siliconindia

The Indian electronics industry- past, present and future

Author: Steve Sanghi
Chairman, President & CEO, Microchip Technology
The Indian electronics industry- past, present and future -By-Steve Sanghi
When I came to the U.S.A. in 1976, the American electronics industry was experiencing a rapid growth. The large companies of today, such as Microsoft, Intel, Dell, Apple, Cisco, and Google were either small companies or not yet formed.

During this era, there were four Asian tigers: Hong Kong, Korea, Taiwan, and Singapore. They were all considered third world countries. But, the economies of these countries were going through a fast paced growth. In the subsequent 25 years, each of these countries took advantage of the first wave of the electronics and semi-conductor outsourcing trend. They first focused on building semiconductor assembly and test plants and later fabrication centers. In addition, Taiwan built a PC infrastructure, Korea built a cellular-phone infrastructure, Singapore built a storage disk-drive infrastructure, and Hong Kong built a variety of subcontracting plants while positioning itself as the gateway to China. Today, these four countries are neither poor nor third world countries any more.

During most of this era, I watched India miss a series of opportunities on the international scene to establish itself as an outsourcing hub, and to rapidly grow its economy. It missed the semiconductor assembly and test plants, the fabs, the computer manufacturing, and then the cell-phone manufacturing. There were two main reasons. First, India went through a series of government and policy changes that sought to protect local companies and viewed foreign investments with suspicion. The second reason was that all of the earlier industries were hardware industries. India, with its traditional bureaucracy, had a difficult time providing the infrastructure and logistics support required to manufacture hardware efficiently. For example, it used to take days to clear an incoming or outgoing international shipment.

It was only in the early1990s that India shifted from its historical socialist bent to a free-market environment and as a result its economy began growing fast.

Then, the software and IT industries came. And this time, the chips were stacked in India’s favor. Software has no bureaucratic shipment hurdles, because you can ship it over the Internet. Aided by the significant policy changes from the government, the special focus of a few state Governments, and the world-class educational institutes like the IITs the traditional, hard-working Indian engineers swiftly grabbed the opportunity and turned India into the software and IT outsourcing capital of the world. Large outsourcing companies like Infosys and Wipro are common names in the U.S. Old Indian conglomerates like Tata and Larson & Toubro also formed divisions to grab a share of the IT work outsourced from the western nations. The industry grew further when American corporations began opening technology centers in India. Today, most American corporations - such as Microsoft, Intel, Dell, Cisco, TI, and Microchip Technology - have a significant presence in India.

One challenge westerners now have with India is high employee turnover. Indian engineers, especially in high-tech centers like Bangalore, change jobs rapidly. This slows down the formation of experienced, high performing teams, and has been an impediment blocking the continued and increased commitment of American corporations to India. Many are now building competitive technology centers in places like China, Romania, Hungary, and the Philippines.
While the IT industry is providing excellent opportunities to educated engineers, there is still more that needs to be done to employ the very large uneducated masses. This is where the hardware manufacturing industry comes in. India must find a way to attract the next wave of semiconductor fabs, assembly and test plants, and also computer, cell-phone and other consumer-electronics manufacturing plants. China is clearly the runaway leader in this arena. India has a lot to do to even get started - setting up a few export zones with good infrastructure and logistics support, lowering the import duties, and reducing bureaucratic hurdles and bribery would be good starting points.

I would close with two things that I tell my two children about their grades: ‘A very nice job, and there is room for improvement.’
Previous  article
Next article
 
Write your comment now

Email    Password: 
Don't have SiliconIndia account? Sign up    Forgot your password? Reset
  Cancel
Reader's comments(2)
1: From: Mrs. Mary David

This mail may be a surprise to you because you did not give me the permission to do so and neither do you know me but before I tell you about myself I want you to please forgive me for sending this mail without your permission. I am writing this letter in confidence believing that if it is the will of God for you to help me and my family, God almighty will bless and reward you abundantly. I need an honest and trust worthy person like you to entrust this huge transfer project unto.

My name is Mrs. Mary David, The Branch Manager of a Financial Institution. I am a Ghanaian married with 3 kids. I am writing to solicit your assistance in the transfer of US$7,500,000.00 Dollars. This fund is the excess of what my branch in which I am the manager made as profit last year (i.e. 2010 financial year). I have already submitted an annual report for that year to my head office in Accra-Ghana as I have watched with keen interest as they will never know of this excess. I have since, placed this amount of US$7,500,000.00 Dollars on an Escrow Coded account without a beneficiary (Anonymous) to avoid trace.

As an officer of the bank, I cannot be directly connected to this money thus I am impelled to request for your assistance to receive this money into your bank account on my behalf. I agree that 40% of this money will be for you as a foreign partner, in respect to the provision of a foreign account, and 60% would be for me. I do need to stress that there are practically no risk involved in this. It's going to be a bank-to-bank transfer. All I need from you is to stand as the original depositor of this fund so that the fund can be transferred to your account.

If you accept this offer, I will appreciate your timely response to me. This is why and only reason why I contacted you, I am willing to go into partnership investment with you owing to your wealth of experience, So please if you are interested to assist on this venture kindly contact me back for a brief discussion on how to proceed.

All correspondence must be via my private E-mail (dmary4love1@yahoo.fr) for obvious security reasons.

Best regards,
Mrs. Mary David.
Posted by: mary lovely david - Monday 26th, September 2011
2: tataosah@yahoo.com
Hello.
My Name is Tata I was impressed when i saw your profile at ww.siliconindia.com and will like you to email me back to my inbox so that i can send you my picture for you to know who i am.i belive we can establishe a long lasting relation ship with you.In addition,i will like you to reply me through my private e mail box (tataosah@yahoo.com).
This is because i dont know the possibilities of
remainning in forum for a long time.
Thanks,waiting to hear from you soonest.
Tata.
Posted by: tata tatababy os - Friday 30th, October 2009
More articles
The retail industry is witnessing an increased migration of customers ... -By-Kaushal Mehta
by Kaushal Mehta - Founder & CEO, Motif Inc..
The retail industry is witnessing an increased migration of customers from traditional brick and mortar retail to E-commerce (online retail)...more>>
Its 1 AM. Do You Know What Your Offshore Team Is Doing? -By-Samir Shah
by Samir Shah - CEO, Zephyr .
You probably do because you are on the phone with them! For all of you working in some technical management capacity here in Silicon Valley,...more>>
Disconnect: The Root Of All Execution Evils -By-Raj Karamchedu
by Raj Karamchedu - Chief Operating Officer, Legend Silicon .
These days are a mixed bag for me. Of late I have been considering "doing something bigger and better," in my life, perhaps seriously though...more>>
IT Services Rise Of Tier II Companies -By-Madhavi Vuppalapati
by Madhavi Vuppalapati - CEO of Prithvi Information Solutions .
IT Services Rise of Tier II companies The Indian IT outsourcing industry is going through very exciting phase in its business life...more>>
DLP, Prevention Is Better Than A Cure -By-Bhaskar Bakthavatsalu
by Bhaskar Bakthavatsalu- Country Manager, India and SAARC of Check Point Software Technologies.
Data loss occurs every day through corporate email. In fact, given the sheer number of emails an organization sends every day, data loss inc...more>>