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Archive for May 29, 2011

Where is Indian semiconductor industry headed?


It has been a pretty disappointing year for me, so far, owing to one or another family related problems. I’ve only flattered, to deceive, as one would put it! Not that I’m out of my troubles, but am sure I can ‘play my game as usual’, hopefully, without any further disruptions.

First, I have been closely following the global semiconductor industry, despite my troubles, and there’s really nothing new worth reporting, at least, so far!  Hope the next month and the rest of the year are better! But first, my take on the Indian semiconductor industry, which has now started to disappoint! At least, yours truly!

Last July, I had done a post, where, Len Jelinek, director and chief analyst for semiconductor manufacturing at iSuppli, (now IHS iSuppli) had said to a question on the need for a foundry for the Indian semiconductor industry that: “If there is a foundry built in India, it will have to start at mature technology, which they will have to underprice just to get business. Financially, this makes no sense for any investor, except for the government, which can protect the foundry (their investment) through tariffs.”

It is going to be a year since the remark was made!

This February, at the ISA Vision Summit, one heard  a well known personality voice concern that the manufacturing sector suffers from a confidence deficit. A part of the software successes have been due to a brand developed. He said: “We have the advantage of a great brand, and need to make use of it in the electronics manufacturing sector. The government recognizes the need to convert Indian into a global destination.”

Where is the recognition to help create Indian into a global destination happening? Does it really take so long to develop a semicon policy in the first place? It is strange that perhaps, six and a half years since it was set up (Oct. 30, 2004), the ISA has still not found any takers for a fab in India!

Elsewhere, I mentioned that the latest ISA-Frost report on the status of the Indian semiconductor industry does not sound accurate! I don’t have anything personal against the Indian arms of MNCs, but why are they made even part of the report? I don’t recall seeing a similar report from China or Japan or Taiwan, that does a similar thing!

Where are the Indian semiconductor companies in the first place? One of India’s major semicon firms, the Srini Rajam-led Ittiam Systems, recorded a growth of Rs. 52 crore in 2010, while another significant ODM player, SFO Technologies from Kochi, Kerala, was said to be achieving Rs. 750-800 crore in 2010. What about the other Indian companies? To be accurate: what’s even happening with the Karnataka Semicon Policy? And, don’t some of the other Indian states deserve similar policies?

There are certain things that the Indian semicon industry needs to do, unless it wants to be written out of reckoning in the global context.
1) Focus on the needs of the Indian semicon companies only!
2) Prepare industry reports that highlight the capabilities of Indian semicon firms only; it does not matter how small those firms are! At least, we will have correct reports presenting the right picture.
3) I mentioned 10 points the Indian semicon industry needs to focus on in a post “Long wait for Indian semicon industry?” Perhaps, some, if not all, need to be paid attention to!

I am also told that the ISA president, Ms Poornima Shenoy is leaving, to start a new business. My best wishes to her for a successful career!

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