Indo-French electronics: From silicon to systems, contribution and collaboration

NOIDA, INDIA: The India electronics ecosystem is paradoxical. On one hand it is one of the worldwide R&D hubs for the design of ICs and embedded systems, thanks to more than 100k highly skilled engineers. It is also a large market from the demand perspective due to its growing middle class with a total electronics equipment consumption of around 70BUSD/2012.

Indan electronics market

Both R&D and consumption revenues grow yearly at a double digit rate. But the supply is still much smaller at around $20 billion, roughly balanced between the local brands and the multi-national companies (MNC). Consequently, the export level is also quite limited.

When analyzing the key electronics applications from a consumption stand point, India is ranked also among the top volume markets in term of volume with for instance more than 200 Mu mobile handsets, 40Mu Set-Top-Boxes, 400Mu lighting systems, 16Mu bikes and 4Mu cars in 2012-13.

The average semiconductors content is still small, as expected for an emerging economy, with less than $50/car and $10/handset or 1/5 of the WW average. But the consumers are pushing fast to get more sophisticated gadgets for instance with a fast conversion from feature phone to smart phone (now only 10 percent of the local market).

The local Indian electronics firms' ecosystem is rich of more than 1000 firms, most of them Small and Medium Enterprises (SMEs) with relatively limited financing and R&D capabilities. An increasing number of firms have a strong branding strength on the local market and in few cases all over South Asia. Bigger firms coming often from the IT background are providing the backbone of the R&D Hub. The macro-economic indicators of productivity, currency valuation or custom tariffs make also India a competitive alternative as manufacturing hub to address the global WW markets.

India-France co-operation

Such an ecosystem gives a lot of opportunities for collaboration between French and Indian actors either SMEs or MNCs. At R&D level, they can leverage the France expertizes in technologies, at marketing level sale in India products developed in France, and at manufacturing level benefit from the scale of the local high skills and high productivity man-power to produce for the local market and exports.

Academic collaborations have also been initiated between engineer schools and private firms to build-up a mutual understanding and progressively develop disruptive solutions, examples being in very cost sensitive challenges in the domains of energy or healthcare.

In a global context full of uncertainties, companies planning to invest in India have to keep in mind several retainers, focusing more on the long term growth than on short term gain. From a business perspective, India is a touch market with many competitors, low prices and often payment issues.

From a manufacturing stand point, access to land and clearances can delay projects and beside few clusters the infrastructures are not yet at a WW standard. And to run a local R&D hub, a company has to be ready to reassess in depth its project management processes.

French firms have been engaged successfully in the India electronics ecosystem for more than 20 years. They are present on several fronts: local operations (sales, development, manufacturing), partnerships with service providers, university collaborations, education and trainings.

And, they cover most verticals: energy, metering, security/smart card, automotive, defense, telecom, EMS and a large spectrum of the value chain from silicon to systems and solutions.

The recent announcement of GOI regarding the Semiconductors manufacturing project India Fab is a confirmation that the French technology is recognized among the best in the world.

A case study

Let us take the example of STMicroelectronics. It is a global semiconductor leader, ranked 8th world-wide and the largest European semiconductor company. It is present in India since 1987, started in Delhi with 4 employees and has grown to 2,300 employees in 2012. It supports the full semiconductor value chain with R&D (technologies/products/systems) and S&M (sales/support/supply chain/QA).

This development has been both broad and deep with for instance 400 patents currently in filing or granted. It is considered in India among the top three Captive Design Centers, top three Semiconductor Suppliers and four times among Best Employers.

Its large R&D hub develops system-on-chips (SoCs) for a large diversity of applications ie Set-Top-Box, Imaging camera, Automotive Power Train, Entertainment & Body. The local R&D team develops VLSI Library Platforms in leading edge silicon technologies, Embedded Software for numerous applications in Industrial, Multimedia, Consumer, etc.

The dedicated regional sales force is present all over the country together with Central Marketing, Application and QA Support bringing unparalleled product and system knowledge. The product portfolio and reference designs well suit Indian needs e.g. STB, Power and Lighting, Automotive, Microcontrollers -- both secure and general purpose.

At the same time, it has developed a network of education partnerships with India Universities such as joint labs, customized cursus and R&D projects. Many accolades have been awarded, such as Impressa Award for innovation by Indo Italian Chamber of Commerce and Industry, Most innovative company by DQ, First Semiconductor Design Company in India to achieve BS 7799 IT security certification by MIT and GOI, Impressa Award for bringing best European Practices in India by European Commission.

Challenges and opportunities

The challenges for the electronics ecosystem are now to support the increase of the demand, to raise the local manufacturing even faster than the demand, and to leverage the export attractiveness.

To do so, the Government Of India (GOI) has initiated recently a very comprehensive set of policies to encourage and support the local electronics ecosystem, involving both local and international partners. This broad strategy is addressing a large spectrum of policies: financial, academicals and strategic projects with relevant budgets. This policy is now one of the most attractive in the world to engage new investments in the area of electronics.

Projects have already been submitted for application for a Capex amount above $2 billion and several already awarded.

In this context, the France Embassy in India helps French and Indian companies and academia through different structures, for instance its economic intelligence structure and UbiFrance for SME. The Science & Technology team has also recently initiated a France/India R&D Club to set-up a collaborative platform, sharing best practices and learning how to work better together. It has been instrumental in the organization of this electronics roundtable.

The electronics round-table is to address this strategically critical electronics domain, with four objectives:

1. Best practices in electronics with examples in both private and academic fields.

2. Development of exchanges and networking between French and Indian private and academics.

3. To seek collaborative projects in the field of electronics in public-private mode.

4. Identification of tools and necessary enablers to develop Indo-French collaborations.

The French organizations present on this panel are from the industry and academia with a long experience of the India electronics environment. Those on the Indian side have also an international exposure that enables them to recommend best practices. The panelists are recognized leaders and experts of this industry. A report will consolidate the inputs and serve as reference for the follow-up.

Conclusion

India is among the very few countries in the world with the scale and the skills to be the worldwide growth engines of the decade.

The Indian electronics market is already among the three largest in Asia and among the top three worldwide volume markets e.g. for mobile handset. With such scale and skills, it is a very competitive platform not only to support the local demand, but also as hub for WW market and global R&D.

French electronic firms are present in India since many years. Those MNCs and SME complement naturally the local ecosystem, providing expertize, skills and resources across the full value chain and a large range of applications.

Events such as this forum help to raise a new dynamics and structures to deepen and enlarge the scope of our technological collaboration.

The author is director, Strategic Business Development, STMicroelectronics.