India Semiconductor Association (ISA)

The India ESDM Story

November 2012

Contents

India Semiconductor Association (ISA)

ESDM Industry Overview
Role of Innovation in Development and Importance of Made
in India Products
Skill Development and its Availability

Government Policies and Initiatives

Opportunity Segments

India Story
Large domestic market

560 million consumers in 20-49 age group expected by 2015

5th largest consumer market by 2025

Increased disposable incomes & changing lifestyles

Infrastructure initiatives

Infrastructure spend to be the biggest

thrust in coming years

Investment in infrastructure in past five

years doubled from 4% to 8% of GDP

US$ 1 trillion investment proposed for

2012-17

Human capital

Third largest pool of scientific & technical

manpower

Large English speaking population

Over 550 universities (20,000 colleges)

1,500 research institutions and 9K PhDs

Over 500K engineering graduates, and

upto 3 million graduates and post
graduates

India Semiconductor Association (ISA)

India Semiconductor Association (ISA)

Established in 2004
The voice of the electronics, semiconductor and embedded systems
industry in India
190+ members spanning across product companies, VLSI design
companies, embedded software houses, eco-system players, Venture
Capitalists etc.

51% are Indian companies, 23% are systems companies

40% in VLSI, 23% in Embedded. SW, 19% in HW Systems design, 16% in Semi IP

Headquartered out of Bangalore with an office in New Delhi

Full-time secretariat headed by National President, with an Executive
Council comprising of elected industry leaders

ISA Vision 2020

Vision
Make India a powerhouse in Semiconductors and Electronics
Goal
Facilitate ESDM industry to reach $400B target by 2020
Strategy
Knowledge Partnership with GoI: Stimulate growth of the ESDM
industry
Grow and Mentor: Talent, Innovation, Entrepreneurship
Build Brand India: Destination for ESDM
International Alliances: Bilateral business growth and sharing best
practices

ISA Vision 2020

ESDM Vision 2020

Segments

Policies
Incentives
Infrastructure

Innovation
Talent
Entrepreneurship

Thought Leadership
Brand Building

ISA Confidential May 2011

International
Alliances

ESDM Industry Overview

ESDM: A priority sector for India

Substantial Demand The demand for electronics in
India was $45 Bn in 2008-09 and
is expected to reach $400 Bn by
2020
Exponential Growth - Indias
electronics industry is expected to
grow at 22% per year

Current and forecasted Electronics Systems

Design & Manufacturing (ESDM) demand in
India , 2009-2020E
($ Bn)
+22%

$400 Bn

$125 Bn
$45 Bn

2009

2014E

2020E

The impetus behind the ESDM initiative

Projected demand-supply gap in
electronics industry (USD billion)
500
400
320
250
125
45
0

20

85

104

42

FY09
FY14
FY20
Total demand
Domestic production (target)
Domestic production (at current CAGR)

Production level
electronics industry
may reach with
favorable policy
environment
Gap between
current and
expected
domestic
production,
offering
significant
opportunities for
improvement
Production level electronics
industry will reach with current
policy environment

Source: Report of sub-committee of task force set up by DIT, Government of India, stimulating ESDM industry in India (Dec 2009)

10

Electronics: Integral part of our lives

Telecom

Industrial
Electronics

Atomic
Energy

Mobile

Automotive
Electronics

IT / OA

Consumer
Electronics

Medical
Electronics

Avionics

Solar
Photovoltaic

Electronic
Components
& other items

(Computers
peripherals)

Defence &
Strategic
Needs

Space

11

Major segments of ESDM demand in India by 2020E

Consumer
Electronics,
4%

Others, 2%

Telecom
Products
and
Equipment,
38%

Exports ,
20%

Semiconduc
tor Design ,
15%
IT Systems
and
Hardware,
14%

High-Tech
Manufacturi
ng, 6%
Electronic
Components
Manufacturi
, 1%
ng Services,
1%

