iTWire - India deal with Micron Technology dismissed as a PR stunt

Thursday, 06 July 2023 09:40

India deal with Micron Technology dismissed as a PR stunt Featured

Courtesy: Micron Technology

An Indian journalist, who is also a science and free software activist, has dismissed the deal which India signed with American firm Micron Technology recently, calling it simply a PR exercise.

Prabir Purkayastha, founding editor of Newsclick.in, wrote in an article published both on his site and Asia Times, that the deal, signed during Indian Prime Minister Narendra Modi's recent visit to the US, was not for any high-level key chip-making technologies.

Modi was feted by the US administration during his visit, with US President Joe Biden literally falling over himself to treat the Indian leader with great pomp and ceremony.

Purkayastha pointed out that the Micron deal was "only for packaging of the chips, their assembly and testing, a relatively low end of the electronics industry".

On Thursday, India’s minister of electronics and information technology Ashwini Vaishnaw said the construction of the US$2.75 billion (A$4.13 billion) Micron chip assembly and test facility would begin construction in Gujarat, Modi's home state, in August.

He said the country's first domestically produced chips would be available by the end of 2024.

But Purkayastha, writing on 30 June, noted that while Micron was a major manufacturer of memory chips, what it was offering at the Gujarat plant was only assembly, packaging and testing of chips that had been fabricated elsewhere.

"Micron has such chip fabrication plants in the US and also in China, whose products, will be packaged and tested in India," he wrote.

"So if chip-making was India’s goal, it will not be delivered through the Micron deal. What India is getting is the lowest end of the chip-making technology, assembling and testing chips that have been made elsewhere."

He said India was thus not competing with the US, China, South Korea or Japan on chip making, but with countries like Malaysia which was already streets ahead in this area, with about 13% of the world’s outsourced semiconductor assembly and test market.

"Locating such plants in Malaysia and now India will be part of the de-risking strategy of US companies, where they shift the low end of chip production to other countries while encouraging new high-end chip fabrication in the US, such as Micron’s US$100 billion mega-fab in Clay, Washington," Purkayastha explained.

"The total cost of setting up the [Gujarat] plant is estimated to be US $2.75 billion, with the central Indian government providing a 50% subsidy and the Gujarat state government throwing in another 20%. Micron is investing only 30% of the total capital.

"In other words, Micron will hold 100% ownership of a plant costing US$2.75 billion, in which it would have invested only US$825 million. Even industry reports, such as eeNews Europe, call this an 'extreme level of subsidy'.”

The entire Micron deal was part of a public relations exercise to burnish Modi's image which had been tarnished by his party's election loss in the state elections in Karnataka and the riots in Manipur, he claimed.

"There is no question that India, having missed the chip-making bus, needs to ramp up its ambitions and bootstrap a chip-making industry. To do this successfully, it has to have a plan, where to invest and how much to invest, and when to invest," Purkayastha noted.

"Yes, it has to return to old-fashioned planning, dismissed by BJP-RSS ideologues as 'socialism'. And yes, every country plans its science and technology, including how to develop people, the key to technology development."

The BJP is the Bharatiya Janata Party, the party which is in power in India, while the RSS or Rashtriya Swayamsevak Sangh is its ideological wing.

"Instead, what is India’s path forward, and what does it need?" Purkayastha queried. "Paying 70% of the cost while offering land and cheap labour so that a US company can get 100% of the ownership, in a segment where countries like Malaysia are streets ahead of India, is not investing in technology. It is simply a PR exercise."

Read 78 times

GARTNER MARKET GUIDE FOR NDR 2022

DOWNLOAD NOW!

PROMOTE YOUR WEBINAR ON ITWIRE

MORE INFO HERE!