Finshots Daily Can India become the world’s BPO for semiconductors?
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Aug 18, 2025 Explore India's strategic opportunity in the semiconductor industry, focusing on chip packaging and testing rather than expensive fabrication facilities. Learn about India's strengths in this sector and the significance of the OSAT (Outsourced Semiconductor Assembly and Test) market. The discussion also tackles the challenges in competing with established global leaders, hinting at how India could carve a niche in the fast-evolving world of semiconductors.
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Semiconductor Value Chain Has Three Acts
- Semiconductor production has three stages: design, manufacturing (fabs), and OSAT (assembly & testing).
- The podcast argues that manufacturing gets headlines but the broader process includes many complex steps beyond fabs.
Fabs Deliver Sticky Economic Value But Are Hard
- Fabs are capital-intensive, take years to build, and lock in huge local economic benefits once operational.
- Newcomers like India face steep learning curves in technology, talent and ecosystem despite subsidies.
India’s Strengths Match OSAT Needs
- India’s comparative advantages (talent, low-cost labour, handset and auto supply chains) map neatly to OSAT needs.
- The country can scale packaging and testing faster than fabs because these require less ultra-pure water and fewer specialised utilities.