Segment-Wise Demand
Telecom Products and
1 Equipment

$ Bn
152

2 Exports

80

3 Semiconductor Design

60

4 IT Systems and Hardware

56

5 High-Tech Manufacturing

24

6 Consumer Electronics

16

7 Others

8 Electronic Components

9 Manufacturing Services

4
12

Indian Electronics Market Forecast

Indian Semiconductor Market Forecasts
20

10
120

100

5.11
2.4

CAGR
TM: 21.8%
TAM: 21.7%

96.5

9.86

3.88

4.71

0
2009

81.1

80
65.1
60

6.55
3.14

8.25

2010
2011
2012
Total Market (USD billion)

53.4

51.1

43.8
40

29.4

36

20
0
2009
2010
Total Market (USD billion)

2011
2012
Total Available Market (USD billion)

Enormous potential to
grow domestic
manufacturing.
Represents huge
opportunity to partner
with Indian companies

13

Base Year: 2010, Source: ISA- Frost & Sullivan

Indian Semiconductor Market Forecast

India market
contribution
to Global
Semiconduct
or market to
increase from
2.2% in 2009
to 2.7% by
2012

12
9.86

10

8.25
8
6

6.55
5.11

4.71

3.88

3.14
2.4

2
0
2009
2010
Total Market (USD billion)

2011
2012
Total Available Market (USD billion)
Base Year: 2010, Source: ISA-Frost & Sullivan
14

Semiconductor Market Revenue Contributors

2010 TM Revenues: $6,550.25 million
Incredible demand for 3G and smart phones position
Mobile devices as the chief contributor toTM.

Rapid growth in emerging Tablets market, ever

evolving Flash Cards demand and continuing
penetration of Notebooks retain prominence of ITOA
segment to TM revenues.
Riding on the growth in the Indian automotive
industry, automotive sectors contribution to TM
revenues to witness maximum growth of 31%.

2010 TAM Revenues: $3,144.63 million

Addition of local manufacturing capacity through
investment by local vendors capacity ensures mobile
devices to remain the mainstay of TAM revenue
generation.
EMS contribution to telecom gear manufacturing
boosts TAM revenues.

Increase in manufacturing capacities to meet local

demand for consumer durables to propel TAM
revenues from consumer electronics
15

Skill Development and its Availability

Importance of skill development for ESDM industry

The industry is presently characterized by high level of imports and low
domestic content, which is beginning to change with the Governments
pro-active policy initiatives to encourage higher domestic value addition
in Electronic Systems Design & Manufacturing (ESDM).

These initiatives will create significant opportunities and requirements for

skilled personnel. As the electronics industry is technology intensive, the
workforce would need to be continuously trained.
Availability of large pool of skilled workforce is necessary to attract FDI.
Hence, skill development finds a very important place in growth of the
domestic ESDM industry and progress of the country.

Employment Opportunity in ESDM

Employment Opportunity in ESDM

Installed talent pool in Semiconductor

Industry, 2009-2012 (in 000s)

It is estimated that around 16.1 million

people will be directly employed in the
industry by 2014 and 27.8 million by 2020,
as compared to the current 4.4 million.

Fresh graduate supply in India

India has an abundance of skilled
manpower. Each year, around
three
million
science
and
engineering graduates are added
to the workforce, much higher
than in China and other developed
countries. The quality of Indian
graduates is also ranked better
than in China, Vietnam as well as
Japan and the US on certain
parameters.

