Economic and educational perspective on outsourcing/offshoring microelectronics in india

Unlike outsourcing of information technology (IT) in India, there is limited literature on outsourcing of microelectronics. This paper attempts to fill the void by providing a background of microelectronics and analysis of outsourcing/offshoring to India, followed by the current status and future trend possibility with the focus on India. After presenting the current status of contributions by India to the microelectronic industry, the macro-economic perspective to the outsourcing and offshoring of the industry for India´s potential to play a role as a major design and development center is demonstrated. The reasons for selecting India as an offshore choice are elaborated. Based on the comparison with the success of Asian countries, this paper argues that India´s failure in early 2000 in competing in the fabrication arena was because the educational system was not tailored to the industry´s fabrication needs. The conceptual paper discusses India´s potential to become a competitive design center in this decade and highlights that the decision making criteria to outsource is based on the enhanced ability to focus on the core-competencies of the outsourcing firm. The legal and political issues are out of scope of this study. Broadly, the paper can be divided into following 3 sections: introduction to microelectronics, analysis of offshoring/outsourcing to India, and the overcoming of past shortcomings by India for future trends.