are two niche metals used in the manufacturing of semiconductors and electronics,
[0:20] but experts fear that export restrictions on these metals may not have a significant
[0:25] impact as substitutes are available. So while the consequences of China's export restrictions may
[0:32] not be severe, does it really serve as a warning to the US and
[0:36] its allies. Yes, alternatives can be found, but we are sitting today
[0:41] in a place where gallium and germanium are important elements, and should the restrictions
[0:47] continue, it is going to have an impact globally. And with fox Cone
[0:52] withdrawing from its planned joint venture with India's Vedanta to set up semiconductor and display
[0:58] production plans in Gujarat, do we really see India bucking this trend and being
[1:03] an alternative to China? Are we going to be the alternative tomorrow? Not
[1:07] really with fox con pulling out, certainly not tomorrow, not even day after,
[1:12] But somewhere down the line, India is going to be a player in
[1:15] this industry. Hello, I'm Anna PREDESSIONI with India To Day TV's Foreign Affairs
[1:22] editor, Geta Mohun. Where, with Githa's astute and incisive crasp of world
[1:27] affairs, we delve into all that is urgent and pressing in world politics and
[1:33] comprehend how these developments in other countries could shape India's global ambitions of being a
[1:38] Wishwa Guru. Let's unravel Geta's world. Hi, Geta. Well, First
[1:47] of all, I think let me begin by congratulating you and all our listeners
[1:51] because we are fifty two episodes old since win a year that we're doing this
[1:56] spart celebrations which we shall when we meet. Yes, yes, Saturday is
[2:04] not that day. Again, thanking our view our listeners for having a very
[2:12] very in a very dedicated manner stuck to the podcast, returning to the podcast
[2:19] and listening to all our various you know episodes. Certainly certainly has been quite
[2:25] quite a warm reception. We've done well. So yes, kudos to YouTube
[2:29] Anna for conducting a brilliant podcast. Thank you so much, and big credit
[2:38] to you your insights, you know, and it's been a years. I'm
[2:42] just waiting for your treat it's it's more like from your side. So yeah,
[2:50] so for that we have to meet. So this I think this episode,
[2:53] you know, Guitar, although we had planned for something like really special,
[2:57] but that couldn't translate in to anything substantial. But yes, I mean
[3:01] the topic that we are dealing dealing with today. That may sound a bit
[3:07] technical, because you know, while reading up on it, I felt like
[3:09] there was a few things that I could understand, like I got the overall
[3:14] picture, but it might get a bit technical. But you know, like
[3:17] stay with us, those of our lesseners who are well worsed than Yes,
[3:21] of course you can you know text us saying that powers are discussion, but
[3:24] those who are you who are not for them, will make it a bit
[3:29] simpler, and you know, tone it down and just understand, try to
[3:32] understand in the lay person's term, what this topic is about. So I'm
[3:37] talking about this never ending you know, tech war that has now escalated with
[3:42] some really pertinent developments. This is the ongoing chip war between China and the
[3:47] US, and I think, Guitar, you know, it wouldn't be wrong
[3:51] for me to say that it's indeed becoming the next oil war or maybe even
[3:54] more important than that, going to the fact that now China's it's more money
[4:00] each year importing chips than it spends on oil. So this ego battle,
[4:06] you know, between these two countries, it's not latent. We have discussed
[4:11] in our earlier episodes as well, So I'll just give a brief as to
[4:14] what really happened. And this was earlier this week on thought of July,
[4:17] when news came in that China has put curves on the exports of two niche
[4:24] metals, which are germanium and gallium, and these metals are used in the
[4:29] manufacturing of semiconductors and electronics. But this was not in isolation. This was
[4:34] in response to another event that had unfolded when the Netherlands they it had imposed,
[4:42] in consultation with the US, new restrictions on the export of the Dutch
[4:46] manufacturer ASMLS advanced chips machinery to Beijing, after which even Japan announced that it
[4:55] would impose export restrictions on twenty three types of chip making technology, including advanced
[5:01] semiconductor manufacturing equipment. But why are we talking about this geita and what you
[5:06] know, utility does it hold? Is that the fact that how it can
[5:11] affect you and me, and I'll explain that. You know, because these
[5:15] semiconductors, which are also known as microchips or integrated circuits, they are practically
[5:20] inside every essential product of the modern world, you know, from household appliances
[5:26] to sophisticated defense systems, mobile phones, to cars, toys, they're everywhere.
