Q: So so our subjects may focus on two area. So my first question is, so India wants to take a step up the semiconductor manufacturing value chain. So could you give us some analysis that a series of India governments’ insensitive effect to match this ambition?
A:India is a little bit behind the schedule of the technological advancement in semiconductor. We faced a chip shortage in a very bad way. All other countries face chip shortage, but India faced most and all the sources for chips like Europe or China or US ever throws during pandemic, before that the shortage was already started. So that was the recent government thought that we should have a manufacturing facility available in India that would increase, having better electronics devices in future.
Basically, they launched to schemes called PLI and DLI, both of them are really good scheme, and all the country has told that this game is going to be a game changing in semiconductor industry. This is not only an incentive which a government is provided. Government is providing a really nice support for the companies who want to start the fabrication process for chip and display. So they are giving all the support for that particular ecology, starting from availability of land to electricity and availability of excess everything.
Q:Also, you're saying that the India government is giving all kinds of all sorts of support to grow this industry and grow this business, right? So to build semiconductor fabrication plans is a heavy assess industry for high stacks, where Indian private sectors be showing enough weakness to invest in this area?
A:Private sector was having interest on starting semiconductor of business since decades, but lake of a lot of resources. And as I say, these are a very capital-expensive business. You cannot started in a very short period of time. So now looking towards the growth of the economy, looking towards the growth of private sector, looking towards the investment capacities of companies, this thing has become a reality. Before that the investment was one of the issues. We have less semiconductor development. But scenario has completely changed after 2014. And if you look at the interest of big companies, most of the companies are interested in semiconductor, particularly all the companies who already have crossed $10 billion in the valuation they are interested in entering into semiconductor business.
For that, I think all neighboring countries have lot of opportunities, because I think everyone will agree that 21st century belong to Asia. So this is our time, nobody can disagree on that. Even western countries cannot disagree that the 21st century belongs to Asia. For example, the lasers are supplied from China, the equipments are supplied from Korea. The reform based equipments are also in a part of the value chain as well. This is kind of an Asian revolution, I believe. This is not the only Indian revolution, it's completely Asian revolution. All neighboring countries also have a kind of business types with bigger companies, and that make some more progress in terms of completing the projects.
Q:So the Asia, it's like having this role in this whole industry. And I'm also curious, so it's not only like we're building an industry. We also have markets in India, right? We so it's like when comes to manufacturing, so what role does India software market do you think is playing in chip design?
A:I think everyone knows that 75 % of global chips are designed by Indians. So the talent comes from India and because of the growth of software industry. So the VLSI expertise are a kind of a huge potential India already have. Only potential we didn't had was fabrication facilities. So if you look at the overall software industry, we already have talents in all the countries. You can see Indian software engineers. So things for a support of software industry, hardware is completely added advantage. And even for a fabrication process, you need a lot of software support. So that is already available. So that was never a challenge.
Q:What do you think are the advantages of setting up a semiconductor fab in India compared to other regions?
A:The first advantage I see is that we have our own demand. And we depend on a lot of things, even a lot of problems caused by the other politics. Basically, I work on aggressive level. So my focus is not on internet, international politics, but my focus on people to people connection, right? If you look at us, a manufacturing facility in India face a lot of challenges importing microchips, right? Whether that is from Asian country or that is from Europe or US, we really need some foreign companies to have the fabrication facility in India.
That's okay if they make a good business, right? Even we are also making good business, it would be great to have a business with other countries as well. If other countries making fabs in India, we are able to compete with the demand. Right now, the gap is huge. So a huge is a small word, I guess it is gigantic. The gap is gigantic. That is the most advantage we are looking for that, like other countries make fab in India.
Q:So you are mentioning like, so there are some challenges. So if you want to invest and build chip fabs in India, right? Can you talk more of that?
A:So basically, there are no challenge. I tell you why. The first thing is, you will find good talent at a good cost in India. It do not have to hire people from a country where you have to pay in euros and dollars. That's one of the advantages. Second thing is that India has been a partner with a lot of international companies, and those partnership have been really nice if that Mahindra has already a plant in China, and that is kind of a very successful partnership throughout the decade. I think it's almost a decade that partnership started. India has been a really good partner with them. India would definitely help others to overcome the challenge. So the company who's coming to India don't have to face challenge alone.
Q:Actually in the second quarter, India was one of the few major markets where smartphone shipments grow 8 % year of a year. It's becoming one of the largest consumers of semiconductor outside US and other traditional markets. So do you see any connection between this? And as we say, the strong growth in chip manufacturing in India this year? So do you see there any connections?
A:That is a direct connection, a reason. If you see, like in last 7 years, the major Internet users are from mobile devices that is increasing every second we talk, right? Whether you see developed countries or the untouched regions, the Internet users are increasing every day. It's directly increasing the demand of microchip, that is the first thing. Second thing, the automation involvement in all the aspect from smart home to industries and commerce and everywhere, transportation or logistic. The increase of automation also increased the demand for microchip. I believe that it is directly connected to what you ask. I believe there is a room for everyone for such kind of demand. I don't think there is one boundary for any country or any company. This is tennis room for everyone, and there should be opportunity for everyone.
Q:So also there are a lot of rumors suggest that Apple plans to begin manufacturing the iPhone 14 to narrow the gap between China and India. So do you have any comments on the speculation?
A:I actually heard about rumors, but I believe that not only iPhone, there are a lot other smartphones also being manufactured in story. Yeah, but if you look at the demand, a Foxconn major manufacturing still in other countries compared to India, some part definitely going to be manufactured in India. Maybe not the PCB, maybe not the critical devices, but the other assembly parts. Maybe main assembly can be in India. Of course, unless we have our eco chain of fab, it is very critical to make all the components for iPhone in same country.
It's still like we got out of shipment phones in different countries, right? As far as iPhone 14 manufacturing is concerned, the drastic security controls and stringent circulation of its China facilities would not be easy be replaced. So do you have any investigation on the labor cost in India?
Basically, if you look at the labor cost, it won't be a huge difference between India and China.
That is first thing. Second thing is like, if you look at the demand, India is one of the biggest buyers of iPhone. That makes difference like Tesla is producing cars in China because they don't want to import cars from other countries that makes difference. Even if that is having a really good facility for iPhone 14, then it will cattle only Indian demands for now. That is my calculation. I may be wrong. Nobody can give any exact figures at this moment. Nobody can. But if you look at the demand, the facility little cattle only Indian demands for now.
Q:So that's all of my questions. So do you got like any other like comments or suggestions that you want to back up or you want to make?
A:First of all, I believe that there are room for everyone, why there is a word called chip war. We do not need any kind of a chip war, oil war or anything, we can work together. We can help make new generations, a really nice technological ecosystem, why we are still having like this country's leading, this country's behind? No, we should ever be on same page. That is wrong, as I told you that this is a very growing market and everybody has that piece of cake.
I think we can make a win-win situation and as a big group of Asia, we're making progress, we're all making progress somehow.
We definitely should help other small Asian countries who are facing a lot of issues. We definitely get together and help them, because nobody is going to help them. So that is one sort of thing. There are a lot of a talent reciting small countries of Asia. I've seen they are doing their post situation in a semiconductor fabrication from western countries, but they cannot go back to their country. And they had their countries, they have to join the big giant companies. So that is kind of a thing that you invest in your country's future and the talent goes out. I think that China will face the same situation. So this is the situation we face all, so we have to work on that as well.