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About India Semiconductor Association ISA ISA is the leading voice for the semiconductor-driven industry and has represented it since 2005. It has around 130 members from India and outside it; and aims to establish India as the preferred global destination for semiconductor, systems and solar photovoltaic companies. This includes chip design and embedded software companies, solar fabs and the related ecosystem. ISA has played a prominent role in working with the Government of India in the formation of the Indian Semiconductor Policy 2007. More information about ISA can be found at www.isaonline.org Mission
Vision Overview of activities This year ISA has initiated the ISA India Semiconductor Vision Document 2020. The Vision Document articulates its aim to assist in the growth of the fabless design sector in India to US$ 1 billion by 2020. There is a renewed focus on the Core Initiative Groups (CIGs) and the Special Interest Groups (SIGs). CIGs focus on market verticals to drive the business interests and growth of its members, especially start-ups and the Small and Medium Enterprises (SMEs). SIGs work on the long-term growth and development of the sector. ISA focuses on working with policy makers, creating networking platforms for industry interaction and showcase and publishing data of significance.
Focus: Activities on solar photovoltaic
ISA as a knowledge partner to the Government has released a comprehensive report on the sector done with support of National Manufacturing Competitiveness Council, Government of India. The first SolarCon 2009 was held in September 2008, with the primary purpose of information dissemination. The Conclave is a networking platform for experts, policy makers, strategists and consultants. Delegation visits have been both inward and outward: The former being the visit of the Solar Plaza delegation during the Vision Summit 2009. The latter are delegations to PV Japan and EUPVSEC Hamburg. ISA has credible relationships with key Ministries in both Government of India and State Governments. For instance with the Ministry of New & Renewable Energy MNRE at the Center; ISA has partnered with MNRE to organise Government-Industry interaction on the solar PV programmes of the Government of India. ISA is also supporting Department of Information & Technology DIT to close the semiconductor policy, which helped the Government to get the maximum flow of investments in the solar PV space, i.e. 15 proposals over Rs. 125000 crores. At the state level, ISA works closely with Andhra Pradesh Industrial Infrastructure Corporation APIIC of the Government of Andhra Pradesh. ISA is also on the board of Fab City, APIIC, Hyderabad - the largest manufacturing cluster for solar PV companies. ISA also assists APIIC in technical evaluation of the proposals received. The Indian semiconductor industry The Indian semiconductor industry today represents every aspect of the semiconductor lifecycle, from cutting-edge EDA and VLSI design companies to an evolving manufacturing eco-system. Semiconductor Market he semiconductor-driven industry has grown into a prominent player in the past couple of decades and has been a vital contributor to the nation’s economy. Mobile handsets, consumer electronics and telecommunications industries are instrumental in the ascent of the electronic industry revenues. This trend is helping to create an ecosystem which relies on the electronics industry’s growth. The emerging affordability of the middle class, favorable government policies, increased outsourcing and the establishment of Electronics Manufacturing Services (EMS) are anticipated to drive the manufacturing index (TAM:TM). According to ISA-Frost & Sullivan Report Update 2008-10, the Total Market (TM) revenue for semiconductors in India during the year 2008 was estimated at $5.9 billion. The Total Available Market (TAM) revenues were estimated at $2.27 billion in the year 2008. TM is estimated to reach $7.6 billion by the year 2010, while TAM revenues are projected to increase at a higher rate and grow to $2.92 billion by the year 2010. The earlier ISA-Frost & Sullivan semiconductor market update projected 2008 TM of $4.56 billion (CAGR of 26.7%) against the present $5.9 billion (CAGR of 13.4%). Despite this decline in the CAGR, India is still a growth story. Indian and global semiconductor market: Revenue forecasts comparison, 2007-10 (Values in USD billion)
Market Segmentation – key drivers The growth drivers for electronics manufacturing in India are IT & OA (Office Automation) and wireless handsets which together will account for almost three-fourths of both the semiconductor TAM and TM by 2010. The semiconductor products that are expected to drive the revenues are:
Definitions Total market(TM) for semiconductors: The total consumption of semiconductors in India, in any form (can be purchased locally, imported as part of Completely Knocked Down (CKD) or Semi Knocked Down (SKD), imported as a complete product), by any source (Sources are directly from semiconductor company offices in India, distributor sales, direct imports etc) and in either currency (US$ or Indian rupee). Total Available Market (TAM) for semiconductors: Consumption of semiconductors in India by virtue of manufacturing of end-user products in India + consumption through a local purchase order in India. Impact of low manufacturing index Electronics manufacturing within the country has not increased, though there have been policy changes and incentives. A combination of factors including international trading obligations, low focus on manufacturing and minimum support for the