India has catapulted to the world league in semiconductor manufacturing. According to the India Semiconductor Association (ISA), the premier body of semiconductor companies and chip design firms in India, the country has already emerged as a preferred destination for chip designing and embedded software. India can now go a step ahead and take up manufacturing of semiconductors for both the world and domestic markets.

The ISA-Ernst and Young in their benchmarking study, 'India in the Global Semiconductor Design Ecosystem', rates India as the best among different destinations - including Silicon Valley, Taiwan, the UK, Israel, Canada and the Czech Republic - on availability and scalability of talent.

India Advantage

India has certain natural advantage that has attracted many companies to set up their Indian operations. Already, all the top ten fabless companies and twenty three of the top 25 semiconductor industries have India operations.

• A large consumer market which is estimated to see a ten-fold rise in middle class population and four-fold rise in household income by 2025 from 2005.
• Large manufacturing capability, spanning almost all area of manufacturing activities.
• Well developed R&D infrastructure and technical and marketing services.
• One of the largest cost-competitive technical workforce nations.
• Huge potential in the burgeoning information technology industry.
• Developed banking system, commercial banking network of over 63,000 branches, supported by a number of national and state level financial institutions.

Broad-based Growth Potential

India has huge potential across different segments of the semiconductor value chain, from board, chip and systems design to finished electronic products. According to a report by ISA Frost and Sullivan, while the total available market (TAM) revenues are estimated to increase at a CAGR of 35.8 per cent US$ 3.18 billion in 2009 from US$ 1.26 billion in 2006, total market revenues are estimated to grow at a CAGR of 26.7 per cent from US$ 2.69 billion in 2006 to US$ 5.49 billion in 2009.

The top five end-user products that are expected to drive growth over the period 2007-09 would be: mobile handsets, desktops and notebooks, GSM base stations, set top box and energy meters. Simultaneously, the top four semiconductor products that are expected to drive revenues are microprocessors, analog, memory and discretes.