ISA is the trade body representing the Indian semiconductor driven industry. ISA has around 130 members from the semiconductor driven industry from India and outside. These include both chip design and embedded software design houses, manufacturing companies, EDA companies and others in the ecosystem like venture funds, academic institutions, legal and IP firms.

ISA aims to establish India as the preferred global semiconductor destination. It is committed towards building global awareness for the Indian semiconductor driven industry and supporting its growth through focused activities. ISA works with trade bodies internationally to promote India as the destination for semiconductors.

ISA has played a prominent role in supporting the Government of India in the Semiconductor Policy, which will foster the development of the sector with a major impact on the economy.

ISA’s vision is to establish India as the preferred global hub for excellence in creation of semiconductor products through technology leadership.

The primary objective of ISA is to act as a catalyst for the growth of the semiconductor industry in India. Other objectives include:

• Create global awareness for Indian semiconductor industry outside of the generic "IT" umbrella
• Create win - win interaction amongst semiconductor product and services companies, government, academia, venture capitalists and industry bodies
• Create an enabling ecosystem that catalyzes industry’s growth and leadership Enhance operational efficiency
• Foster active collaboration between industry and universities to further expand the available world - class semiconductor talent pool
• Identification of investment opportunities
• Drive technology vision for the semiconductor industry
• Promotion of trade and industry

Any organization, firm, society, company or division thereof and involved in the activity of business or research in the area of semiconductors, allied areas or associated services, is eligible for membership.

The factors that are considered most important for granting membership with ISA are:

• Credible management team,
• Track record in business operations
• Robust financial commitmen
• Local content in the products and services

A minimum of five working days are needed to process your application. ISA may call upon the applicant to furnish additional information if needed. ISA can reject a membership application without assigning any reason thereof.

Membership comprises of two categories: Registered Member and Associate Members.

Semiconductor technology companies registered in India, with annual revenue of Rs. 1 million/ USD 25,000 and above. These include:

Associate members include semiconductor ecosystem players, universities and early stage startups of less than 2 years operational span.

Ecosystem players include the following:

International companies which plans to be in India.

The India Semiconductor Association (ISA) is the premier association representing India based semiconductor companies. Through our national and international network of CEOs and working committees, the ISA shapes public policy and provides a spectrum of services to help members grow their business.

The ISA provides the forum for its members to raise issues that are critical to the success of their business and to work together as an industry to ensure that those challenges are addressed. The greatest benefit to membership is the opportunity to influence and support the ISA’s agenda, and in turn to reap the rewards of the association’s many successes.

The ISA provides an array of member services such as:

• Increase the size and quality of talent pool
• Through a nation wide University program that will help build “relevant” skill base.
• Leverage the local semiconductor supply chain to improve operational efficiency
• Improved ‘regulatory’ support
• Develop business relationships
• Collaboration
• Identification of investment opportunities
• Reach to government, media and industry
• Leverage the networking of the association
• Joint representation to the government agencies
• Removing barriers to movement of goods
• Reduce entry barrier to start up companies

ISA's objective is to help India realize its true potential as one of the world's emerging semiconductor driven powers in terms of design and manufacturing and product development.

ISA works on initiatives that continuously evolve to achieve this objective.

• Brand Build brand for the Indian semiconductor industry and create global awareness about the Indian semiconductor industry through market research reports, surveys, international delegations, and events.
• Talent Meet the need for human capital and sustained R&D efforts through collaborations with universities and academic institutions. ISA aims to bridge the gap between industry and academia.
• Government ISA interfaces with the government to create an ecosystem for the Indian semiconductor industry through policies.
• Ecosystem As the industry evolves several new ecosystem, payers will start playing important role. This industry is to aid the growth of these collaborators and partners

The 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 buoyant economy. In the years to come, its impact is expected to increase manifold. An immediate influencing factor is the boom in the electronics market that is pushing the demand for next-generation chip design and manufacturing.

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.

Undoubtedly, the electronics and semiconductor revolution is the next big thing to happen in the country after the information technology revolution.

According to ISA-F&S Report Update 2007/08, the Total Market (TM) revenue for semiconductors in India during the year 2006 was estimated at $2.69 billion. The Total Available Market (TAM) revenues were estimated at around 50% of the TM revenues at $1.26 billion in the year 2006. TM is estimated to double in revenues to $5.5 billion by the year 2009, while TAM revenues are projected to increase at a higher rate and grow by 2.5 times to $3.18 billion by the year 2009, thereby signifying an increasing manufacturing index for different electronics products.