[5:31] So this explains its importance and the bid for its control by these two
[5:36] big giants, and why you know, it's important for a common individual to
[5:42] know and to understand this war. So having said that, in this episode,
[5:45] Gueta and I will will try to look at what this war seems to
[5:48] be, who is winning, if any one is, and what will its
[5:54] repercussions be, and yes where India's and the picture that is also very important
[5:59] for us to look at. To begin with, GETA in like simpler terms,
[6:02] how if you could explain, like how China and the US became engaged
[6:08] in a competitive struggle over these computer chips and why the urgency and control over
[6:15] chip production has become very prominent and very palpable now because you know, it
[6:20] seems that until recently the significance of semiconductors was not widely recognized or understood beyond
[6:28] this tech ecosystem. Do you think that the outbreak of the coronavirus pandemic in
[6:34] the earlier early twenty twenty could be a contributing factor? Then, because there
[6:40] were global lockdowns which brought the microchip industry to a halt, disrupting both the
[6:45] supply and the demand for these chips. As you know, factories closed down,
[6:48] the demand for laptops and computers they searched because of the work from home,
[6:54] the shift that happened. If we can begin with by addressing this,
[6:58] well, to begin with Anna, you said that this is the next war
[7:03] after oil and gas that we've seen. We remember when we were doing an
[7:08] entire episode on Taiwan. I mean, we've done a theories, but at
[7:13] the beginning of some of the episodes we did talk about how and why Taiwan
[7:16] is important to China. It is not just because it claims the Taiwanese land.
[7:23] It is because it should China ever take control of Taiwan, China will
[7:29] then be the sole proprietor so to say, because you know, the government
[7:34] owns everything of the semiconducting chip industry across the world. The fact that the
[7:44] strategic acid that Taiwan owns is the one that is futuristic, forward looking,
[7:50] and what will hold the world together or holds the world together even today is
[7:55] the reason why China eyes Taiwan. And so it's not just about the land,
[8:00] but it's also about the infrastructure. And therefore, yes, the next
[8:05] war that you were witnessing already witnessing after oil and gas is that of the
[8:11] microchip industry. And the chip war will continue because again we have two superpowers
[8:20] trying to why first space, trying to get as much as they can and
[8:26] ensure the other other country or the other side is curtailed and contained, in
[8:31] this case Beijing. So yes, China, And what was the thinking behind
[8:39] China's decision to go all out, you know, against America and take on
[8:45] America? And the chip war is the fear, the existential threat, the
[8:50] fear that should there be a break in supply chain, that China does not
[8:56] have the warwithal or the capacity or the know how do continue manufacturing without have
[9:07] without importing these microchips. The microchips that are used right now in China are
[9:16] primarily important and primarily important from various parts, but Taiwan and including the United
[9:24] States of America. That's why you see a real war between Micron and and
[9:31] China. Um and there is a specific case as a backgrounder, because I
[9:35] don't know how many people have read or seen the background of what really happened
[9:41] and why, uh, why this battle began. It's because Micron accused Chinese
[9:48] major fu Jia Chinhua with conspiracy to steal trade secrets, and that's where it
[9:56] all began. We you know that, you know there is more history to
[10:01] it, but that is one of the instances where then the American government had
[10:05] to take a call on this. Importing and stealing trade secrets are two very
[10:13] different things. Importing from Mikron for your use to further your interests and then
[10:20] stealing trade secrets. Apparently they even got some of the employees hired into and
[10:28] absorbed into Fuchian Chinhua. Was certainly one of the reasons why there was a
[10:35] scare. And then we had the decision by the Biden administration, which was
[10:39] a clear cut decision to curtail paging. And that decision, like you said,
[10:46] was for export controls, banning Chinese companies from buying advanced chips and chip
[10:54] making equipment without a license. Now, what we're seeing right now is a
[10:58] retaliation to the decision made by Biden administration. Now, chips are vital everywhere,
[11:03] and yes, you're right, the world is not completely dependent on China,
[11:11] but it certainly is dependent on China or the raw material Now. According
[11:18] to US Geological Survey, China is the world's leading producer of both gallium and
[11:24] germanium. The country accounts for ninety eight percent of the global production of gallium
[11:30] and sixty eight percent of the refinery production of germanium. So while there are
[11:35] other countries, while there are alternatives, One the alternatives might not be enough.
