Apart from hundreds of
Indian Companies, last few
years has seen explosion of
chip design work in India with the
emergence of offshore design
centers set up by TI, IBM, AMD,
Intel, Broadcom, Motorola, STM,
Cisco and others.While India has
grown by leaps and bounds in chip
design, it did not have any
appreciable history in
semiconductor fabrication. Its
reported that the semi conductor
imports by India in the last year
stood at a whopping US$ 2.8bn,
powered by zooming consumption
of electronic gadgets including
mobile phones, digital cameras,
MP3 players and more.
Unfortunately the country had no
policy / plan to support
development of Semiconductor
Fabrication industry. The steps
towards development of chip
fabrication was initiated in
2005-06, based on proposals of
SemIndia (a consortium of NRIs led
by Vinod Agarwal and NSTI
promoted by Jun Min of
Seoul-based Intellect Inc. They
offered to set up semiconductor
foundries at the industrial park
called Fabcity developed by
APIIC (Andhra Pradesh Industrial
Infrastructure Corporation),
near Hyderabad.
After lot of dithering, on the
extend of financial support to be
given for the industry, the Union
Government put in place a high
powered committee to draw up
the semiconductor policy and
fiscal concession package. Union
Cabinet approved the draft policy
in January 2007 followed by formal
release of policy in February,
paving the way for founding of an
all-new industry in India.
Announcing the release of the
semi conductor policy, Union
Minister for Communications and
IT, Dayanithi Maran said, "The red
carpet has been rolled out. Each
unit costs about US$ 3bn and we
can have two to three factories in
our country. " There are several
multinational companies who are
in talks with us.
International scenario
Semiconductor industry has
basically three types of players:
?? IDM (Integrated Device
Manufacturers) who manufacture
chips as well as sell them. For
example Intel, Samsung and AMD.
?? The fabless companies who
design and sell their chips but
outsource the manufacturing to
foundry companies. Example
Qualcom, Broadcom, nVidia.
?? The foundry companies who
manufacture the chips designed
and sold by others. For example,
TSMC and UMC.
The current trend shows IDMs
outsourcing new requirements to
foundries, rather than making
massive investments needed to
upgrade their Fabs.Majority of
semiconductor companies are
likely to go fabless, benefiting
independent foundries. They can
leverage their capacity better,
generating higher margins, faster
time-to-market, time-to-volume
and lower costs than IDM fabs. Asia
Pacific Region with 95 per cent of
world production monopolises
pure play foundry business. TSMC
(Taiwan Semiconductor
Manufacturing Company Ltd) is the
undisputed world leader with
almost 50 per cent of the world
market held by it, followed by, UMC
(United Microelectronics
Corporation, Taiwan), SMIC
(Semiconductor Manufacturing
International Corp, China) and
CSML (Chartered Semiconductor
Manufacturing Ltd, Singapore).
Obviously, it would be difficult
for new Indian foundries to break
the monopoly. They have to
depend largely on supplying to
local electronic equipment
manufacturers.With Indian
Electronic Manufacturing Industry
expected to reach $155 Billion in
sales by 2015, the foundries
can definitely expect to serve
local manufacturers.
.....CONTD
