BANGALORE, INDIA: The fledgling Indian semiconductor industry has to invest in the research and development (R&D) of nanotechnology to face the challenge of disruptive technologies and shrinking innovative product cycles, a top expert said on Monday.

"Nanotechnology is the future of the electronics industry worldwide. With disruptive technologies and product cycles shrinking, the Indian semicon industry has to invest in nanotechnology R&D to innovate applications using nano materials and nano tubes," founder director-general of National Informatics Centre N. Seshagiri said here.

Delivering the inaugural address at the sixth Vision Summit of the Indian Semiconductor Association (ISA) here, Seshagiri told about 300 delegates that though India had become a dominant player in the global software arena with about $60 billion export revenue, it is a laggard in the electronics hardware industry despite resources and talent.

"It will be a blunder to ignore the innovations taking place in nanotechnology worldwide, especially in the US, Germany and Korea and application of nano materials and nano tubes in the manufacturing of electronics products for diverse applications, especially consumer goods, including mobiles, laptops and tablets, medical equipment, energy efficiency and security," the former special secretary to the IT department and Planning Commission said.

Noting that the sunrise nanotechnology sector was a $20 billion industry worldwide with about 1,000 nano-based products rolled out by 400 firms across 25 countries, the eminent technocrat said the market size for nanotech electronics was estimated to be $1.6 trillion over the next two years.

"The absence of a chip-making (fab) facility and sound electronics manufacturing base should not deter the Indian semicon and hardware industry from using nanotechnology in developing sub-systems and electronic devices, which will account for about 30 percent of the projected $30 billion industry in 2014," Seshagiri pointed out.

Referring to the huge investments being made by global chip maker Intel and IT major IBM in developing 40 nanometre and sub-25 nanometre flash memory, the former official said the cost of producing nano materials and nano tubes had to be reduced substantially through R&D and innovation so as to bring down the overall cost of end-products.

"Presently, it costs about $400,000 to produce a kilogram of nano tubes even in the US. As nanotechnology and miniaturisation of electronic products are going to be order of this decade, the Indian electronics hardware industry had to catch up with the rest of the world to be in race for a pie of the multi-billion dollar market," Seshagiri asserted.

Earlier, Union IT department Joint Secretary Ajay Kumar said demand for electronics hardware was projected to be a whopping $400 billion by 2020 from $45 billion in 2009 in the Indian sub continent, while the global demand is expected to be $2.4 trillion by the end of this decade.

"The Indian semicon industry has to move up the value chain from chip designing and embedded systems to fabrication, manufacturing and value addition to increase its share of the domestic market, which continues to be import dependent," Kumar added.