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Semiconductor 's New Land of Opportunities
Imran Shahnawaz
Wednesday, March 1, 2006
Last month, the captains of global semiconductor industry marked their presence in Bangalore, India, to analyze the emerging market opportunities in the Indian semiconductor industry. Over 100 domestic startups and multinational semiconductor companies present at the summit organized by the Indian Semiconductor Association (ISA) were enthralled by the opportunity India offers and what they could grab from the Indian market.

India’s electronics market, which stands at $10 billion, is expected to touch $200 billion by 2015. What’s even more interesting is the growth rate—at a compounded annual growth rate of 24 percent, India is one of the fastest growing electronics market in the world. Much of the growth will be fueled by the semiconductor industry. And that excites the global semiconductor giants. Probably that may be the reason behind ST Microelectronics, corporate vice-president, Francois Guibert’s optimistic comment, “Semiconductor companies will come naturally once the electronic industries arrive.”

Like Guibert, everyone is bullish with the performance of the industry and sketched a bigger picture to make India as the next semiconductor powerhouse. ISA’s chairman and managing director of Broadcom Inc, Rajendra Kumar Khare says, “We want to project India as the preferred global hub for excellence in semiconductor product creation through technology leadership.”

As salaries rise in India, people have started buying high-end products like LCD and Plasma TVs, feature rich mobile phones, laptops, and other consumer electronic products that hitherto were imported. The consumption of consumer electronics in India would touch a whopping $363 billion by 2015. The semiconductor content in these consumer goods would be significant.

Since it is the customers who decide the success or failure of a product, so it should be designed in a customer centric way, feels Texas Instrument India (P) Ltd’s managing director, Biswadip (Bobby) Mitra. Everyone wants to cash in on this opportunity. For instance, electronic manufacturing service providers such as Ericsson, Elcoteq, Flextronics and Nokia have set up shops in India, creating the necessary ecosystem for component manufacturers to start operations.

Not a likely situation some years back. The semiconductor companies who marked their early presence in India worked in a step-by-step manner to develop the semiconductor ecosystem in the country. “ Today, the ecosystem has become conducive for multinational companies to come in. It is not just to leverage the potential talent but the market itself.”

However, there is a dearth of talent, which the industry has to overcome. And academia must ensure the curriculum is world class and cutting edge, says Patil. In the next nine years, semiconductor and embedded design sector would generate an employment opportunity of close to 800,000. “The opportunity is so big that it cannot be ignored. If we ignore, we will lose,” says Mitra.

Concurs Poornima Shenoy, president of ISA. “In a few years, China and Taiwan will corner 80 percent of the global chip market. India will be nowhere in the scene if we don’t act now.”

Just as the two-day summit drew to a close, India’s IT minister, Dayanidhi Maran announced India’s maiden semiconductor fabrication plant in the private sector to be set up by SemIndia at a cost of $3 billion. News such as these underlines the fact that Indian semiconductor landscape is poised to undergo a dramatic change.
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