The Indian semiconductor industry has been growing rapidly over the last three to five years. Several US-based chip companies have established captive design centers and there has been an evolution of the IP leveraged design services firms as well. Well-known IT services firms have also entered India by setting up separate practices for electronic design services.
‘Brand India’ is now well recognized in the international chip design services market, especially for its technical skills, domain knowledge and access to very large talent pool. Buoyed by these strengths, the sector is growing at almost twice the rate of application software segment. India currently has around 100 chip design and 150 embedded system players in the ecosystem, and more and more firms are eyeing this potential market. The National Association of Software and Service Companies (NASSCOM) estimates that this industry will grow to US $800 million in 2005.
However, these are early days and India’s share in the global market remains small. It is likely to touch US $800 million for ASIC services, while the embedded software segment is likely to reach US $1,500 million. Many companies offer reference designs like videophones, set-top boxes and audio/MP3 players, which are being licensed by large OEMs in telecom and CE spaces. Work done in India is an important constituent of the products being rolled out globally by technology companies.
Key products driving this growth are CE items like mobile handsets, communication equipment, including customer premise equipment, routers, hubs and switches, and power supplies. Automotive electronics is another emerging segment. Ramakrishna Dutt, managing director, Quasar Innvations, says that the Indian opportunity is also available in areas of electronics contract manufacturing, and analog, RF, semiconductor packaging and testing. ELCINA, the local body for electronics industries, has estimated that cell phones and set-top boxes have excellent growth potential, and India can look forward to 15-20 percent growth year-on-year for at least the next five years.
