Why does India lack fabs?
By Benny Thomas   |   Wednesday, 03 June 2009, 15:40 IST   |    9 Comments
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Why does India lack fabs?
Bangalore: Though projected as a 'Technology Hub', semiconductor is one space, where India is yet to make its presence felt. Smaller countries like Taiwan and Malaysia have been the frontrunners in this sphere, while India has been lagging behind. Thanks to some of the government policies, the Indian semiconductor industry is still in its nascent stage. "What Taiwan and others have achieved is not only because of the companies, but the government had also actively involved," says Vishal Borker, CEO, NextBit Computing, a company that provides complete design and optimization of semiconductors. The demand for products using semiconductors is very high in India; to tap this potential a major thrust is required in the semiconductor manufacturing sector. The consumption of electronic goods and embedded systems in India has been on the rise. Starting with over $10 Billion in 2004, Frost and Sullivan projections for consumption in 2016 are over $300 Billion, mostly for cell phones, personal computers, set top boxes, and other communication devices. With such a demand predicted, India still can't be knocking at the doors of companies elsewhere to fuel its own market. While there are a number of fabless companies in India, who design and conceptualize semiconductors, only a few companies go on to manufacture it. "The semiconductor products are still being manufactured outside, while the engineering happens in India," says RK Patil, Founder, Vayavya Labs that provides tools for semiconductor & embedded design firms. According to Patil, the companies are reluctant to invest in fabs in India as it is very expensive and also because of the lack of government initiatives. "The government needs to be proactive and aggressive in helping the growth of the semiconductor industry," says Borker. According to Borker, the fabs in India should start focusing more on innovative products rather than only looking at products like DVD players that are easily available. Currently, products with high technology like Personal Video Recorder (PVR) are imported bearing a very high price tag that attracts fewer buyers in India. "Those products imported from outside the country are very expensive for the consumer, so India needs to manufacture these at a cheaper price for the consumers," Borker added. According to a report by Gartner, the global semiconductor revenue has declined by five percent in 2008. "This is a short term effect and the purchasing will surely go up," says Borker. On the other hand, Patil feels that new designs and products will take a backseat because of the economic slowdown. Both Borker and Patil feel that the future of Indian semiconductor industry is promising. "The Fab City project in Hyderabad is a step in the right direction," said Borker. More companies have started investing in semiconductor development and this can nurture this industry in India. Having been the leader in providing IT services for many years, India should now start emerging as a major semiconductor player in the world to meet its own demand. Many Indian semiconductor startups are trying to capture this opportunity in front of them, to meet some these startups visit Startup City on June 6. To know more, click here, https://www.siliconindia.com/startupcity_09/index.php

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