Though semiconductors is now a relatively mature $ 200 billion a year worldwide industry dominated by a few large players, new technologies and applications are still emerging regularly and certain segments show growth of 30 percent per year. India simply cannot ignore this high tech industry that provides the building block for high tech civilian as well as defense hardware, in part because of China’s growing role in it.

In a future trade or military confrontation India’s software skills and revenues there from may prove to be inadequate to compensate for its lack of hardware production muscle.

For the success of its much-publicized Moon Program (“Chandrayaan”) India would need access to semiconductor based sensors, logic and actuators of specialized designs to minimize the weight and improve accuracy of its space vehicles. This was perhaps recognized in the recent takeover of the two-decade old and obsolete Government Semiconductor Complex in Chandigarh and the decision to upgrade it. However the emphasis there still seems to be production of chips currently in vogue (e.g. for smart cards and mixed signal) by importing the latest semiconductor process and design technologies rather than staying abreast via sustained development efforts in - house.

Driven by their obsession to catch up with Japan, their one–time colonial ruler, the South Koreans boldly embarked on manufacture of semiconductor memory as early as the mid 1980s. At that time they had hardly any PhD scientists and quite predictably the whole attempt crashed culminating in the liquidation of Hyundai Semiconductor in the late 1990s.

Taiwan was a relative latecomer to the semiconductor game but since the late ‘90s have became a world-class provider of manufacturing services for the most complex digital processors. Before launching their wafer fabs Taiwan first carried out sustained academic and industrial research over two decades in targeted areas of semiconductors and then attracted back numerous Taiwanese employed in the U.S. semiconductor industry. Since the early 2000 China on the other hand has launched several semiconductor wafer fabs using semiconductor technologies it obtained by arm-twisting foreign MNCs that were lured by China’s cheap labor. China’s wafer fabs today are still far behind those of Taiwan. China’s failure to innovate on their own is however greatly masked by the Chinese governments insistence on use of domestically produced semiconductors—even for outsourced assembly of consumer electronics. Singapore too tried to launch its own wafer fabs but without the academic strength of Taiwan or the outsourcing leverage of China has so far failed to make headway.