Date: 02/06/2011

Who is the lucky semiconductor fab investor in India?

Compared to many areas of industry, one of the areas where India remained backward is in making semiconductor chips. The attempt to build a successful fab has failed so many times. Government is trying this time by forming a committee in finding investor and a solution.

India may need 500 million+ phones/ 3years - 5 years time frame (even if half of India's population uses mobile phone). A semiconductor fab can easily assume a market of 1 billion devices a year for all types of markets including wireless. A minimum revenue of anything more than US$ 1 Billion can be predicted for a semiconductor fab in India, provided it gets the priority from the Government and also the fab uses cutting edge technology such as <28nm process.

If the electronics industry as a whole is supported by Government similar to the way its done in Taiwan and Malaysia, the semiconductor fabs in India can expect a revenue of 10 billion US$ a year. This is our quick estimation. The numbers comes to the mind by the mere fact that India has a thriving middle class and also electronics technology is becoming essential for all sections of society.

What India needs is not just fabs with digital chip making capability. They should make reliable and rugged complex SoCs with analog, RF and MEMS on-board.

At the moment semiconductor fab investors are not eager to invest in India, but the smart risk taker this time will benefit immensely.