SME sector have led to challenges in achieving a rapid growth of semiconductor TAM revenues. The low manufacturing index, in turn, adversely impacts value addition, employment opportunities and revenue generation; and this for a country with a significantly large semiconductor market. Semiconductor Design The Indian chip design industry consists of VLSI design, board design and embedded software companies; both multinationals and domestic companies. The industry in India has been building its design capabilities for over two decades now. It has evolved from being a player in front-end logic implementation to an end-to-end design service provider. Design companies in India are transitioning into total design solutions, where they conceptualize design, define the architecture and do physical implementation. They are providing designs worldwide for wireless, automotive and consumer electronics. Not too long ago, they were only executing front-end design that was conceived elsewhere. Indian design services companies now provide product engineering solutions that span the entire product lifecycle across industry segments. It is only a matter time before the mindset changes from a services approach to product innovation. According to the ISA-IDC report 2008 on the Indian semiconductor and design industry:
The ISA-E&Y Report 2007 identified the India advantages:
In the years ahead, India will have to work hard to retain its advantages. India is the undisputed leader in embedded software, whether it’s quality or quantity. The world is continuing to move their chip designs to India due to the exceptional talent, program management and cost factor. Looking forward A joint effort from ISA and VLSI Society of India is working on a joint program towards 20 PhDs per year on pre-competitive research. ISA is looking at member companies to each support at least 1 new PhD starting each year for the next 5 years. This will get a pipeline of 100 PhDs in 5 years. The biggest benefit from sponsoring is that each sponsor company will get full royalty-free access to the IPs developed from all 100 PhDs. ISA believes that the future on the Indian semiconductor design companies will arise with the emergence of fabless design companies from India. These companies would be focusing on creating products for the Indian market. India can take the lead in electronic systems design and electronic product manufacturing. The absence of systems or a legacy creates for India, the unique opportunity to leapfrog technology. A step towards indigenous fabless design companies
Semiconductor manufacturing in India Currently the entire domestic demand for the semiconductor and electronic goods is met by imports. Local fabs in India would mean that local demand could be met by purchases from the local manufacturing units as locally manufactured chips are likely to have a comparative cost advantage. Fabs would cater not only to the domestic market, but the country would also be able to reach out to the global semiconductor market in specific product categories. The chances of a commercial fab being set up in the country appear slim, keeping in mind the amount of investment needed and the present economic scenario. Semiconductor Policy 2007 In 2007, the Government of India announced the Semiconductor Policy that offers a capital subsidy of 20% for manufacturing plants in SEZs and 25% for manufacturing plants outside SEZs. The subsidy is on the condition that the net present value of the investment is at least Rs 1,000 crore. So far, there have been 15 applications for setting up solar PV plants, which cumulatively could bring an investment of about Rs 125,000 crore (approximately US$ 25 billion). Indian solar PV industry According to the ISA-NMCC report 2008, presently, in India there are around 90 companies into solar PV, which comprise of 9 manufacturers of solar cells and 19 manufacturers of PV modules. Another 60 companies are engaged in the assembly and supply of solar PV systems. During FY07, nearly 45 MW of solar cells and 80 MW of SPV modules were produced in the country, of which over 60 MW of solar PV products were exported. The solar PV manufacturing base in India comprises of cell and module manufacturing, with the bulk of the value addition taking place outside the country. Additionally, the current scale of manufacturing in India is small in comparison to global standards. Hence, there are two issues to be addressed: scale and integration. With a global focusing on the renewable energy, in India solar is a favoured option. Once grid parity is reached, this industry will be on the growth trajectory. Till such time, India should look at decentralized distributed application for the marketing (applications, for eg, rural and remote villages, backup towers in rural areas, captive power generation, home lighting, street lighting etc) Market segments for solar Based on the market size and its attractiveness, four market segments appear to have the maximum potential in the coming years. These are:
Government of India incentives: Solar PV industry Government of India, through the Generation Based Incentives (GBIs), has given a fillip to the solar energy generation. Apart from these application based incentives and the Special Incentive Package Scheme SIPS policy providing for incentives for manufacturing, the Government of India has recently announced some initiatives, given as under:
The creation of the domestic market through these incentives and the policy initiatives being taken up by the National Solar Mission, will promote the domestic manufacturing industry. |
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