[11:39] And secondly, that most of it is concentrated in China is the reason
[11:45] why this could really hit the chip industry if China stops sending or allowing the
[11:54] sale of germanium and gallium, which is what now China has done as a
[12:00] retaliatory move. They have imposed export controls on these two strategic raw materials.
[12:05] So while on the one hand, America Washington, DC was trying to contain
[12:11] the growth of Beijing's chip industry, also the accusations of course of stealing trade
[12:18] secrets, but on the other hand, Beijing is trying to nip. The
[12:22] entire as has hit at the core of what you call manufacturing of those chips
[12:28] itself. So if this raw material is not provided to America, they will
[12:35] not be able to produce the chips, including Taiwan. So this is a
[12:39] very very disturbing situation for all those dealing in chips, for all those manufacturers
[12:48] who require these materials to manufacture to produce microchips. And it could in the
[12:56] long run, and if this battle continues, the weight is it could impact
[13:01] supply chains and if that gets impacted, then we will see increase in prices
[13:07] all the products that really do microchips are are a part of and in fact,
[13:13] if you look at our world today, anything you pick up from your
[13:18] phone, to your laptop, to your car, to everything, every electrical
[13:22] equipment, it has microchips. So yeah, life as we know it will
[13:28] be a lot more expensive if not coming to a standstill. Yeah. Actually,
[13:35] and you know the point that you mentioned that there are substitutes available.
[13:39] I was about to ask you that they have exposus stated that you know,
[13:43] the China, how it has retaliated by you know, the limiting the export
[13:48] to restrictions on these metals. They may not have a significant impact because there
[13:52] are substitutes available. But while the consequences of China's export restrictions may not be
[13:58] severe, then I want to understand that doesn't really serve as a warning to
[14:03] the US and its allies that they could it really imply that China possesses,
[14:09] you know, enough fatalitary options to deter further limitations on Chinese access to semiconductors
[14:16] and chip building technology. What do you think, Uh, see, you're
[14:20] right, because the experts who are saying that this would have not a very
[14:28] long lasting impact is because these are these materials, the raw materials gallium,
[14:33] germanium apparently are artificial materials, and so I'm sure there would be anything that
[14:41] is not rare earth. Now, if it's a rare earth material that you
[14:46] get from the earth, those are almost irreplaceable. But when it is artificial
[14:52] and made, then there certainly would be alternatives and options. But finding those
[15:00] those options, creating industries for those options. And now while they say yes,
[15:05] you know in the short term, in the long term it will not
[15:07] be a problem. Is going to be time taking, money consuming, resource
[15:15] consuming, and if you're consuming so much of resource, then it is going
[15:20] to take a hit on the global economy, given that the economy itself is
[15:24] in a shambles. So you know, we have South Korean industry leaders,
[15:31] Taiwanese industry leaders who have said that the curves would have little short term impact,
[15:39] but and also saying a possible expansion of curves could include other materials,
[15:45] which cannot be ruled out. Now. If other materials are included, if
[15:48] this war is prolonged and China starts including other materials, should us not back
[15:56] off, then it will certainly have an impact, whether if it's long term
[16:00] or short term. At the end of the day, we will see a
[16:03] surge in prices. Now, if you look at the market itself, there
[16:10] there has been a spike when it comes to when it comes to Chinese Germanium.
[16:17] You know, shares of those Chinese germanium producers sword that was an anticipation
[16:22] of rising prices for the raw materials which now face at least at least at
[16:29] least a short term supply disruption. So we're looking at a point where this
[16:36] trade war could cost not just America and China, but could cost all the
[16:41] countries very very dearly. And it has to do with like I said the
[16:47] beginning of it, with trade secrets being leaked, espionage, stealing, thievory.
[16:56] These are part of this entire industry, whether fatis technology, trying to
[17:02] figure out what the technology is or reverse engineering. But if cot, then
[17:07] yes, especially in sectors that have to do with strategic military. All these
[17:12] microchips are used in all your military equipments. That's where it becomes a problem.
