India semicon mkt to touch $5.5 bn in 2009

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India semicon mkt to touch $5.5 bn in 2009

India semi conductor industry to leverage on Solar/PV industry

CMN Bureau

Monday, February 18, 2008

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BANGALORE, INDIA: The Indian semiconductor market is expected to generate $5.49 billion in revenues in 2009, growing at a compound annual growth rate of 26.7 per cent, according to an ISA-Frost & Sullivan report.

The report for 2007-`08, released here today at the India Semiconductor Association (ISA) Summit 2008, said, the market in 2006 generated $2.69 billion total revenues in 2006, lesser than the estimated $3.8 billion in the previous report.

The report attributed the difference to the decline in various semiconductors average selling price in different end-user product categories.

Addressing the summit, Poornima Shenoy, president of ISA said, "With India's GDP growing consistently at nine per cent, investors are looking at our country. Collaboration and partnership is the way for ISA to grow."

The total available market revenue is estimated to reach $3.18 billion by 2009 from $1.26 billion generated in 2006.

Stanley Myers, president and CEO, Semiconductor Equipment and Materials International (SEMI), talking about the agreement with ISA, said that MoU would support and develop the semiconductor manufacturing infrastructure in India.

SEMI and ISA signed the agreement -- to support semiconductor related eco-system in India -- on Saturday.

Globally, Asia contributes 43 per cent of the Capex and Asia will become the hub of advanced chip manufacturing and this will be the trend, Myers said.

"India has huge opportunities in Solar/PV (photovoltaic) industry. Globally Solar/PV industry is at $13 billion and is estimated to grow to reach $40 billion in 2012. SEMI would fully support PV growth in India to reduce cost and increase efficiency," he added.

India needs to strengthen the relationship between design and manufacturing, which is critical to achieve effective fabrication. Currently, manufacturing based on Indian designs is being done overseas.

Talking about having the first 'made in India' chip, Jairam Ramesh, Union minister of state for commerce, said that the government of India has approved all the formalities and financials has to be closed. "We are in the process to start off."

Developments in Fab City

On the evolving domestic market, Ramesh said that there are private and public drivers for semiconductor market. The private drivers include telecom, PC and automobile market.

What is critical now for India is the public driver - energy, and Solar/PV will be part of the public driver and medical electronics, he said. "To achieve this, clearly the infrastructure is crucial, particularly in expertise and capability built."

Further talking about the developments in the Hyderabad Fab, he said that the government has already received seven confirmed investments in Fab city with a total value of $7 billion for 10 years.

Five companies are given principle approval with $1billion investment. And there are three more companies, Videocon, Moser Baer, Hindustan Semicon Manufacturing Corporation, whose proposals are yet to be considered.

Reliance has also put forward a proposal for Solar/PV manufacturing facility with an investment of $5 billion in Jamnanagar. This proposal is also under consideration, the minister said.

He informed that majority of the companies proposed to set up in Fab city are mainly focused on Solar/PV. The challenge is to develop affordable technology to increase the adoption of solar energy.

While delivering the keynote address, Wipro chairman Azim Premji stressed on 'innovation' being the key to organization growth.

He emphasized the significance on increasing the consumption, support infrastructure and to collaborate and co-innovates in the evolving eco system.

Responding to a query on when India will create a 'made in India iPod', Premji said, "We are still far away to reach that level."

One has to move up the product designing, build competencies and risk augmentation has to be addressed. Further, an organization cannot just confine to domestic market to be a success. In this competitive world, with base in India, one has to go global for its own advantage.

Ramesh chipped in and said, majority of the chip programming is done in India. What is needed now is to reflect all the research capacity into the 'made in India' product.

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