Indian and global semiconductor market: Revenue forecasts comparison, 2006-09 (Values in USD billion)

Year	India	Global	Percentage of India’s revenues to global revenues
2006	2.7	247.7	1.1
2007	3.5	274.9	1.3
2008	4.4	310. 7	1.4
2009	5.5	338. 6	1.6

Source: ISAFrost Sullivan 2007/08

India is expected to have a very strong electronics scenario by 2010. The installed base of mobile phones is estimated to touch 500 million while the no. for PCs will move up to 65 million. There will likely be about 40 million new Internet connections, with at least 50 percent of those being broadband connections. The nationwide TV broadcast is likely to become digital by 2015, beginning 2010. In that scenario, there would be significant opportunity for set-top boxes (STBs) consumption and manufacturing.

The growth drivers for electronics manufacturing in India are Telecom and IT & OA (Office Automation) segments, which together will account for almost two-thirds of the semiconductor TAM by 2009. Telecom's share has been estimated to grow from 21 % in 2006 to 41% by 2009.

The semiconductor products that are expected to drive the revenues are :

• Microprocessor driven by desktops, notebooks and telecom equipment;
• Analog driven by mobile phone, monitors and UPS;
• Memory driven by desktops, notebooks, servers and telecom infrastructure;
• Discrete driven by TV and audio systems, energy meters and converters, mobile and telecom infrastructure.

Semiconductor Design – scaling heights

India is aligning itself with the global semiconductor market by creating high value work in VLSI, and board design and embedded software. Companies with domain expertise are driving Indian businesses. India has become the world’s destination for semiconductor design and embedded software, and is increasingly becoming the source as well. Indian companies are taking up more and more complex designs, both, in analog and digital design. Besides, a no. of Indian companies are developing software for semiconductor-related products that are being designed by the overseas semiconductor companies.

In terms of the growth plans, all leading MNCs are planning to grow significantly from their India centers. They are strongly building partnerships with Indian designers.

The industry turnover is estimated at USD 6.5 billion at present, with an engineering workforce of around 140,235. It is estimated to reach USD 43 billion by the year 2015 and provide jobs to 780,000 engineers.

India’s chip manufacturing has been restricted to captive centers for defense and aerospace to date. However, the announcement of the Semiconductor Policy 2007 is expected to see the opening of doors to global investors in both chip manufacturing and its ecosystem and related hi-tech manufacturing.

The Government of India has taken a bold step in announcing the Policy. It is the first time recognition of this important sector and also the first Policy in the IT related industry in over a decade. It seeks to establish India as an attractive destination to global investors. The Policy has financial subsidies and it is necessary that a due diligence take place before these benefits are sanctioned. The appointment of the Appraisal Committee and setting up of guidelines to evaluate investments are key for the long term effectiveness of the Policy and to build the sector.

There is a special incentive package to attract investments for setting up semiconductor fabrication and other micro and nanotechnology manufacturing industries.

The incentives will be for the manufacturer of all semiconductors, displays including Liquid Crystal Displays (LCDs), Organic Light Emitting Diodes (OLEDs), Plasma Display Panels (PDPs) and any other emerging displays, storage devices, solar cells, photo voltaics, other advanced micro and nanotechnology products, and assembly and test.

A key benefit is the grant of the SEZ status. This way the government has provided both pre-operative and post-operative benefits to the industry, which is important for the development of the eco-system, too.

The Government has provided two options for a project. Units would ideally choose the SEZ option, as the eco-system for chip manufacturing can be developed chiefly with a SEZ status to the developer of the eco-system too.

Type of unit	Threshold NPV of investments	Incentive in SEZ	Incentive in NonSEZ
Fab unit	INR 2500 crore	20 %	25 % exemption from CVD
Ecosystem unit	INR 1000 crore	20 %	25% exemption from CVD

Note: (Incentive in of capital expenditure); CVD is Countervailing Duty

India is now presenting a great opportunity to the world. India has a very rapidly growing domestic market. The demand for electronic goods in India is expected to quadruple in the next five years. While in the western world, many markets have reached a state of maturity, India offers immense opportunities for growth, and here are some interesting statistics: For the next few years, cell phone sales will grow at a breakneck pace of approximately 40%per annum and set top boxes (STBs) at 43 %.

India is also an attractive destination for manufacturing investments. It has a fast and upcoming modern infrastructure – SEZs. We are already seeing a lot of investment flowing into India from multinationals to set up manufacturing facilities.

The country also boasts of skilled employee base. Talent is a key differentiator and a focus area to facilitate sustainable growth. Thanks to its talent pool, India has achieved global recognition for back-end services - having become a proven case for IP, embedded systems and IC designs.

