India’s semiconductor industry trade body, India Semiconductor Association hosted its third consecutive Vision Summit on Monday, February 18 and 19, 2008. There were over 300 delegates including an official delegation from Taiwan.

The theme for this year’s event was ‘Evolving Domestic market: Growth driver for the Indian Electronics Industry.’ Delegates represented industry, academia, analysts and venture firms and media.

‘It is time that the Indian firms take up the mantle and collaborate within this ecosystem and apply innovation to design products for the Indian subcontinent.’

Speaking at the Vision Summit, Azim H Premji, Chairman, Wipro spoke about India supplying innovative products to firms and geographies across the globe. The Indian subcontinent seems to have not largely been impacted by the product innovation cycle. The firms which have successful products worldwide can extent their success to the Indian markets in three key aspects which can address to bridge the gaps between consumer needs and products being sold to them:

1. Increased localization of products.

2. Characteristic is the need for 'supported adoption that is required by the Indian users. For example, the small yet significant impetus taken by the firms and their franchises in setting up small ‘training center’ in small neighborhoods across the cities, whether big or small introduced the PC to the common man which helped the SMEs and households to see the benefits. This is applicable to many Indian businesses too where they need the support in selecting the right products and solutions for their problems. They need to make the right investments to enable the market and new technology cannot sell by itself.

3. The need for evolved business models. The design services partner goes beyond just co-engineering the product. The partner is also responsible for overlooking the manufacture of the product. Thus, his success is dependant on the products success. The value that the partner brings to the table is his knowledge of the local market, presence in the ecosystem and experience in global product engineering.

Most of these practices were realized by the firms with deep understanding of the end consumer. They went beyond the usual to bring in innovation to their daily business practices. In today’s context, it’s anticipated that innovation plays an extremely important role. However, we need to understand the following basic essential guidelines:

1. To ensure that technological and managerial innovation go hand in hand.
2. To work on creating an entrepreneurial spirit within the organization.
3. To collaborate and co-innovate in the evolving ecosystem.

The market for the electronic products in India is huge and Indian firms are specializing in almost all domains. He concluded his speech by saying that the companies need to bridge the gap between consumer needs and products being sold to them.

Semiconductor: The next frontier

‘Semicon policy is a testimony of the synergy between the industry and the government’

Chief Guest Jairam Ramesh addressed the crowd and congratulated the ISA team for their tremendous effort in putting a conference of this stature. He said that the roll out of the semiconductor policy is a clear indication of the synergy between industry and the Government. Time is the only indicator which will forecast whether the policy has created exuberance which is rational or irrational and it will give a clear indication whether the numbers are staggering. Within the Fab city in Hyderabad, 12,000 acres has been declared as Special Economic Zone (SEZ). There are seven confirmed investments to be setup in the fab city. These add up to $7 billion to be invested over a ten year period. Five investments are in principal approval and add up to $1 billion. Another five new proposals worth $6 to $7 billion are in under active consideration. He hoped that these investments become a reality. However, these are staggering numbers that speaks about the success of the semicon policy.

He addressed two drivers that create demand for the electronics in the domestic market which are both public and private. These drivers will set in motion different set of policies from the government and the response from the industry. Seven million mobile phones are added to the market each month. Currently about 45 percent of the mobile phones are consumed in India are manufactured domestically. As manufacturing deepens, it is expected that 80 percent of the mobiles phones are consumed in India and will be manufactured locally.

Last year 7.25 million PC units were sold in India. India has miles to go before the domestic PC manufacturing kicks off and is certainly a significant opportunity in future. Today, the automotive industry in India is on par with the western counterpart. India is already exporting automobiles. Local manufacturing in this segment has gained momentum and will be a great opportunity for the electronics industry to develop killer applications for the automobile industry. Development will be a challenge in the areas like energy, medical electronics and e-governance. In terms of social impact, it calls for maximum amount of creativity and innovation. For semiconductor to be the next frontier there is a need to have good infrastructure, scale and alliances with trade bodies like ISA. He concluded his speech by saying, ‘Semicon Policy is a testimony of the synergy between the industry and the government.’

Indian electronics industry is at an inflexion point as we speak. The ecosystem of design, software tools, IP, and most recently test and manufacturing, has developed sufficiently to a point where local market potential is becoming increasingly attractive. The pervasive nature of electronics in everyday applications be it, consumer, telecom, automotive, industrial or healthcare, augurs well for the domestic sector and in that context this year’s theme for ISA Vision Summit captures that most appropriately. India’s GDP growth is predicated to its domestic market growth and electronics will play a vital role in all segments.