[17:18] Now we're looking at fifth generation systems, weapons systems, strategic systems,
[17:23] you know, all of that. In that the US also realizes that China
[17:27] is moving ahead. There are many areas where China will take a very long
[17:33] time. They'll take three generations more, according to some experts to even beat
[17:38] and I'm talking about America over here, also to beat where Taiwan stands today,
[17:45] but design in a lot many other aspects, China has not just inched
[17:51] closer to Taiwan, but in some areas is trying to move ahead of Taiwan.
[17:56] So where is the threat America feels not just the pressure but also the
[18:00] threat Europe which is now also standing with America in fighting this war against China,
[18:08] and you're seeing a lot of aggressive posturing against China on that front.
[18:12] Also feels the pressure and the need to restrict China and Chinese access to high
[18:18] end chips and tools. So and the beginning of it, we've seen Netherlands
[18:26] go ahead the America way and after much lobbying from the US, after much
[18:33] much lobbying from the US, because they're actually very careful. Why because they
[18:37] have only a few options to import and they do not want to be stuck
[18:41] with one country or the other. They do want they have always wanted to
[18:45] keep their options open, and which is why Europe has never gotten into direct
[18:49] confrontation the way UK and Europe have gotten into direct confrontation now with China post
[18:56] the pandemic, and the pandemic, like you said, also showed how these
[19:03] the microchip industry was booming. It did very well because a lot of the
[19:07] equipments, a lot of the things that you use gadgets were on demand,
[19:14] and so yes, the global while you know again experts have been saying that
[19:19] yes, it may be short term, but these export controls have drawn comparisons
[19:26] with China's you know, attempts in twenty twenty one to even they had tried
[19:30] to restrict exports of rare earths, which is a group of seventeen elements and
[19:38] for which China controls more than half of the global supply. And while you
[19:45] know, these two gallium and germanium do not fall in those rare earths category,
[19:52] they are expensive and they are very very important. So yes, alternative
[20:00] tips can be found, but we are sitting today in a place where gallium
[20:03] and germanium are important elements and should there, should the restrictions continue, it
[20:11] is going to have an impact globally. Yeah, and Githa, when you
[20:15] say that, you know, of course, like Taiwan, it's it's sort
[20:18] of indispensable in this picture. But we'll come to that a bit more on
[20:23] Taiwan. But before that, you know, I was watching this Walk's documentary
[20:27] and there were a lot of writings which we're saying, which we're indicating that
[20:32] China is losing this war. So I want to understand that this documentary also
[20:37] highlighted the evolving dynamics of the global chip manufacturing industry, and you know,
[20:42] it emphasized the historical dominance of the United States and its current position as a
[20:49] leader in producing these advanced chips, and it explained that, you know,
[20:55] how the US initially managed the entire supply change from the end to end supply
[21:00] chain, primarily serving the US government as its sole customer in the nineteen fifties,
[21:06] if I'm not wrong. But then later in the nineteen sixties, these
[21:10] American companies they realized that the potential for greater profits by designing these civilian products
[21:17] and began relocating their manufacturing operations to countries like Japan, Taiwan, South Korea,
[21:23] Hong Kong where labor costs were you know, lower cheaper. Now these
[21:29] countries they were also US allies, so they which deepened their ties with the
[21:34] US and supported their economies. And then the US restricted the sharing of these
[21:41] intelligence with rivals like the USSR and China now following the end of the Cold
[21:47] War. This is how China entered the free because it attracted numerous chip companies
[21:53] to move their assembly operations to which shows gradually gaining a dominant so for this
[22:00] aspect of the supply chain by the two thousands. Now, while China has
[22:04] made significant progress in chip development, it still lacks behind the US in manufacturing
[22:11] the most advanced versions of chips. Like you mentioned earlier. Um, now
[22:17] I want to understand and there's a d w had also spoken to an expert
[22:22] on semiconductor and he also said something like this that the development of China's semiconductor
[22:27] industry will likely be limited to the fourteen nanometers process and it will be more
[22:33] difficult for China to move beyond this standard in the future as they won't be
[22:38] able to get advanced equipment from Japan, the US, or Netherlands. So
[22:42] I want to understand that this whole picture of you know, China losing,
[22:48] uh, you know, given given that you know, China's perception as an
[22:51] economy and the CCP's aims to you know, make the parea a world class
[22:56] military by twenty forty nine, you using artificial intelligence for applications that include electronic
[23:03] warfare, which are highly heavily dependent on microchips. Can China really not strategically
[23:11] invest and you know, catch up in this race, if that's what it's
[23:15] being said, If if it's you know, widely believed that China is losing,
[23:19] then you really think that has a truly lost its ability to advance in
[23:26] chip manufacturing. If that's the case, well, to begin with, there
[23:29] are no winners in zero sum battles with China and being Beijing in Washington.
