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 to a greater scale.
India has a well-developed semiconductor design industry, with 120 design units and is ranked the 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 for setting up 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 it could increase to 80 per cent by 2020. Indeed, many global original equipment manufacturers (OEMs) and electronic manufacturing services (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 India Semiconductor Association (ISA).
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’s electronic equipment consumption which was estimated at around US$ 28.2 billion in 2005 is expected to reach US$ 363 billion by 2015 growing at around compound annual growth rate (CAGR) of 30 per cent. Indian electronics equipment domestic production was US$ 10.99 billion in 2005 and projects an opportunity to touch US$ 155 billion in 2015.
The major end use segments are communications, information technology and consumer electronics. The vital product sub-categories that would drive the semiconductor market in India comprise mobile handsets, wireless equipment, set top boxes, smart card terminals and especially base transceiver station (BTS) equipment which is gaining impetus in the market steadily.
India’s total semiconductor consumption in 2005 was around US$ 2.8 billion and it is primarily met through imports. This demand is likely to exceed US$ 36 billion by the year 2015. Electronics –whether it is office automation, consumer electronics, medical electronics, telecommunications or industrial automation will require more of the semiconductor industry in India.
In India, after Bangalore, Noida has become a hub for semiconductor design industry with many major players setting up their offices and research and development (R&D) centres in the city. Global MNCs such as Freescale, Mentor Graphics and Interra Systems are some of the major semiconductor companies in Noida.
Some of the major investments in Indian semiconductor industry include: