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it India' science city, the IT hub, the industrial metropolis,
or the electronics city — Bangalore in the past decade has emerged
as one of the fastest growing cities in Asia. From machine
manufacturing, aerospace and aircraft development, to
telecommunication and aeronautics, several sectors in the city have
leapfrogged in the past, creating new employment opportunities as
well.
has been one of
the fast faced sectors, with support and interest also shown by the
UK, US, Israel and many others in investing a considerable amount of
money in product design and also believing in the skill sets of
Indian engineers and scientists. However there are considerable
challenges such as the amendment of right policies and regulatory
environment in place to assure a sustainable growth and creating a
better design and manufacturing ecosystem in India. align="JUSTIFY">Opportunities
Galore, Challenges a Concern
The Indian
Association (ISA) event (February 1-2, 2010)
has been one of its kind, acting as a platform for industry leaders
to address such challenges and the varied opportunities that one has
in the field of semiconductor design and related product development.
The event kicked off with a keynote by
Madhavan Nair. The
immediate past chairman of ISRO, and presently the President of the
International Academy of Astronautics (IAA). According to Nair, “The
ISA event brings with it opportunities for several sectors to come
together and discuss the challenges the semiconductor industry has
been facing. The involvement of foreign players from the UK, Israel,
and Europe is also a testimony of the kind of interest the
semiconductor industry in India has generated among the foreign
counterparts.” He further elaborated that “Indian scientists and
engineers are capable of dealing with very complex issues. However
our contribution to the electronic and semiconductor industry is very
minuscule. It is high time that the industry takes up this challenge
to address the issue.” align="JUSTIFY">
As per a Frost and Sullivan Report the global
industry is
estimated at $1.75 trillion and is expected to reach $2 trillion by
2014 and $2.4 trillion by 2020. The domestic production is presently
less than 45% of domestic production, however the consumption in the
domestic space is expected to grow at a staggering CAGR of 22% for
the period 2009—2020. align="JUSTIFY">
However key challenges are an inadequate infrastructure, tax
structure, inflexible labor laws, a limited R&D focus funding,
and limited focus to value addition and exports. Supply has not kept
pace with demand in India which is another key concern and hence the
imports from countries such as China and Taiwan have increased. align="JUSTIFY">
An interesting point here is that industry leaders and association
from the electronics and semiconductor industry should easily be able
to convince the government in laying out supportive policies and
initiatives, since the government themselves are the biggest users of
semiconductor components! align="JUSTIFY">Unveiling
the Semicon Policy
Chief Minister of Karnataka, B.S Yeddyurappa unveiled the Karnataka
Semiconductor Policy 2010 on February 2, 2010. Unveiling the semicon
policy the Chief Minister said, “23 out of the 25 multinational
companies involved in semiconductor design are located in Bangalore.
Bangalore is the largest hub of semiconductor design companies
outside the Bay area of California. To further strengthen the State's
leadership position, state government is working in close association
with ISA and the semiconductor and design industry. align="JUSTIFY">
As per the new policies, the assembly, testing, marking, and packing
units would be provided fiscal incentives and concessions such as
investment subsidy, exemption from stamp duty, entry tax, interest
free loan on VAT, and industrial power tariff. The state government
will also create a friendly industrial environment not only in
Bangalore but also in Tier II and Tier III cities such as Belgaum,
Mangalore, Mysore,. Hubli, Dharwad, Shimoga, and Gulbarga. Keonics, a
Government of India undertaking has been assigned the task of
developing IT parks in the Tier II and Tier III cities. align="JUSTIFY">
Adds Katta Subramanya Naidu, Minister for Housing, Information,
BWSSB, IT & BT, “Over 80% of the 200 plus companies in the
field of semiconductor are located in Bangalore. The strength in
designing, embedded software, VLSI , and R&D lies in the half a
million talent pool of the state. The Government of Karnataka would
provide additional amount of Rs. 25 crore towards 26% contribution to
the KITVEN IT fund for raising funds from the market to assist start
up semiconductor units engaged in design and embedded software.” align="JUSTIFY">
India Semiconductor Market — Revenue
forecasts in US $bn
Total Semiconductor Market
2007
2008
2009
2010
Projected Total Market
4.52
5.9
6.72
7.59
Projected Total Available Market
1.74
2.53
2.82
3.24
ISA-Frost & Sullivan, 2008
The government will also provide financial
assistance to firms for filing IP in accordance with the incentives
provided in the Industrial Policy 2009-14. Apart from this a school
under the IIIT would be set up at a cost of Rs. 10 crore and a
separate Research Lab valued at Rs.5 crore would be set up, with a
contribution of 25% from the industry. align="JUSTIFY">
Other fiscal incentives as per the policy
(2009-14) includes investment promotion subsidy, exemption from stamp
duty to MSME, large and mega projects, interest free loan on VAT to
large and mega projects, and interest subsidy to micro manufacturing
enterprises. align="JUSTIFY">Vision
2020
The Ernst and Young has highlighted a very
interesting point. France is one such county where access to the
Internet is a right rather than a service. India needs to follow such
a trend as it is very evident that Internet would widen the horizons
ranging from basic information, education, and access to public
service. Connectivity has to be the highest priority in Indian
government's agenda and in its vision for 2020. As per the Karnataka
policy, the government needs to promote the state as a semiconductor
design hub, attract investments in high tech semiconductor
manufacturing, promote generation and used of
technology, and
the need to focus on
development. While Bangalore can
continue to be the key center in the state, it is the Tier II cities
where significant investments needs to be developed. India's
competitive edge in the global market is certainly its talent base
with design capabilities as it is more evident now that global
companies are aware of the availability of the
pool and who
are effectively leveraging this opportunity.
align="JUSTIFY">For detailed information on
Karnataka
Semiconductor Policy — 2010 -
here
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