[23:37] It is turning into a zero sum war on Chinese chip makers to a certain
[23:41] extent. But can President Biden ensure absolute curtailment of China. Will China lose
[23:49] this chip war again? We will have to see how they sustain this entire
[23:57] war itself, this battle self. The fact that President Biden has been trying
[24:03] to ensure that, you know, and has been looking at China as a
[24:07] real threat and has been trying to ensure certainment of China. Will China allow
[24:14] it? We are looking at countries subsidizing the chip industry. Each and every
[24:19] country is now looking at subsidizing the U plans almost and now these are according
[24:26] to reports that the European Union is planning to match the US promise of fifty
[24:33] two billion in chip subsidies. India is spending about thirty billion dollars on its
[24:38] semiconductor mission. So we're looking at all these alternatives, like the West is
[24:45] looking at all these alternatives. Why so, there's a term called French shoring.
[24:48] Earlier, we used to offshore, you know, our businesses. Now
[24:56] we have French shoring our businesses, which means that move our industries from adversarial
[25:03] countries to allies. Oh, and this is a more it's a resurgent industrial
[25:12] policy to avoid collateral damage in the battle between China and the US for tech
[25:21] supremacy. But will it happen anytime soon? I don't think so. It
[25:26] is going to take a long time for these bases in itself to be created
[25:32] whilst the world is indulging in this strendsuring. So to say you think China
[25:38] is going to just sit quiet, these retaliatory measures are to ensure that somewhere
[25:45] they will have to go back and look at or look to China. Also,
[25:48] don't forget, like I said, China has the advantage of having these
[25:52] rare earth materials and being a hub of the of these earth materials. We
[25:59] are now not talking about the rare earth, but they do, and they
[26:03] did try to ensure that they block all movement or export or rare earth into
[26:10] the West. That does take a toll because all your aircraft, all your
[26:17] ships, submarine, all of them require these you know, parts of these
[26:22] you know rare earth materials to be manufactured. So it is it is going
[26:30] to be a difficult one. And we're looking at a lot of countries coming
[26:33] together to counter China and to contain China. But China would also not go
[26:40] down line, go down without a fight. Try the Chinese are going to
[26:45] fight back, whether it is through the kind of export controls that we've seen,
[26:52] whether it is through the problems in Taiwan Straits. If there are strategic
[26:57] problems in Taiwan's and instability in Taiwan, that also will take a toll and
[27:03] look at the look at the future. At the end of the day,
[27:07] she Chinping now is in control of China, and she Chinping has very clearly
[27:12] told that somewhere down the line Taiwan is going to be is a part of
[27:18] China and will become an integral part of China. So you one has to
[27:23] factor all that in the further United States of America. Why is Taiwan important?
[27:29] Because one, the Taiwan streets and that region is very very important strategically,
[27:36] and Taiwan gives America and the West of Foothold into that region. But
[27:41] also like for China, tai for the US and for the West also Taiwan
[27:48] is important for its microchip industry. TSMC is the leading manufacturer of semiconduct chips,
[27:56] advanced semiconductor chips, and any kind of move into a takeover would mean
[28:03] and that's why TSMC has diversified to a certain extent. They are going to
[28:07] go and build base in Houston as well in the US. But any kind
[28:12] of a move towards Taiwan would be unacceptable and could lead to a situation that
[28:18] would be rather destabilizing for China, for the West, and certainly for Taiwan
[28:25] and the semiconductor chip industry. So but again does not mean that China will
[28:33] just take things lying down with these bands. They are coming out with their
[28:37] own retaliatory measures. And while the person are trying to put up a brave
[28:40] front for the West, it is going to take a very very long time
[28:45] for alternatives to come up, for alternative supply chains to be created. You
[28:52] know, Ana, we've been talking about resilience supply chains on various fronts for
[28:56] a very long time since COVID that's twenty Where are the regulient supply chains?
