Thursday, July 18, 2013: The Indian Electronics and Semiconductor industry on Wednesday urged the government to set up embedded technology parks across the country to strengthen the value chain and spur growth.
Considering the huge potential for embedded systems in domestic and international markets, the government should set up embedded technology parks to build an ecosystem that will add value and reduce imports,” Indian Electronics & Semiconductor Association (IESA) chairman Sanjeev Keskar said at an industry conference in Bangalore.
As 65 percent of domestic consumption of components and electronic goods depends on imports and even the remaining 35 percent of domestic production comprises a meagre 9 percent for product design, components, integrated circuits and printed control boards; the potential to indigenise their production is immense and all-pervasive, from chip design to embedded software systems and manufacturing.
Even in the 35 percent of domestic production, we need to increase the share of product design, components, integrated circuits and printed control boards to double the high value portion from nine percent currently,” said Kesker in a keynote address at the Embedded Software Conference (ESC 2013), organised by UBM India, an event management firm.
Embedded technology parks will help build clusters and provide one-stop solution to stakeholders in the value chain and increase domestic production to 50 percent over the next few years,” Keskar told about 500 delegates participating in the seventh edition of the three-day tech summit.
The emerging ESDM industry comprises electronic products, components, semiconductor design services and electronic manufacturing services.
While a lot of impetus has been thrust upon manufacturing sector in electronics in recent years through both government and industry initiatives, the potential in design has remained largely untapped in terms of domestic share. On the contrary, India’s competitors like Taiwan, China and Korea has stood hugely benefited through India’s design capabilities.
Of the $45-billion worth of electronic goods imported in 2010, India’s contribution by way of design accounted for a mere $2 billion, while $20 billion worth of chips manufactured in Taiwan, China and Korea are based on chip design work done in India that go into finished electronic goods valued at $60 billion.
According to ESC-India director S. Anees Ahmed, the industry’s long-term game plan is to reduce the demand-supply gap and increasing import substitution to capitalise on the growing market potential.
Our strengths in design and development have attracted global majors like Samsung, LG, Sony and Intel to set up their research and development (R&D) centres to work on innovative products and solutions. The industry needs to move up the value chain to manufacture and market the products for domestic and global markets,” Ahmed said.
According to a recent study by Frost & Sullivan for IESA, local electronics consumption is projected to touch a whopping $400 billion by 2020, with chips accounting for $50-60 billion from $10 billion in 2012.
The Indian Electronics Systems Design and Manufacturing (ESDM) industry is expected to grow to $94 billion at a compound annual growth rate (CAGR) of 9.9 percent by 2015 from $68 billion in 2012.