The chips are certainly not down for the semi-conductor industry in India. Just last week, the Centre had announced its intention to set up two semiconductor manufacturing units in the country and now the industry's latest score-card provides more reasons to cheer.
Powered by a rapidly emerging tablets story and increased demand for 3G and smartphones, the Indian semi-conductor market has grown at a robust 28.3 per cent in 2010 to $6.55 billion (from $5.11 billion in 2009 and $5.9 billion in 2008).
Notebook penetration
Notebook penetration and flash card demand were the other drivers of growth. Global cyclical trends have had minimal impact on the Indian semiconductor industry, which is expected to grow at a CAGR of 22.7 per cent to $9.86 billion in 2011, according to report released by the Indian Semiconductor Association (ISA) in association with Frost & Sullivan.
The Indian market's contribution to the global semiconductor market is set to increase from 2.2 per cent in 2009 to 2.7 per cent by 2012.
The ISA - Frost & Sullivan India Semiconductor Market 2010-2012 report (the fourth update of the report) was released by Dr Ajay Kumar IAS, Joint Secretary, Department of Information Technology.
Mobile devices, telecommunication and IT products contributed to 82 per cent of the semiconductor total market in 2010, while automotive contributed 2.7 per cent and consumer electronics stood at 5.9 per cent. Though automotive contribution to total market revenues was small, it witnessed a growth of 31 per cent.
Among components used in products, the memory market leads the contribution to total revenues with 23 per cent.
The mobile devices total market, driven by 3G and smartphones, stood at $2074 million in 2010, at a growth of 25.6 per cent from 2009. It is poised to grow to $3274 million by 2012.
The telecommunications semiconductor market saw a CAGR of 24 per cent to $1245 million in 2010, driven by the National Broadband Plan and expanding telecom infrastructure; it is set to grow to $1915 million by 2012.
Notebooks and tablets have been a big booster to the IT products market at $2052 million at a CAGR of 20 per cent ($2958 million by 2012). While consumer electronics market saw rapid adoption of LCD TV, the automotive sector was spurred by digitisation of controls and incorporation of safety features.
Immense potential
Releasing the report, Dr Pradip K. Dutta, Chairman, ISA, said: “The semiconductor industry in India presents immense potential to contribute significantly to the country's growing economy. In addition, there are strategic reasons for a country of our size and GDP to develop domestic electronics manufacturing ecosystem. We need local manufacturing to reduce the import bill of electronic components and are quite optimistic about the government's efforts to encourage local manu- facturers.”