Fab or Famine: The Role of Global Politics, Technology Policy and the Political Economy of Development in the Unique Journey of India's Semiconductor Technology Industry

In the last half a century, semiconductor technology has played a disproportionate role in the rise of the U.S. as the sole global superpower. Semiconductors enabled the U.S. to establish economic and technological hegemony in military and consumer electronics. For a country with a large and diverse industrial base as India’s, semiconductors are vital to advancing economic and energy security. This research paper traces the history of semiconductor technology and industry in India since the 1960s to the present and chronicles the enduring quest for large-scale commercial fabrication of semiconductors starting in the 1980s. Though India lacks a commercial manufacturing base, it has continued to support manufacturing of semiconductors for strategic defense and space applications and has developed a vibrant domestic chip design software sector in the commercial realm. This paper examines the puzzle as to why despite a head start in research on semiconductors in the 1960s, production of semiconductor components in the 1970s and manufacturing of Integrated Circuits in the 1980s, the industry floundered over the next few decades, falling behind countries like China and Taiwan. The research shows that the Indian state was constrained by three major factors in implementing semiconductor technology policy: the political economic considerations that privileged development goals over capital intensive state directed technology investments with long gestation periods, policies driven by technology nationalism during the pre-liberation era and global technology control regimes that curtailed transfer of technology on terms favorable to the state. Despite a semiconductor manufacturing ‘handicap’, starting in the 1980s, the Indian state invested in manpower development for the growth of the software centric chip design industry. These investments driven by the State ultimately paved the way for the entry of more than 200 foreign multinationals into the semiconductor industry and the growth of a vibrant semiconductor software ecosystem that is now well integrated into the global semiconductor supply chain, spawning an epistemic community that traverses the globe.