[29:03] Where are the alternatives? Who has moved, which industry has moved, Which
[29:07] country has made huge bases apart from China, hasn't they become the alternative or
[29:15] for that matter, Vietnam. It is going to take a long time,
[29:18] and especially at a time when every country is struggling economically. It is not
[29:25] an easy ask. It is going to be very, very difficult, and
[29:29] only time we will see how it pans out in the near future. But
[29:32] only time will tell where this war would head and what the impact of this
[29:37] battle is really going to be. It certainly is going to take a toll
[29:41] on the not just the economic infrastructure globally, but also the supply chains,
[29:48] and therefore we will see a surge in prices. There already has been a
[29:52] searge in the prices of germanium and gallium with the ban and the war and
[30:00] understanding the importance. So every time there is a ban or a supply disruption,
[30:07] you do see their share prices increased. So their share prices have increased.
[30:11] Yeah, this is not even rare earth material. Yeah. So lastly,
[30:15] data you mentioned India, and I just want to focus here because there
[30:18] were certain important developments just recently, I think yesterday itself. Because you know,
[30:22] it's not just China, like you mentioned, the competition, they are
[30:25] made other major players too. So the Indian government is set to try for
[30:30] I think the third of fourth time to set up a semiconductor chip manufacturing plant.
[30:36] But there's already some bad news and quite recent with fox con the Taiwanese
[30:41] manufacturer. We're drawing from its planned joint venture with India's Vinta to set up
[30:48] a semiconductor and display production plans in Gujarat. Now we don't know the exact
[30:52] reasons, but there were sources who say that this happened because of the Indian
[30:57] government daily daling on approving the incentives that it would provide to fox Conform manufacturing
[31:04] in India. Now this brings to my question that you know, for something
[31:07] like semiconductors, the governance system in the country has to be incredibly patient.
[31:14] If we invest in a semiconductor fabrication plant today, the first chip will come
[31:21] out four years down the line. And this may just be for the most
[31:26] elementaries semiconductor chips, for the advanced ones, and I think it's a different
[31:30] ball game altogether. And then you have India, where you know, all
[31:34] governance matters are subject to domestic political compulsions. Semiconductor manufacturing can never ever be
[31:44] one hundred percent localized, but our government might just be like, yes,
[31:48] you know that there will be no imports from China for the materials that are
[31:52] needed for chip manufacturing, because it suits the political narrative. And there's also
[31:56] something that Trajo Gandhi ininted out in his trip to the US recently that for
[32:02] domestic countries, because of the reasons outlined above, manufacturing has always been our
[32:09] accilles heel. So for totalitation societies such as China, it's their strength.
[32:15] Do you really see India bucking the strength and you know, getting a semiconductor
[32:22] fab plant in place. What do you make of this? Well, a
[32:25] very important question. Now India is a very late mover in the chip industry,
[32:30] but it's a critical one and it was needed, so better late than
[32:37] never. But there are two areas where India has moved on the chip industry.
[32:43] One was with Foxcorn and Danta. The other one is my Kron.
[32:47] This was during Prime Minister's visit that Micron would be coming to India. But
[32:52] then again, like I said, you know, French shoring also comes not
[32:55] with always, not with a lot of benefits. Over here, Fox cons
[33:00] pull out from India is going to has taken a toll on the whole idea
[33:08] of India becoming the alternative. Now in the supply chain industry to counter China.
[33:16] The country that everybody's propping up and looking at and talking about is India.
[33:21] That you know, India will be the alternative to China in the global
[33:24] supply chain, but we are yet to make those in roads into manufacturing and
[33:30] industry the way and the manner in which we have been talking about it ever
[33:37] since the pandemic. Tyran's Foxcon has withdrawn their nineteen point five billion dollars semiconductor
[33:45] joint venture and now Waidanta will have to go alone on this project. We'll
[33:51] again have to wait and see how Widanta really is Danta going to really go
[33:57] ahead with it or not, for Con has determined it will not move forward,
[34:01] is what the statement said and did not give details. So we do
[34:05] not know what the what the niceties of the of the of the deal were
[34:12] that it did not work. But on the other hand, look at Micron.