ISA Frost Sullivan 2007/08: India Semiconductor Market Update

The comprehensive report on the India semiconductor market is the second such exercise after the successful association that ISA forged with Frost Sullivan in 2005. The previous report contained the firstever comprehensive analysis of the India semiconductor market. The coverage included the complete semiconductor ecosystem from chip and hardware design to embedded software to consumption of semiconductors. This report seeks to offer deeper insight into the market for semiconductors in India with market estimation of the underlying opportunities.

Apart from all the semiconductor product categories, this research exercise explores the market according to different application segments. The application segments covered in this report are:

• Telecommunications
• IT OA
• Consumer electronics
• Industrial electronics
• Automotive electronics
• Defence, aerospace, PoS and smart cards

It includes the top three companies in each of the user segments/verticals and nine product categories. The report will be updated each year till 2015. The 2007 report includes ‘India market details’ of the previous year, the current year and the succeeding two years. Report is available as document with CD version.

• ISA EYI Benchmarking Study:

India Semiconductor Association conducted this study with the leading international consulting firm Ernst Young India. It aims to benchmark the semiconductor design sector in India with its peer countries on factors of importance to the sector, identify high level focus areas and actions to facilitate sustainable growth based on the perceptions of industry leaders. Peer countries considered (in alphabetical order) are Canada, China, Czech Republic, India, Israel, Taiwan, UK and the USA. Report is available as document with CD version. 13

The market research reports by Frost and Sullivan, are the first comprehensive analyses of the Indian semiconductor industry with extensive field research and validated by industry experts. These studies document the complete semiconductor ecosystem from chip design and hardware design to embedded software development plus consumption of semiconductors in India. In addition these studies highlight the projected manpower requirements for various activities in the ecosystem and the impact of the semiconductor industry on the Indian economy.

The reports are useful to global and domestic companies to understand the structure of the industry, its impact on the domestic economy in terms of contribution to Gross Domestic Product GDP, employment generated and analysis of the markets for the various product categories and application segments.

To summarize, the reports are the first validated data sources on market trends and statistics of the Indian semiconductor industry.

This study was facilitated thanks to the support of Citigroup Global Markets right from its inception.

This report focuses on analyzing the potential of the Indian semiconductor market with application segments and product categories. The markets researched are consumer electronics and durables; telecommunications; IT hardware; industrial, automotive and strategic electronics. The report analyzes the impact of semiconductor technology driven industries on the Indian economy.This impact (direct and induced) will demonstrate the contribution of the semiconductor industry on GDP and employment generated in related and support industries.

This report focus on analyzing the total design market. It will evaluate the challenges being faced by the industry and market drivers and address the overall competitive structure. Further it will analyze the emerging opportunities in the embedded design services market. The report also elaborates on the impact of semiconductor technology driven industries on the Indian economy.

The reports will be strategic as it will provide direction for sound business plan, facilitate the ideation and innovation processes and identify customer needs.

For further details on sourcing the report, please get in touch with us:

Research CellISA
Tel: +91 80 4147 3250
Facsimile: +91 80 4122 1866
Email: research@isaonline.org

Background of semiconductor driven industry:

The Indian semiconductor and embedded design industry has revenues to the tune of USD 4.6 billion (2006) and employs nearly 1.02 lakh people. This is expected to increase to revenues of USD 43 billion in 2015 with employment projections of 780000 plus in 2015. The semiconductor sector encompasses VLSI design, hardware/board design and embedded software development, offered by both captive and non captive companies across India.

Captive companies have scaled up from merely being low cost skilled resource centers to those carrying out end –to -end design and development activities. Another promising statistic is that design starts in India are set to rise from 600 in 2005 to 3248 in 2015!

The driving forces behind this growth is the rapidly growing domestic market, strong education infrastructure, comparatively lower cost design talent, short product lead times, reduced entry barriers, rising government support, and last, but not the least, the improving infrastructure.

The ISAEY Benchmarking Study 2007 benchmarks the semiconductor design sector in India with peer countries on factors of importance to the sector and identifies important high level focus areas and actions to facilitate sustainable growth. Peer countries are Canada, China, Czech Republic, India, Israel, Taiwan, UK and the USA. Some of the main findings which clearly position as India as an attractive design hub are:

• Availability and scalability of talent
• Quality of talent
• Quality of technical education
• Talent cost advantage

One challenge that could confront companies seeking to expand semiconductor design activities in India is the supply and demand gap for competent professionals, despite strong education network within India. The increase in demand of the software content of electronic devices has led to an increase in the volume of embedded software activity globally. The presence of large cost-effective engineering workforce in India is expected to encourage global participants to choose India as the destination of such activity. The pressures placed on companies to emerge successfully from skills shortage is high at present and will only increase with time.

