India's Chip Dreams, Continued

Posted by: Bruce Einhorn on April 28, 2008

Some good news for Indians hoping to build a semiconductor industry in the country. While plans to build India’s first serious chip plant seem to be stalled, the chip-design business is doing quite well, thank you very much. (For more on my doubts about the wisdom of investing billions of dollars to build fabs in India, see this item from last year.)

Back to the news: Starting from a small base, India’s chip designers are starting to become global players. Worldwide, the total industry racked up $267.5 billion in sales last year, according to the Global Semiconductor Alliance. India’s chip industry obviously is just a tiny part of that, at $6 billion. But consider that the total amount of design done by fabless companies - i.e. designers that outsourced their production to others - was $53 billion (so says the GSA in a release from April 14) and India’s numbers start to look better. (Since India doesn’t have chip fabs, it’s a fabless market and its $6 billion figure is a big chunk of the total worldwide.) Moreover, according to a recently released report from the India Semiconductor Association, an industry group with over 130 members, including Intel, AMD, Qualcomm and many other top names in the chip industry, the Indian industry grew 22% last year. That’s three times the rate of the fabless sector globally.

Sure, those Indian-generated designs got turned into chips elsewhere, since India doesn’t have chipmaking facilities. So what? Let other countries throw billions and billions at chip fabs. The Indian industry can grow at a healthy pace without spending that sort of money.

Reader Comments

indianman

April 29, 2008 10:08 AM

India's bark is way bigger then its bite. I wouldnt be suprised if it takes another 20 years for india to get 1 semiconducter plant up, while china will have 50!

Consultant

April 29, 2008 12:56 PM

China has 48 fabs today.

by-stander

April 29, 2008 2:23 PM

If globalization is the fashion what is the point of owning an expensive chip fab in India when there is ample fab capability exists in the world? Oriental pride?

Bud wiser

April 29, 2008 11:04 PM

Its better to not own fabs. Most of the US companies are selling the fab business to Taiwan. Taiwan is running the show , even for China. Good to have china manufacture it for cheap and import it from Taiwan/china. Fabs are beaureucratic entities with razor thing profit margin.

Murthy

May 2, 2008 2:17 AM

India needs Fabs , semicon foundries. They would create lot of job oppourtunities indirectly. let us create the infrastructure & woo the MNCs.. Let MNCs invest the money. We would support by services & manpower.

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Bloomberg Businessweek’s team of Asia reporters brings you the latest insights on business, politics, technology and culture from some of the world’s biggest and fastest-growing economies.

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