Many semiconductor companies now outsource part of their manufacturing to foundries in order to keep capital expenditures cheaper, as the cost of developing a semiconductor manufacturing plant has climbed dramatically.
According to estimates from the Semiconductor Industry Association, the cost of a state-of-the-art fabrication facility over a ten-year period has increased exponentially from less than $1 billion in 1997 to between $10 billion and $40 billion now.
The semiconductor firms, including Marvell, AMD, TSMC, and Nvidia, have outsourced anything from 20 percent to 100 percent of their manufacturing.
Although India has only recently dabbled in this field, international investments from businesses like Taiwan’s PSMC Semiconductor and the US-based Micron appear promising.
The two main challenges facing the Indian semiconductor ecosystem as it continues to grow are luring significant investment from foreign businesses and creating a venture capital environment that can support newly established Indian enterprises.
The government should keep focusing on improving skill development, infrastructure, appealing policies, and business-friendly regulations to make India a top choice for global corporations looking to diversify their portfolios and to help industry spread risks in the event of natural disasters like pandemics, earthquakes, or other macroeconomic difficulties.