The challenge could reduce in the coming few years through government initiatives, better collaboration between industry and academia, higher participation of experienced professionals in training activities and greater flexibility in recruitment policies of companies. 15 Table: Revenues and Talent Pool (20062015)

Total design market	Share of estimated overall revenues 2006 (%)	Share of estimated Indian engineering design work force 2006 (%)	Share of overall revenues 2015 (%)	Share of engineering work force 2015 (%)
VLSI	US$0. 7 billion (15)	14200(14 )	U S $5.1 billion (12)	0.07 8 million(10)
Hardware / Board Design	U S $0.2 billion (4)	442 0 (4)	U S $1.6 billion (4)	0.03 1 million(4)
Embedded Software	US$3. 7 billion (81)	8350 0 (82)	US $ 36.3billion (84)	0.67million (86)
Total	U S $4.6 billion	102120(100 )	U S 43 billion (100)	0.78million (100)

Source: ISAFrost Sullivan, 2006

EDA companies (both product and service) are the starting block for the VLSI and hardware/ board design market. They are one of the most important links in the semiconductor value chain. EDA companies have taken the lead in developing engineering human resource for the industry in India.

Their models can be successfully replicated and scaled through various initiatives that can have positive impact on the industry as whole. structured plan to proactively address the workforce shortage at the campus stage itself could be achieved through combination of the following factors:

Awareness: Students and placement officers at universities need greater awareness about the sector, its companies, compensation and benefits, career options and career growth, thus enabling qualified manpower to make it the first choice at campuses. This could be through focused visibility programs at campuses and mass media.

Curriculum update: Industry support in updating of classroom curriculum and introduction of relevant curriculum at the appropriate time to students could help build knowledge for entry into the industry and to make the semiconductor industry viable option.

Centers of excellence and joint ventures: Joint initiatives between industry and universities to establish centers of excellence and competency for R&D in VLSI engineering, design automation and embedded system engineering, thereby leading to creation of IP and raising familiarity amongst academia.

Faculty sabbaticals: Short term projects with training, updating of technology awareness for faculty members in specific university departments could bring about specialization amongst the academia.

Government: Grants and scholarships to encourage doctoral and post doctoral research in premier institutions with appropriate financial and infrastructure support. Support to faculty and researchers to present papers globally and file for patents will be beneficial in the short and the long term.

Industrial training: Project assignments to engineering students for familiarization with the latest technology will provide students with hands-on training.

Short term courses: Specialized and advanced short term programs and courses in VLSI design and embedded software, run by educational institutions, will enable interested engineers to undergo appropriate training to enter the industry. It will also create larger talent pool which will be available to industry for quality and quantity of selection.

Subsidies: EDA tools offered by various players should be made available at subsidized rates.

Training: Faculty and student training on the latest EDA tools will provide exposure at college/university level.

Semiconductor industry in the recent past has made exponential progress in India. Since the market is very aggressive, the career opportunities in this field have grown tremendously.

Since this is niche field by itself requires talent in very niche domain expertise which is not widely available, resources working in this industry are in high demand. Growth prospects in terms of technical knowledge base, escalation to higher positions are faster as compared to other industries as they are in the growth stage in India

India has large number of qualified engineers graduating from colleges of repute. Engineers specialized in Electronics Communication, Electrical and Electronic Engineering, Physics and Master’s /PhDs in these subjects would fit the requirements of the design industry. Knowledge of hardware as well as software is expected of the engineers to work for this sector.

For manufacturing and its related industry, knowledge of material sciences, chemistry, chemical engineering, etc would create new vistas for jobs.

Salaries in the semiconductor space are the highest in comparison to other technology industries. There are huge job opportunities too in this field. For every VLSI engineer in the semiconductor industry, 10 design engineers and 100 application software engineers are employed. Stock options, flexi-time, exposure to high technology and global practices are the hidden benefits.

Leading companies in areas such as device conceptualization, IC design, IP development, hardware board development, embedded software development and systems integration hire talents in this industry.

• ISAFrost Sullivan 2007/08: India Semiconductor Market Update
• ISAFrost Sullivan Reports 2006
• ISAEY Benchmarking Study: India in the Global Semiconductor Design Ecosystem 2007
• Inputs from industry leaders

ISA WINWire-a weekly industry news:

The Weekly Industry Newswire (WINWire) captures published global current events on the semiconductor industry. It provides regular updates on industry and market trends and technological breakthroughs. ISA WINWire reaches an average of 10000 readers every week.