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Sunday, April 02, 2006
The Semiconductor Industry in India
If this was post was a description of what is happening in the semiconductor industry in India related to fabs, this would be a very short post. In short, there is no fab presence in India ( a few gov't controlled 6" lines...but, that's it).

A few data points:

  • The economy in Inda i s currently made up of services (52% of GDP), Industry (27% of GDP), Agriculture (21% of GDP). Manufacturing, a subset of industrial, is 16% of the GPD.
  • The government of India has shown no signs of investing in semi fabs (although, India's first 200mm facility will open in Hyderabad in 2006).
  • Chip deign in India was a $650M business in 2004, with CAGR of 26%.
Given all of this, plus the engineering graduation rates in India, etc, I can't help but wonder why anyone in this country would ever want to invest in a fab. This would seem to be in direct conflict to the notion of Comparative Advantage.

The value in semiconductors is clearly in design (especially if you weigh value/profit vs. capital requirements).

Again, why does India need a fab?
posted by Rob @ 11:37 PM  
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