Be Innovative, Be Niche

Date:   Wednesday , December 31, 2008

I believe that semiconductor space has got tremendous opportunity for innovation. Some of the major factors influencing a general trend in the semiconductor today are firstly, hand held devices, Secondly, ever-increasing larger integration of the functions on a single chip, and thirdly, low power consumption for battery operated devices. Out of these, power consumption is a huge area of concern and hand held devices with lower power consumption are the hot trend. Besides, "power recycling" from the transistors within the chips is one of the prime research area today. And the trend of ever-increasing complexity of the devices will continue as hand held devices like mobiles are fast becoming multi functional devices.

Also, from being mere passive service provider and implementer, Indian companies are working jointly with customers as enabler and co-innovator for developing next generation products. Besides, the fortunes of the semiconductor industry are increasingly tied to consumer spending on electronic products. Consumer purchases now drive well over half of worldwide semiconductor sales.

Well, semiconductor industry is witnessing increased M&A worldwide and at the same time it has matured rapidly. This is bringing more economic pressures to reduce the design costs subsequently leading to more off-shoring business as we can see from ISA (Indian Semiconductor Association) forecast which is by the year 2009, the Indian semiconductor market growing at a CAGR of 26.7 percent is expected to be worth $5.49 billion and holding around 1.6percent share in the $338 billion global market.

However, given the state of global economy, consumers and corporate are slowing down on their spending resulting into less demand of semiconductor chips and electronic products. Hence, 2009 is going to be tough period as there is no particular sectors "which can be considered as hot" for semiconductor industry. Customers are revisiting their product roadmap resulting into delayed decisions. Entrepreneurs will have tough times with VCs scrutinizing the funding activity, by being choosy; many start-up companies are facing financial woes. Thus, entrepreneurs will be challenged to find niche markets, products and VC funding in the semiconductor space.

The author the CEO, einfochips. EInfochips is a product development company based in Ahmedabad, India and Sunnyvale that provides solutions for electronic products. A unique combination of Chip/ASIC, Embedded Systems and Software Product Development expertise is found at eInfochips Its team takes the complete ownership of execution and its success