Why Vedanta-Foxconn Semiconductor Plant Will Reduce Technology Cost, But Not By 60 Percent – Technology News, Firstpost

In a major step for Make In India, Vedanta and Foxconn will set up a semiconductor plant in Gujarat For 1.54 lakh crore rupees. Speaking to CNBC-TV18 about the development, Vedanta Chairman Anil Agarwal stated that “Made in India” semiconductors could have a significant impact on the prices of end products.

Explaining why the Vedanta-Foxconn semiconductor plant will reduce the cost of the technology, but not by 60 percent

Then we went on to say that once the glass or screens that are currently manufactured in Taiwan and South Korea start to be manufactured in India, the final price of the laptop which costs around Rs 100,000 today, will cost Rs 40,000. This is a 60 percent reduction.

India will emerge as one of the world’s largest contributors to the silicon wafer and semiconductor industry in the coming years. It is not a question of if, but when. However, to reduce the prices of finished technical products by 60 percent, it will take us a long time. Moreover, it will take a large volume.

It is expensive to develop new products even if it uses technology and ingredients that have been around for a while. Among the R&D, marketing research and licensing fees that go into making a smartphone or laptop is mind-boggling. The actual cost of raw materials, components, as well as labor to put everything together is much lower, when we consider the cost per unit.

Then, there’s the fact that tech companies often don’t plan to ditch their profit margins, even if manufacturing costs drop. Let’s take Apple as an example.

It takes Apple about $570 or roughly 45,000 rupees to make the iPhone 13 Pro. This includes raw materials, labour, shipping and marketing. Apple sold the 128GB version of the iPhone 13 Pro in India for around 1,20,000 rupees. This iPhone 13 Pro will cost $899 or Rs 72,000 in the US or Canada.

back in April, Apple started making iPhone 13 in India, at the Foxconn plant in Tamil Nadu. In theory, Apple should have offered a discount, or better yet lowered the iPhone 13 price in India, now that the device wasn’t subject to the same number of taxes as before.

However, we’re only seeing a discount on the iPhone 13 series now, after the launch of the iPhone 14, and the fact that many e-commerce platforms are trying to sell their stock this holiday season.

Continuing with Apple, let’s take a look at another example. iPhone 14 Pro costs about $999 in the US, while in India starts from 1,29,900 rupees. In about Apple month It will start making iPhone 14 Pro in India, along with the rest of the iPhone 14 series. Will Apple review the price of the iPhone 14 Pro and sell it cheaper? Or, will Apple start offering a discount on the iPhone 14 Pro? Improbable.

Semiconductors and displays made in India are sure to cut costs by a huge margin. Tech companies will easily be able to reduce input costs by as much as 15-20 percent. If the proposed semiconductor plant achieves economies of scale early on, technology companies may be able to cut input costs by as much as 30 percent.

The costs of the final technical products will certainly decrease significantly, but it is unlikely that they will be 60 percent. However, the bigger question is whether or not this feature is passed on to end consumers.

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