Abstract
Since the early 1980s major semiconductor companies have been successfully running back-end microchip manufacturing operations for Wafer Probing, Assembly and Final Test in various locations in developing countries in South-East Asia. This business model thrived under the cost-efficiencies made possible by low cost skilled labor and technical synergy with stakeholders running the front-end processes headquartered mostly in North America and the European Union.
At present nine of the fifteen countries exporting 97% of the global supply of microchips are Asian countries, contributing 82% of the US$720 billion global total exports in 2019. The economic impact of the semiconductor industry in developing countries like Malaysia, Vietnam, Thailand and the Philippines, to name a few, is undeniably phenomenal, as integrated circuits (ICs) have surpassed if not paralleled traditional exports like textile, garments, oil and raw materials in value. Inevitably, it also spawned multiple support industries needed to sustain local operations.
Such could be a key template for opportunities and growth in this sector for Sri Lanka, with similar ingredients that could tap Sri Lanka’s rich human capital.
Sitsabesan Muhunthan, P. Eng. (Canada)
CEO & Director at R & B Consultancies (Pvt) Ltd
