Indian semicon industry to reach $94.2B by 2015

India needs to reduce reliance on imports, as the Indian electronic system design and manufacturing industry promises to deliver a growth of 9.9 percent per year.
Written by Swati Prasad, Contributor

The India Semiconductor Association (ISA), the trade body representing the Indian electronic system design and manufacturing (ESDM) and semiconductor industry, on Tuesday released the sixth ISA-Frost & Sullivan Report on the India ESDM Market 2011-2015.

The report indicates that the Indian ESDM industry is on a growth trajectory of 9.9 percent compound annual growth rate (CAGR), from US$64.6 billion in 2011 to a forecasted US$94.2 billion in 2015.

Speaking at the launch, ISA chairman Satya Gupta said: "Growth rate of 9.9 percent for the Indian ESDM industry is fantastic considering the tough global economic environment."

However, the industry continues to have heavy reliance on imports, with 65 percent of demand for electronics products being met by imports. In the absence of policy interventions, imports are likely to grow from US$28 billion in 2011 to US$42 billion in 2015.

"With growing market demand, world-class talent, and favorable government policies, it is the time for India to seize the opportunity of US$94.2 billion market through innovative domestic product development and value-added manufacturing--rather than relying on imports and low value-add screwdriver assembly," Gupta added.

ISA president PVG Menon said: "The next few years will be crucial for the growth and development of the industry. The ESDM industry must now focus on the number of areas where India can increase self-reliance, and both create and leverage intellectual property assets and the high design capability found in India to develop unique global products for and from India. Examples are areas like computing devices and smart electronics, aerospace and defense, and medical electronics."

Other key findings of the report are as follows:

  • High value-added manufacturing to decline to 6.7 percent in 2015, resulting in a cumulative opportunity loss of US$200 billion during 2011-15

  • Total semiconductor market grows from US$6.03 billion in 2011 to US$9.7 billion by 2015. Local demand and sourcing grows from US$2.9 billion in 2011 to US$3.6 billion in 2015, due to heavy reliance on imported electronic products

  • India will achieve 50 percent total domestic manufacturing by 2015, creating additional direct employment of 200,000.

The opportunities in the ESDM ecosystem would also bring to the fore the talent and know-how of small and midsize enterprises in India, which could play a crucial, supporting role to global companies, Indian public sector units, and Indian multinationals engaged in the design and manufacture of electronics.

The ISA is also working actively to encourage entrepreneurship and innovation in the ESDM sector in India, according to a statement issued by ISA.

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