Remember the days when mobile phones used to be dull, slow and bulky as bricks. Times have changed and technological advancements have changed the scenario so much that cell phones today come with no less in features than a computer. This transition can be owed to the increasing semiconductor content in the electronic devices. In fact, devices such as set top boxes, digital cameras, DVD players and PC’s have semiconductor content ranging from 25 percent to 35 percent.

The surge in the semiconductor industry is affecting many countries worldwide. Semiconductor Industry Association (SIA) reported that the net worldwide semiconductor sales reached an all-time monthly record of $20.5 billion in August 2006, an increase of 10.5 percent from the $18.6 billion reported in August 2005. The semiconductor driven industry includes various domains such as Electronic Design Automation (EDA), product architecture, embedded software, validation and debugging, VLSI design, process technology and assembly and testing.

Countries in the Asia Pacific region such as Japan, Taiwan, China and India would be impacted most by this semiconductor industry growth in the coming years. Each country has identified its key strengths in this space and is leveraging them to the fullest. Taiwan’s focus in on value added IC design, productization and advanced IC manufacturing, while China banks on its low cost manufacturing and regional distribution. India is also a frontrunner in this race with its expertise in the chip design and software domains.

India has a credible IPR framework and excellent track record in Intellectual Property Protection. The growing middle class consumer base with very high disposable incomes has led to an explosive escalation in many other verticals such as gaming, TVs, telecommunication, retail, automotive and other areas. The ISA–Frost & Sullivan reports predict that the electronic equipment consumption will grow to $363 billion by 2015 growing at a CAGR of 29.8 percent. Recognizing this trend, major electronic manufacturing companies such as Flextronics, Nokia, Motorola and Samsung have started their operations in India.

The next logical step to complete the semiconductor ecosystem in India would be to support the electronic manufacturing, chip design, EDA, testing and other activities with semiconductor manufacturing in the country. But as the chip-manufacturing segment requires heavy investment, industry members are debating its viability in India. Some members feel that India should initiate this process by starting a two-three generations old fab. Others believe that it does not make business sense for the country to start semiconductor manufacturing in India. Many others strongly feel that countries that lead in chip manufacturing have done it with strong Government support and hence one should look at the Government to take part in this process through investments and tax exemptions.