Date: 14/01/2014

India ESDM 2014: Speed is the name of the game

The scale of opportunities for Indian Electronics System Design and Manufacturing (ESDM) is only growing irrespective of global economic uncertainties. The slow growth of global economy can only reduce the growth of Indian electronics consumption to very-little extent, because the mobile phone and many other electronic devices are becoming important irrespective of economic status of many buyers. In year 2013, as per our estimations from the feedbacks we received from large number of small and big companies selling electronics products in India, are estimated to be growing their revenues in the range of 10 to 15%, while their global market growth is slow/flat or down in 2013. There are few companies which have reported an excellent growth rate, one such company is embedded computer module supplier Advantech from Taiwan, which is even estimating hundred percent growth in revenues from the Indian region. This clearly indicates the forecast of the demand of electronic hardware in India to reach US$ 400 billion by 2020, is a realistic forecast.

If the Indian economy growth picks up to a level of 8% or more, there is no wonder the electronic hardware demand exceed more than US$ 400 billion by 2020. How much of this can be served by manufacturing locally is a big challenge.

Though timing is very right for the Indian companies to take up this opportunity, but the challenges are complex. Unlike services business, establishing successful manufacturing base takes time and is more risky. The good news is Union Government and many State Governments have laid down a set of policies supporting local design and manufacturing of components, semiconductor ICs as well as complete systems. Some of the policies are already implemented, and many more going to be implemented in the coming months and years.

The most important is the approval of the semiconductor fab facilities and are expected to produce chips in another 2 to 3 years.

Mr. Sanjeev Keskar, Chairman, IESA said, “As per the Government’s National Policy on Electronics we have a $100 billion investment target to meet by 2020."

It is time for the think-tank in the Government to not leave any stone unturned related to providing policy support to all aspects of electronics engineering both strategically and tactically. In this extremely dynamic situation, tuning and shaping the policies in real-time is important.

Based on the industry feedback and our observations, we estimate the total electronic hardware consumption in India for the years 2014-15 (two years combined) in the range of US$ 240 billion and the total semiconductor device consumption in India in years 2014-15 (two years combined) is roughly estimated to exceed US dollar 20-24 billion. The domestic share of electronics hardware manufacturing can also be roughly estimated in the range of US dollars 120 - 140 billion for the years 2014-15 (two years). These are little-optimistic and some what approximate estimations.

An important and relevant event for this industry is scheduled to happen on 3rd and 4th of February 2014 in Bangalore. The event named "IESA vision Summit 2014" is organised by India electronics and semiconductor Association, an industry body which is actively represented by both multinational electronics and semiconductor companies as well as domestic electronics and semiconductor companies. This is a perfect event to feel the pulse of Indian ESDM industry, where you can meet officers from the Government, senior executives from the domestic as well as multinational electronics and semiconductor companies.

Though devices such as mobile phones, televisions, desktop and notebook computers are the top sellers in the Indian market, India offers great market for every type of electronic systems, a growth potential far better than many part of the world.

One thing is clear, India may have missed the earlier bus of opportunity, but now this bigger opportunity is more important not to miss. In electronics, speed is the name of the game amid the highly dynamic market, and one has to run-fast to catch this bus of opportunity.
Author: Srinivasa Reddy N