Disc: Not invested, just very interested in the Chip scene in India.
If I would have been a Vedanta investor I would have been relieved, according to me getting into the Chip business is deworsification for the company, I mean Chip manufacturing is a high-cost, high-tech, highly specialized business, with very concentrated supply chains. I mean just setting up FAB requires 5-10B USD.
Of course, I know the company is still looking for partners and they might be able to find some manufacturing and tech partners, and still get into this business but I don’t think it is tactful and will not be profitable for a long time, I mean China[not Chinese companies] is trying to develop own chip manufacturing plant, for at least 2 decades with all the backing of corporate espionage, state machinery, and almost limitless money, but they are still just trying, so I am very much skeptical that Vedanta can do better, or India for that matter, of course, if we are able to get big chip manufacturing companies[Intel, Micron, Samsung, Maybe TSMC] setup manufacturing in India with some Indian companies as Partners then we might be able to get some expertise with tech transfers and whatnot, get chip manufacturing of the ground in India, but most the big chip companies are already investing heavily in US, Europe, Korea, with better infra, more incentives from the governments etc, so we have to see, government of India is ambitious and they are trying, but it just so hard to get into this.
In summary, I am not rosy about the chances of Vedanta in Chip Manufacturing with all their debt problems as well, but they are least trying I don’t see any other company srsly trying even.
PS: Tata Electronics is much stronger and I would bet on Tata Electronics if they get into this, they have some expertise through Tejas, and they are very smartly integrating themselves into the supply chain with Apple product manufacturing, and what I have read they are working internally to participate in chip manufacturing, but nothing concrete as of now.
Read Chip War it is a nice book to understand Chip manufacturing, its history, and many other things.
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