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.