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Semiconductor

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Semiconductors

March, 2012

Introduction

The growing sales figure for the consumer electronic goods, a flourishing telecom/ networking market and noteworthy growth in the use of portable/ wireless products are some of the significant trends observed in India at present and they are providing stimulus to the growth of the semiconductor design industry.

India has a well-developed semiconductor design industry, with 120 design units and is ranked second among the US, the UK, Germany, Sweden, China, Taiwan and Israel in terms of design revenues. Therefore, various global integrated device manufacturers (IDMs) have established their captive design centers in the country. The country's electronics market is growing fast and is expected to boost the demand for semiconductor components in the future.

Electronics is essential to technology infrastructure, and semiconductors are the main component of electronics products. Electronics sales in India, which totaled US$ 40.7 billion in 2009, will touch US$ 400 billion by 2020. At present, local manufacturing accounts for about 40 per cent of consumption and and it could increase to 80 per cent by 2020. Indeed, many global OEMs and EMS firms, including Samsung, LG, Nokia, Toyota, Hyundai, Flextronics, Jabil, Foxconn, Sanmina, Elcoteq and Celestica, have set up manufacturing facilities in India in recent years, according to ISA.

Sanjeev Keskar, Managing Director, Sales, PMC-Sierra India, notes: "A lot of the local demand for electronics in India is currently being catered to by imports. As the demand for electronics products grows, many global players, both original equipment manufacturers (OEMs) and electronics manufacturing services (EMS) firms will look at manufacturing within India itself. This will automatically lead to an increased market for semiconductors."

The key drivers for the semiconductor market in India include telecom infrastructure equipment, wireless handsets, notebooks and other IT and office automation products, set-top boxes and smart cards. Growth sectors including health care equipment, automotive, consumer goods and industrial goods—all of which increasingly use electronics—are also expected to boost semiconductor consumption in India.

India Semiconductor Association (ISA) is the premier trade body representing the Indian Electronic System Design along with Manufacturing ESDM industry released the ISA-DIT Study on semiconductor design, embedded software and services industry. The study was released by Mr Kapil Sibal, Minister of Communications & Information Technology at ELITEX 2011.

Key highlights of this report are:

  • The Indian semiconductor design industry, consisting of VLSI design, embedded software development and hardware/ board design is estimated at US$7.5 billion in 2010 and is expected to grow YoY at 17.3 per cent and reach US$ 10.2 billion by 2012
  • The top 10 global fabless companies and the top 25 semiconductor companies have operations in India
  • The increasing consumer electronic good sales, telecom/ networking market and growth in the use of portable/ wireless products globally, are driving the growth of the semiconductor design industry
  • The growth of technologies like LED screens, 3G, Wi-Max translates into increased demand for semiconductor design
  • Automobile electronics in passenger and industrial vehicles are increasingly getting "smarter" with on-board computer systems used to enhance safety and customer experience