Role of Electronics Sector Skills Council (ESSC)

ESSC will undertake pilot projects in the initial period of 1 year or so in the
functions/occupations like Production, Service Support, Semiconductor design /
R&D
Around 5000-6000 workforce will be imparted skills and certified during the pilot
phase
Steady growth planned in the number of persons to be imparted skills to reach
around 6.5 lakh persons yearly by 2020

On a cumulative basis, 2 million workforce proposed to be trained and certified

by 2020

28 trades proposed to be covered in the skill development plan

Government Policies and Initiatives

Govt. Procurement Projects

US$ 4 Bn

National Optical Fiber Network

Provide broadband connectivity to panchayats so that
banking and health services can be accessed online

US$ 1.2 Bn

National Knowledge Network

Infrastructure project to connect educational and research
institutes

US$ 4 Bn

National e-Governance Plan

Countrywide infrastructure reaching down to the remotest of
villages; bringing public services closer to home

US$ 0.2 Bn

LED products
Distribution of free LED lights to all BPL families ; Excise duty
reduction on LED lamps and LEDs

US$ 1.2 Bn

Set Top Box

Digital Addressable System (DAS) mandatory throughout
country by December14

ISA Confidential May 2011

21

Government Initiatives

Semiconductor Wafer Fab

Modified SIPS
Electronic Manufacturing
Clusters

Electronics Sector Skill

council
Study to identify major job
roles

Preferential Market Access

Creating
Ecosyste
m

HR
aspects

Building

Demand
R&D
initiative
s

Electronic Development Fund

Department of Electronics & Information Technology (DeitY)

Ministry of Communication & Information Technology, Government of India

ISA Confidential May 2011

22

Major Initiatives To Promote ESDM Sector

1. Setting up two Semiconductor Wafer Fabs for manufacture of Chips

2. Introducing Modified Special Incentive Package Scheme to encourage
manufacture of high priority electronic products in India by providing
capital grant
3. Provide incentives for setting up of Electronics Manufacturing Clusters.
4. Providing Preferential Market Access to domestically manufactured
electronics products for government procurement and procurement by
government licensees.
5. Setting up of Electronic Development Fund for promotion of innovation,
R&D, Indian IPR and development of Indian Microprocessor.

6. Setting up of the National Electronics Mission (NEM)

ISA Confidential May 2011

23

Opportunity Segments

The opportunity to leapfrog

Horizontal vs Vertical Manufacturing Strategies

India-specific products

High-value add products with IPR held in India, as well as manufacturing in India

Innovation Led Design .. Design Led Manufacturing

Industry vertical
Access

Present state

Future potential

No connectivity

Wireless

Electromechanical meters

Smart meters (AMI)

Incandescent lighting

LEDs

Energy shortage

Green energy/energy efficiency

Healthcare

Accessibility and cost of healthcare

Affordable devices/ Telemedicine

Education

Limited education

Digital /Virtual classrooms

Digitization

Analog to digital

Electronic society/Unique ID/Digital TV,

Radio

Security

Human dependence

Integrated surveillance systems

Others ,e.g., automotive

High cost, High emission cars

Low cost, Zero emission cars

Energy

ISA Confidential May 2011

25

Major Indian Industries

IT export touching US$ 70 Bil in 2011-12

Preferred space for Venture Capital Investment

Information &
Technology Sector

Emergence as major automobile component Hub

Production of 18 Mil. Automotive vehicles in 2010-11

Automobile
Component Sector

Pharma exports touching US$ 12 Bil in 2011-12

One of the top 5 bulk drug producers in the world

Electronics exports touching US$ 9 Bil in 2011-12

Government initiatives to make India Manufacturing
Hub in Electronics

ISA Confidential May 2011

Pharmaceuticals
Sector
Electronics Sector
(Second Sunrise)

26

Opportunity in Strategic Electronics

Defense electronics production likely to reach Rs.15,000 crores this year.
Value of electronics set to rise faster than the total value of strategic
equipment.
Defence budget for 2012-13 set at Rs. 1.93 lakh crore.
Expected to provide mfg and biz opportunities of Rs.40,000 crores over the
next 5 years
The Offset opportunity estimated at USD 10-15 Billion over the next 4-7 years.
India is currently among the top 10 spenders worldwide with its defence
expenditure growth at about 9.3%.

ISA Confidential May 2011

27

For More information

www.isaonline.org
support@isaonline.org
president@isaonline.org