Archive for June 17, 2010

Indian semicon market grows 15.6 percent in 2009, but don’t rejoice yet!

The ISA-F&S report 2009-11 India semiconductor market update.

The ISA-F&S India semicon market update 2009-11.

The India Semiconductor Association (ISA) today released the ISA-Frost & Sullivan India Semiconductor Market 2009-2011 update. It was released in New Delhi by Dr. M.M. Pallam Raju, Minister of State for Defense, Government of India.

Executive summary:
• India semiconductor market grew 15.6 percent in 2009 in contrast to the global market that shrunk by 11 percent from 2008.
• Wireless handsets, 3G networks, WiMax, notebooks, set-top-boxes and smart cards to primarily drive the semiconductor market in India.
• Telecom infrastructure development related domestic semiconductor consumption to grow by a massive 132.5 percent from 2009 to 2011.

Key findings:
• The Total Semiconductor Market (TM) revenues poised to grow from $5.39 billion in 2009 to $8.04 billion in 2011. The market is estimated to grow at a CAGR of 22.1 percent.
• The corresponding period is expected to witness a phenomenal CAGR of 34.8 percent in the Total Semiconductor Available Market (TAM). TAM revenue is anticipated to climb to $4.84 billion in 2011 from $2.66 in 2009.
• The rapid growth of manufacturing index of electronic products in the country is seen in the following segments- wireless handsets, telecommunications and IT & Office Automation (OA).

Poornima Shenoy, president, ISA said: “The semiconductor industry in India is growing at a CAGR of nearly 22 percent. This points to the rapidly growing domestic market which necessitates the need to have electronics as a national agenda. It can contribute substantially to the GDP in the years to come.”

While this growth looks phenomenal when compared to what has happened in the global semiconductor market during 2009, it is still too early to rejoice! It is well known that the size of the Indian semiconductor industry is not too large at the moment. So, any growth will be positive!

As per the report, the TM revenues for semiconductors in India during 2009 were $5.39 billion. End user segments of wireless handsets, communications and IT segments have played a key role in the expansion of overall semiconductor revenues in 2009. Mobile handsets, communication infrastructure and drive to extend IT are likely to be the growth drivers till 2011. Registering a CAGR of 22.2 percent, TM revenues for the Indian semiconductor industry are likely to touch $8.04 billion during this forecast period.

Electronics hardware manufacturing holds the key
The ISA-F&S report focuses on one key area — electronics hardware manufacturing – which holds the key to the Indian semiconductor industry’s growth.  Just a couple of days ago, nearly the entire Indian semiconductor industry was hotly debating on how to kick-start an electronics ecosystem!  Undoubtedly, the time for action is now!

That brings me to ESDM!

There has been a lot of talk about Electronics Systems Design and Manufacturing (ESDM) over the past six months or so. Instead of “easier to say, but difficult to manage”, the ESDM should reflect the message — “Electrifying start to dreams of many (in India)” with suitable action! The real test for ESDM starts now! A clear roadmap has to be in place to achieve the growth ahead.

Friends, I will try and review the entire report, time permitting!

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