How to build a successful semiconductor ecosystem in India
~~~~~~~
Creating a robust semiconductor industry requires long-term planning, heavy investment, and close coordination between government, industry, and academia. India can draw key lessons from Taiwan, South Korea, Israel, and Singapore.
1. Clear, Long-Term Policy
Stable incentives, multi-year subsidies, and regulatory clarity are essential. Taiwan aligned its government and industry goals over decades, while South Korea created national strategies that guided Samsung and Hynix.
2. Capital & Finance
Semiconductor fabs and cleanrooms demand billions in upfront investment. South Korea used its chaebol model for concentrated capital, while Taiwan spread risk through public-private partnerships. India needs similar large, staged funding mechanisms.
3. Skilled Talent Pipeline
Chips need thousands of trained engineers: design experts, process engineers, and equipment technicians. Israel built world-class universities linked to startups, and Taiwan created technical institutes aligned with fabs. India must scale vocational programs, internships, and industry-linked courses.
4. Clustered Supply Chains
Close proximity of suppliers, fabs, OSATs, and service providers reduces costs and speeds innovation. Taiwan’s Hsinchu model allowed one-day supply cycles; Korea built mega-clusters around Seoul. India must avoid scattered investments and instead build dense hubs.
5. Packaging & Test as a Stepping Stone
Advanced packaging and OSATs require less capital than fabs but create local demand and jobs. Singapore used packaging services to attract global clients. India is already moving in this direction with major packaging projects.
6. Materials & Equipment Ecosystem
Chips depend on chemicals, gases, quartzware, and metrology. Taiwan cultivated suppliers for every fab need, while Singapore became a service hub for global equipment players. India must nurture local suppliers and attract global partners.
7. Demand Creation
Investors commit when demand is guaranteed. Domestic procurement programs, local content rules, and strong export links can provide that. Countries like South Korea and Taiwan tied fab growth to consumer electronics and global exports.
Pitfalls to Avoid
• Treating semiconductors as a short-term project.
• Over-reliance on protectionism.
• Ignoring packaging, test, and suppliers while chasing only fabs.
• Training engineers without hands-on industry pathways.
Global lessons in one line:
• Taiwan: cluster + foundry model = global hub.
• South Korea: concentrated capital + national vision = rapid scaling.
• Israel: universities + startups + VC = fabless strength.
• Singapore: packaging + services + regulation = regional hub.
P.S: I am at semicon Taiwan. If you are around, lets catch up.