Automobile sector is the top gainer today as latest reports suggests that the semiconductor chip shortage issue (which caused lot of disruption to the supply chain of these companies which in turn affected their production and also the margins) is now easing.
The start of the Covid-19 crisis in early 2020 prompted a global spending spree on electronic items – from extra monitors as people rushed to set up home offices, to televisions and games consoles for beating lockdown boredom.
Temporary factory closures due to the pandemic also put pressure on supplies. There were other reasons too for the shortage of semiconductor shortage
Read here to know more about the reasons for the shortage.
As per the research report by ihsmarkit , Chip shortage has cost the industry 7.4mn units year-to-date
It seems very likely that the temporary headwinds which plagued the auto companies from last 4 odd months are slowly easing out and the stocks are therefore cheering this good news.
The only semiconductor fab in India is the ISRO owned fab in Chandigarh but with a 180 nm process which is sort of archaic now. The latest is 5nm to put things in perspective. Let alone semiconductors even basic passive or active components in modern small profile high frequency designs come from outside the country. We have to go a long way before we become an electronic component manufacturer.
Besides semiconductor fab is an expensive one to set up and maintain. Technology changes and becomes obsolete in a very short period of time warranting continuous investment in new processes and equipments. This is why even US has only 4% share in the pie. All the so called semiconductor giants like INTEL, XILINX, Qualcomm outsource manufacturing to contract manucturers mostly TSMC in Taiwan.
The bottom line is India is a poor country. Semiconductors would become a priority when most people don’t have to struggle to put 3 meals on the table every day.
Interesting update : This space is buzzing as it should be. One can only hope that our industry and govts does things proactively instead of waiting for a global shortage to happen
More and more investment is needed in order to make sure that our country does not face any more shortage of semiconductors. Maybe the Government has already announced PLI for this industry, I am not sure, but let’s see how well things progress from here.
Rest of your points are ok , but its not just the question of 3meal , People in India should stop buying cheap Chinese products , every thing becomes normal and many of the Indian people get the Job
Real India is poor as reflected in the HDI. Out of 138 crore people there are only around 1.46 crore tax payers in this country. Unless we uplift the masses socially and economically, govt would have less leverage to use public money to incentivise a capital and technology intensive semiconductor fab industry.
On a side note china accounts for almost 80% of worlds total electronics production. If you have a piece of electronics there is an overwhelming chance that it has some significant Chinese content.
This what i am saying , please don’t buy any Chinese products, educated people like you buy Chinese product , that makes Indians much poor & makes Chinese makes rich.
If we decide we are going to boycott china then we cannot buy any electronics. Like it or not china is a manufacturing powerhouse of this world. From LED bulbs to mobile phones to electric cars there is a Chinese input directly or indirectly.
