Rural market is now the sweet spot for chipmakers

By Suman Ravikumar, SiliconIndia   |   Friday, 26 November 2010, 01:43 IST   |    8 Comments
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Rural market is now the sweet spot for chipmakers
Bangalore: After the semiconductor industry faced huge revenue decline in 2009, totaling $226 billion and 11.4 percent decline from 2008, firms started tapping emerging markets like India and China. After tapping big Indian companies, they're now eyeing smaller firms in small towns. With 128 million households, the rural population is nearly three times the urban and has a large consuming class with 41 per cent of India's middle-class and 58 percent of the total disposable income. Some of the companies who made a large difference in the rural market were Microsemi, AMD, New Swan Autocomp, Texas Instruments (TI) and NXP Semiconductor. Microsemi has contributed in field of portable medical electronic solutions as miniaturization of medical products like body scanners, portable blood glucose meter, a portable blood oxygen measuring equipment; portable ECG machines would help and improve the health sector of the rural area. Esam Elashmawi, Vice President of product development at Microsemi said "We concentrate on market sectors where other market players have never thought of, like the aerospace, military and rural market as these were the least hit sectors by the global economic crisis that occurred in 2008." Also Microsemi helps in manufacturing industry where certain things that have to be done manually can be replaced with a chip into the machine that makes labor work more advanced, automated and easier. Last year, AMD sold its graphical processors to diamond-cutters in Surat, which helped reduce both the 30-36 hours it takes and the Rs 40 it costs to cut and polish a diamond. The processors improved the efficiency of the computerized cutters, as well as the accuracy and finesse of cutting. This shows how deep the industry is concentrating on smaller firms which are insignificant to the society. In Mysore, Freescale engineers helped Hexmoto launch an upgraded version of its Inverter power inverter that is 50 per cent smaller in size and costs Rs 20,000 compared to Rs 26,000 that it did earlier. Freescale engineers in collaboration with Hexmoto made a solar energy-driven motor that irrigates the fields during the day and lights up the village streets at night. Engineers at NXP Semiconductor have developed a contact-less smart card solution, which will act as a villager's virtual bank, since most financial institutions often don't have a branch deep in the hinterland. Transactions will be facilitated by agents using phones with card readers. Seeking such similar opportunities, Microsemi, a leading provider of semiconductor technology has aimed at building its System-on-Chip (SOC), Flash technology 65nm embedded chip to advance its technology in the semiconductor industry.The company's chip will be built by its products division Actel Corporation which will feature a low power, intelligent mixed signal and system critical series of SOCs. The chip concentrates on smart, low power devices for advanced portable systems that conserve energy and is reliable. It does IP protection through tamper proof capabilities and enables design and deployment of security applications as well. From the above examples we can see that technology can bridge the gap between rich and the poor, the privileged and the not-so privileged by just changing the ways that a business can be done. As CK Prahlad said "Fortune always lies at the bottom of the pyramid."