intel and the outsourcing Tsunami !..
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Surprise or shocked to hear this news..? well my kid also reacted much like same after hearing this, and she was like, "Daddy last I overheard u about was, Haldiram also started selling chips! All I know is Lays, Uncle chips, Bingo are the only who make delicious crunchy chips.. Never knew Intel also was making them at the first place, and now decides not to make them altogether!"
In COVID era, with people glued to the screens for work or entertainment, aren't Wafer or laymen chips to be the best companion of anyone? And with this booming profitable business in sight, which is expected to grow further, who on earth will think to exit from this? Now Intel doing contrary and will stop making Chips?!!
Well I was like flabbergasted for longest time ever for 2 reasons
1/ Her tracking of breaking news and being so concerned for supply of Chips. Though we have made a conscious efforts since long, to discourage aerated drinks and wafers in our house..
2/ Her lack of understanding about Intel and making Intel to compete with Pepsico, Haldiram in wafers , as if fighting with AMDs of the world in its core area i.e. Semiconductor the heart and brain of all computer devices was not enough.. Her ignorance on this semiconductor things can be understood, which might got tangled among thousands of other equally so called important things; she is suppose to know and be expert of in, young age of 9 years .. !! Is it not asking too much from such young age?
While I politely told her that Intel makes semiconductor for computers not her chips, and brought attention to the Intel logo pasted on her laptop .. In the hindsight promised to treat her with favorite onion cream flavored lays.
I could not take my attention off this "Intel not making their chips" story, which was identical to "the famous scene in Mahabharata when before the start of Epic Battle, Karna giving away his armor to Indra, knowing well enough that he not having these implies his sure death". I tried drawing parallel with Intel story; and started thinking about Outsourcing; its economy and the fall outs among societies, people and nations. The fall out impact has become very delicate in the COVID era of shifting alliances among nations.
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When I dig dipper in this particular news, I figured out that INTEL_numero uno of semiconductor industry which is essentially the heart of a computing device is in big trouble of late and has been contemplating to outsource much of the real work to some giant in Taiwan TSMC. TSMC plant is just across the ocean to mainland china. The need to focus on core research was the reason given for this planned move. Arch rival AMD catching up with Intel and improving its image in consumer computing segment. In the mobile category battle is already finished for Intel, as it has been outclassed by snapdragon and Qualcomm by a far wider margin. With so many of the things already going against it, contract manufacturing of sensitive semiconductors to far land could seriously jeopardize the intellectual copyright edge it has so far in domain of Space technology, nuclear technology and machine learning because China repeatedly has been accused of intellectual property theft by western countries.
With imminent risk of losing tightly guarded tech secrets which could pose a existential threat to the company; decision to outsourcing is quiet intriguing..
To solve this puzzle, I will take you all back in in time to explain what this outsourcing is all about
Type of Outsourcing
Outsourcing is of 2 types. Services and Products
Services is a type which is intangible and never lasting, but rising cost of this is a latent phenomenon. Cost of this is inversely proportionate to the scarcity of time. Household chores, BPOs,IT come in this domain.
Product outsourcing is an age-old practice and is linked with finite available resources. Improved technological advancement has made the availability of this prompt and affordability is going up with each passing day.
I categorize Outsourcing as a demon on 3 fronts:-
1: Ghar Ki
Since long household gossip topics were pointing outwards such as new Netflix series, summer vacation plans, the new Insta post of Diljit Dosanj. This trend has taken 360 turn and now galvanizing inwards i.e.
New Paneer Tikka recipe - Cook is not coming
Checking reviews on Dishwasher - Maid is not coming
Subscribing YouTube channels on Mathematics - Tutor is not coming
What could be the reason for such helpless condition almost all of the Indian middle class has seeped-into? Answer is Kamchori. I mean kamchori for such menial but critical tasks by outsourcing them to helps of various skill set. Only excuse given is we do not have time at home.
I m not getting into the complexity of weather these jobs should be outsourced , and also I m no authority to tell; who in family should have done these jobs at the first place especially when the so called over hyper gender-superiority wall has been crumbled.
Instead I m trying to draw your attention on the hopeless state majority of us are into, due to no-show by the outsourced party to work since last 4 months!
It is good to become AtmaNirbhar and avoid such exigencies
2: Border Ki
A nation can never defend its soil if it does not attacking attitude.
In order to take the first movers advantage and surprise the enemy by shock & awe policy. that will happen only when you have will power to remain a leader not a follower.
History has been the best witness of all the global conquest where the one who took fist step remained undefeatable and ruled the far lands for many generations.
Those who do not have a firm stand on this; are prone to complacency which I name Kamchori as a trait and makes you scout for ideological high grounds under whose cover one wants to find every possible reason for not to work! Fighter Aircraft Tejas is the best victim of this casual approach. The first delivery of these jets was made in late 2019, which is 30 years after the work started on developing an indigenous air capability.
In today's fast changing geo political scenario the friends and foes are decided not by the ideological bonhomie; but purely by the self interest of the nations. We have plenty of examples of cold war era and this divide is taking new turns with global order of supremacy is heading towards complete upheaval.
So far this was happening little far from our borders but now this is happening very close , just under our nose and very much directing towards us. Otherwise who will fathom this logic defying developments.. Nepal deploying army at border, blocking Indian News channels; Bangladesh (a nation whose existence itself was made possible by India) giving Chinese defense installation access to its assets both in land and sea; which is a direct security threat to India; Maldive's Topsy and turny moves with each subsequent govt in power is not a very recent development.. and if this was not enough we have face off with China at Laddakh region and this can stretch upto full 3580 km, the border shared with it.
our Kamchori or fake sense of complacency has reached such high grounds that we started scouting global arm market in order to buy the even basic arms and ammunition in 11th hour.. With war looming large right at out face , we ask China to wait till we finish our shopping of arms..
Our continued approach of defense with others hand will cost us dearly again just like the 71 war.. I mean otherwise who will approve of buying S400 at the cost of billions . A defense tool which will be delivered to us in long future but already has been sold and delivered to China, the one country who see us as a direct threat to it global dominance on 3 fronts i.e. military,economically and ideologically.
I mean we have been outsourcing our defense since decades to others and appears to be moving in same direction without any blink even after such hue and cry made on MAKE IN INDIA in last 6 years by current govt to make India self reliant.
whereas China Imports/outsources it defense, only to get a a bunch of those tools and then follows the tried and tested reverse-engineering to dissect each part to understand it; and finally makes it own better and improved version.
As a country of 1.4 billions why can not we develop indigenous technologies in field of defense to make world class infrastructure and take aggressive postures to fend off any evil eye beforehand..
For that only and the only ingredient required?.. we need to shun Outsourcing in fields of strategic needs .. In simple words "be less Kamchor as a nation!"
3: Economy Ki
Economics is the field of Opportunity to maximize profits. Trade will prosper with those who seek every opportunity to increase their profits. In the age of consumerism there are two ways of increasing profit - Either reducing the cost, or improving the economy of scale by increasing the sale.
Wider and faster reach of information has made access of technology or know-how of things much easy, and thus competition has been scaling up in almost each field. In this scenario, it is very easy for someone to come up with alternate and cheaper option in short period , hence the ramping up the sale volume and achieve economy of scale is daunting task unless your product is unique and is protected well within copyright and patent umbrella to deter cheap copies. This leaves us with only one option, and that is reducing cost!!
How to reduce cost - Simply by conserving your resources for the expert tasks and delegate the generic tasks to outsiders which is called Outsourcing. It therefore focuses on core competences and seek to reduce operation cost which presents outsourcing as the right strategy. It is the replacing of in-house provided activities by subcontracting it out to external agents. Outsourcing avails organizations the opportunity to concentrate her core competencies on definable preeminence business area and provide a unique value for customers. Also worthy of note is the fact that present day outsourcing is no more limited to peripheral activities such as cleaning, catering and security. Now outsourcing also include areas of prominence for an organisation such as design , marketing , information system etc.
This urge to maximize the profits will have merits and demerits at the same time. Few of them are listed below_
- Lowers barriers to entry
- Outsourcing erodes company loyalty
- Outsourcing can cause job loss in the domestic workforce
- Outsourcing affects on In-sourced country
- Ecological Impact
- Social Impact
Where this leads to
ATMANIRBHAR BHARAT 
In the analogy of natural progression up-skilling and value addition is helpful, which keeps the craving for exploring and experimenting with virgin thoughts and that is how human race has come this far. Maintaining a balance is essential to keep all components of Eco-system productive..Outsourcing is inevitable but domestic market should get the preferential treatment in allocation.
It is likely that the profits will not be in tune of set parameters both in volume and time frame; and will certainly need high engagement between both parties.. But this act is a sustainable and will give higher yields in longer term; without any strategic conflicts with external factors.
So Intel needs needs to be more agile and go with the flow in highly dynamic and competitive field of semiconductors instead of opting for outsourcing. And matter of fact both Haldiram and Pepsico have outsourced since very early their production; to some SMEs within India who are delivering these crispy juicy chips in our plates
OMNAMAH
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