Key trends in semicon/electronics for 2009

Outlook 2009

Key semicon/electronics trends for 2009

Presenting a snapshot what could likely happen in the Indian and global electronics and semiconductor spaces in the coming year

Pradeep Chakraborty

Wednesday, December 10, 2008

BANGALORE, INDIA: A lot has been happening in the global electronics and semiconductor industries, respectively, and it is a tough call for any person, right now, to predict what's probably going to happen in the coming year.

It was a pleasure to speak with Rajeev Mehtani, vice president and managing director, NXP Semiconductors, India, and get his thoughts on the outlook for 2009.

We started off discussing the DTH success story in India, and how RFID could well end up playing a role in the scheme of things next year. Our conversation veered toward semiconductors, naturally, and about how soon (or late) would the industry see some recovery.

Presenting a snapshot of our discussion on trends in the Indian and global electronics and semiconductor spaces.

INDIA

1. The DTH story will continue to increase in India with companies such as Tata Sky, DISH TV, BIG TV, etc., gaining market share. Owing to these challenges, there would be significant consolidation among the cable operators. Digitalization will also be seen in 2009.

2. The slowdown will affect growth across all sectors. Our view is that LCD TVs as well as STBs will continue to grow.

3. The year 2009 will witness e-commerce revolution and the RFID sector will grow at a 40-50 percent clip. The government has been sponsoring a lot of projects, which include RFID in the metros, e-passport cards and national ID cards. By mid-2009, we can expect a mass deployment of these projects as well as micro payments.

4. Manufacturing in India will continue to grow; EMS or OEMs, like Samsung, Nokia, Flextronics, etc.

5. Another important trend that can be seen in 2009 is the move from services to products in electronics and semiconductor spaces. The number of funded startups has grown significantly over the last years and more and more ideas are coming on the table.

6. The solar/PV sector will grow in India. High entry cost of capital for panels will be a barrier for this sector. Government enhancement is necessary. India will be different than other countries as people won’t push energy back into the grid; it will be used more for household consumption. The India grid is unstable. Tracking it requires a lot of expensive electronic switching. Solar deployment could be at the micro level, and also community level, where it makes more sense.

7. The startups in India are mostly Web 2.0 based, although there aren't many hardware startups.

GLOBAL ELECTRONICS & SEMICONDUCTORS

1. The semiconductor industry is truly global, That is mostly because it is a very expensive industry.

2. Things are a bit murky in the semiconductor industry. It would probably be dipping 10-15 percent next year.

3. Globally, energy management and home automation will start to take off in 2009. Satellite broadcasters will also continue to gain more strength.

4. On a worldwide scale, 3G will win. You will have 3G phones, and you'd add LTE to those. India is slightly different. Only 20 percent of Indian households are ready for broadband access. In India, WiMAX could be a way to have wireless broadband at home.

5. Industries moving to 300mm fabs will be making up only 20-25pc of the market. Not many need 45nm or 40nm chips. People will question any major capex, until there's a big return and wait for recession to end. The bright spot is solar!

6. The fabless strategy would be the only way to go forward. While MNCs with fabless strategy are present in India, Indian startups in this space are quite few.

©CIOL Bureau