[34:15] Micron is coming to India and Micron is a two point seventy five billion
[34:22] dollar project that we're looking at, a plant of which seventy percent we're being
[34:28] told would be subsidized by India in in the building capacity, building infrastructure,
[34:37] all of that. So while we're talking about five thousand jobs, fifteen thousand
[34:43] indirect jobs, so on and so forth. Ramping up capacity gradually and making
[34:50] the whole thing operational by twenty twenty four would require massive master investments from India.
[34:59] So India of the total project, fifty percent physical support would be from
[35:06] the Indian central government and incentives representing twenty percent of the total project cost from
[35:12] the state government. So we're looking at seventy percent being provided by India.
[35:16] What a platform for Micron then to come on right, to come to India
[35:22] where the project and infrastructure is being built. But why is India doing it?
[35:27] Because somewhere you have to make a start. You're making a start with
[35:30] countries and companies that are leading cutting edge when it comes to technology in the
[35:36] sector. And so it is a huge, huge amount of money that India
[35:40] India is investing, not Micron. India is investing in Micron. For Micron
[35:46] to come to India. Foxcorn was another project altogether because it was not a
[35:52] G two B. It was a B to B which is business to business
[35:59] for con and with But now waid Antha might have to go alone. We
[36:02] have to see how it really happens because without Foxcon, without the base of
[36:07] the technology, how will you then make those chips with Micron? At least
[36:13] there is an understanding that we are providing the infrastructure Micron is coming in.
[36:16] All that said, yes this is a way. This is going to be
[36:20] a very difficult period for India, but also one that could change a lot
[36:24] of things for India. Should India manage to be able to because trading between
[36:30] India and China has not stopped despite all the broader tensions anna on critical trading,
[36:37] we are still going ahead and in fact, we our trade has increased.
[36:42] Cannot afford to stop here. Yeah so then so then nobody should have
[36:46] said that you know we are going to stop in the first place. Right,
[36:50] it is increased manifold. So if we know now that we are not
[36:53] going to stop trading, and China knows that they're not going to stop trading,
[36:58] then we are a great place because we can get the raw materials.
[37:01] I don't know how that will work out, but yes we can. It
[37:04] still is not banned, and we can create the infrastructure that is required to
[37:08] become the alternative. Are we going to be the alternative tomorrow? Not really?
[37:14] With Foxcon pulling out certainly, not tomorrow, not even day after,
[37:19] but somewhere down the line, India is going to be a player in this
[37:22] industry. And I just say, better late than never, because yes,
[37:27] India is a very late starter in an era that was futuristic, is futuristic
[37:32] and pulls the power to rule the world. This is text supremacy, which
[37:38] is why America is so rattled by China's growth, and which is why China
[37:45] is giving all it has to fight back because it does not want to lose
[37:49] in the race in text supremacy, which is going to be everything that any
[37:54] country should count on. Right. Yeah, I mean you are on point
[37:59] to any say this, but this somewhere down the line. When this will
[38:04] happen is a matter of question, will be a matter of question. But
[38:07] I think will end this episode on that note. So thank you for a
[38:12] very enriching conversation. And you know, I'm glad that we could tackle this
[38:16] without going much into you know, the technical aspects, because that it becomes
[38:21] really academic and a bit more you know, complicated to understand. And I
[38:25] hope the listeners would agree with me on this, And if you do,
[38:30] listeners, please let us know the number that you can reach out to us
[38:35] is eight five, double eight nine, double six, double line six and
[38:38] the email id is spots pods at the rate India Today dot com. And
[38:45] also if you're consuming this on any of the audio streaming platforms, please do
[38:49] rate us. So thank you, Gita, Thank you so much, Amma,
[38:52] and thank you to our listeners for having plugged in checked in on those
[39:00] episodes and made us a success. Um, and congratulations to the to the
[39:06] team for for having turned one. It's been successful and so far given the
[39:12] fact that we haven't missed a single episode an counting's not bad. Kudos and
[39:17] just look forward to doing more of these interesting podcasts and I owe the team
[39:24] a treat looking forward. So we'll meet up. We'll catch up zone Gata
[39:29] for this, thanks so much. We'll be back with another topic next week.
[39:34] Till then, stay tuned. Thank you,

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