This year we have chosen ‘Evolving Domestic Market’ as the theme of ISA Vision Summit. India had been the source of best talents for the global semiconductor designs in the early part of this decade. Now it is also maturing to become the destination for sales of semiconductors and electronics. India has become one of the fastest growing market in consumption too. With the support of the Government of India and the announcement of ‘Semiconductor Policy’ we are seeing active investment in the solar fabs and ATMP facilities. Domestic Market is evolving fast and it is the most appropriate time to ensure focus and achieve leadership. I look forward to a valuable time spent over two days during ISA Vision Summit.

‘We are the first state in the country to establish a Special Economic Zone (SEZ) dedicated exclusively to the semiconductor industry’

Talking about the rich Karnataka culture, M N Vidyashankar IAS thanked ISA for holding the Vision Summit in Bangalore.

He said Karnataka has decided to establish a Special Economic Zone (SEZ) dedicated exclusively to the semiconductor industry. This 1000 - acre SEZ would be located close to Bangalore-India’s semicon design capital. Within this, the units would focus on the specific needs of the industry like the embedded system or VLSI, depending on the market needs. Karnataka is the first state in the country to set up such a SEZ.

The Government of Karnataka is in the process of announcing a new IT policy. He also said Government of Karnataka is receiving inputs from the ISA and the new policy will incorporate these inputs. The new IT policy will be ready in three to four months.

The potential industry development in India is of interest to our members, and our partnership with ISA will encourage and enable the membership of both associations to take advantage of combined resources and establish strong collaborative relationships.

Within four to five months after launching the Semicon Policy we have received Rs.40, 000 crores of committed investments for setting up fab and other ecosystem units. We expect two or three important announcements in next 15-20 days. We have before us a tremendous growth paradigm, which we should not miss.

SanDisk is very proud to be part of ISA. SanDisk sees the Domestic Indian market to have a great potential for all the Digital devices like cell phones MP3 players PC’s. All these devices are memory hungry as convergence is making all these devices a mini PC which can store music, files, video, take pictures. Thus the domestic market for flash storage has gone up and is growing at a fast pace and will continue to grow. SanDisk is very well poised in India to participate in this growth. We are thankful to ISA for all the initiatives taken by them to further the growth of Semiconductor industry in India.

The Vision Summit is a forum for the country’s industry thought leaders to interact with global leaders and drive a vision for India’s semicon industry. I would like to see India as the home of many successful fabless semiconductor ventures targeting local and global markets. Low cost SoCs targeted for different verticals will enable creation of affordable products and drive an entire semiconductor eco-system

The ISA member directory 2008 was launched at the Vision Summit. The directory captures the key players of the semicon industry and its evolving ecosystem. ISA members are design companies and the emerging manufacturing sector. Legal firms, VCs and academic institutions are part of the industry’s infrastructure who are playing a crucial role in the development and growth of the industry.

The Vision Summit was inaugurated by Jairam Ramesh, Minister of State for Commerce, Government of India. Also present at the inauguration were M Madhavan Nambiar IAS, Special Secretary of MCIT, Government of India, Stanley T Myers, President & CEO, SEMI, S Janakiraman, Chairman ISA, President and CEO, R&D Services, Mindtree Consulting Ltd. and Poornima Shenoy, President, ISA.

The Government of Karnataka has come forward as the host state for the Vision Summit this year. Other states have also extended their co-operation. ISA continues to enjoy the support of the industry for its activities. It is chiefly due to the active participation of both industry and government that an event of this dimension and caliber becomes a reality, year after year.

The earlier two global conferences which were held in Bangalore - Vision Summit 2006 and in Hyderabad - Vision Summit 2007 set the tone for an event driven by the quality and high standards of the presentation and participation. We aim to keep up this in the coming years.

ISA is very much a part of the growth of the India semiconductor story. The tremendous turnout of the delegates and the high quality of speakers is a testimony that the Vision Summit is now fixed on the calendar of senior executives.

Fab City, which is coming up near the new International Airport of Hyderabad will become the first world class cluster of semiconductor industry in India and would announce the arrival of India in the global semiconductor scenario. The area was already notified as an SEZ by the Government of India and APIIC is taking steps to provide the required external infrastructure, keeping in view the special needs of the industry. Soon the area will be bustling with the activity and will house many foundries, as well as solar fab units. The Vision Summit of ISA is an ideal platform to discuss the way forward for the semiconductor industry in India and to work out strategies of global competitiveness.

The ISA Vision Summit - 2008 provided an excellent opportunity for technology and business leaders in India to understand the issues, challenges and opportunities in Indian semiconductor industry.