The fast-paced technology is getting larger. Indian smartphones and gadgets are also holding a huge audience. But, do you know the Indian microprocessor industry is far left behind. India does not make microprocessors. Although the valuation of the semiconductor industry is at 500 Billion Dollars and holds 17% of GDP, then why?
So, in this article, let’s figure out the details and causes, why the Indian microprocessor industry is behind and why India does not manufacture processors.
What microprocessors are?
Simply, a microprocessor is a small integrated circuit (or several circuits), which processes data logically and controls it. It contains all the circuits and programs that are required in logical and arithmetic operations. A processor is also referred to as a CPU. The integrated circuit in a microprocessor executes instructions and performs necessary operations.
Manufacturing microprocessors is a difficult process. It is uneconomic, even a small chipset takes 3 to 4 Billion Dollars in manufacturing.
While microprocessors come under the semiconductor industry. So learn a little about the industry as well. USA, Taiwan and China dominate this industry. These countries hold 90% of the manufacturing of microprocessors over the world.
As we stated earlier, manufacturing microprocessors is very difficult. Every computer supports microprocessors, from a calculator to supercomputers. This industry is already settled, where few companies dominate the whole market.
Most companies roll out intel processors. Whereas, ARM licenses its processor design to other companies. Hence, no company develops processors from the very beginning, they just modify the existing ones.
Intel is the largest microprocessor manufacturer. The company has more than $77.87 billion in revenue. And is the largest revenue giant in the semiconductor industry. The company transports microprocessors to the biggest companies in computer and technology. Such as Lenovo, Dell, HP and many more.
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Why India can’t make microprocessors?
If we talk about the Indian microprocessors, two things support the industry: hardware and software.
Hardware includes all the compatible devices through which people can use the processors. Whereas, the software comprises programs, that make use of microprocessors and hardware to execute operations.
As the industry is well developed and settled, the hardware and software are completely based on the existing processors. And, in the case of bringing a whole new microprocessor, almost everything needs to be changed. It will create many compatibility issues and program creation will be very difficult.
Developers will not be interested in manufacturing programs for such processors which don’t have a market. Simultaneously, the hardware manufacturers will also not produce such hardware, for which there is no program available. And this cycle will go on.
Hence, holding the position in this industry is only possible for India, when it manufactures something extremely different. Such processors will redefine the whole industry and bring interest in hardware and software manufacturers.
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Why is Indian microprocessor industries isn’t developing?
The main problem is the architectural design. Intel and AMD manufactured such microprocessors that no one has created until now. If an Indian microprocessor has similar architecture and replaces Intel and AMD, then the design will be marked as illegal.
If India will manufacture a microprocessor, still no one will buy it. Because the industry is already developed and well settled. And, also the small industries, like Texas instrument, Hynix, Transcend, etc, are dominant. To hold a good position in this industry, there must be something revolutionary.
It should develop microprocessors that are cost-effective, more powerful, more efficient and less time-consuming. Only then, the developers will take an interest in it. And then they will create programs for the newly designed microprocessor. But doing such a thing is perilous. As it has no surety, and if it fails, then everything invested will exploit.
But, somehow creating a microprocessor from the very beginning will encourage other companies to take part. And in such a case, the industry may transform.
The other problem for India is, manufacturing microprocessors is very expensive. As we stated, even a small chipset requires 3 to 4 Billion Dollars in manufacturing. Whereas Silicon manufacturing plant alone requires 8 to 12 Billion Dollars. And the efficiency of these companies depends on the demand. But, in India, there’s not much demand, also no company is ready to take this much risk by investing.
Why are Indian companies not interested?
The big companies such as TATA, ISRO, Wipro, etc, have their own kind of specialised processors. But, they are not interested in outing them in the market. These processors are not for general use, they are specialised and created for special applications. There is no monetary benefit to the company behind creating these processors. They are just to ensure the smooth running of their company’s functions.
And right now, no Indian company is ready to raise high investments and risks.
Options available for India
There are few options available for India. The first one is, India manufacture a microprocessor by taking a high risk. But, it is very difficult when no one is ready to invest a huge amount in the startup.
Also, if the other manufacturing companies like in Taiwan, USA and China, can start plants in India. This is only possible when companies or investors see a huge potential and need. But, even after that only the parent company will get monetary benefits.
The other option in front of India is, it can license the ARM designs. Like many other companies, India can modify them and can roll out these processors in the market.
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With the above information, we can conclude that it is very difficult for India to take a position in the semiconductor industry. The industry is already huge and is at the stage of the highest possible development. So, starting from the beginning and bringing something revolutionary will only help the country in the upliftment. Whereas, due to the high risk, there are very less chances that Indian companies would initiate this. But, if it does, then it will increase the economy of the country. India can also export its processor to other countries, which will bring in foreign exchange.
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