CIOL: What is the current status of the semiconductor industry in India?

S. Janakiraman: ISA did a benchmarking study with E&Y on India in the Global Semiconductor Design Ecosystem that was released in February 2007. As per that study, India has key strengths in availability and cost of talent pool while the areas to focus were the increasing cost, physical infrastructure and lack of specialization.

On the consumption side, we have again commissioned F&S (Frost & Sullivan) to get update on the current status of the industry, and for tracking the past and the future. Expect that to be released in June 2007.

Considering the buoyant economy and increasing appetite for electronic gadgets, we have high level of confidence on the growth levels in consumption. Also, the Indian government has, for the first time, came out with an exclusive policy for the semiconductor industry that will provide significant boost to manufacturing sector.

The ISA (India Semiconductor Association) had closely worked with the Indian government to structure the policy to meet the expectations of the industry, while protecting the country's interest in terms of the right size of investments as well as the right technologies being deployed. The impact of the policy on the manufacturing sector will take time. However, when that becomes a reality, will create significant positive impact for the semiconductor sector.

Overall, the semiconductor industry is poised for high growth and will make all round progress be in design or manufacturing or consumption. Issues to tackle are the raising cost and not yet conducive infrastructure.

CIOL: What are the growth drivers that are visible in the segment?

SJ: The immediate growth drivers for the industry will remain the design segment and increasing consumption. Those will further aid viability of manufacturing in India in addition to government’s support through implementation of semiconductor policy.

India needs to improve the quality and specialization of skills in the semiconductor design space to meet the high growth and demand of the industry. ISA is enhancing its collaboration with the academia to improve the content and quality of teaching as well as the level of research in this space.

CIOL: Do you feel that the investment plans announced by several leading companies will take off?

SJ: There is a clear interest by all the leading IDMs as well as fables semiconductor companies in looking at India as a destination for complex design sourcing as well as increase their market share in the growing market.

Manufacturing of electronics has seen remarkable progress in the last 20 months with Nokia, Motorola, Flextronics and Foxcon investing in India. Similar thrust in investments in areas such as semiconductor fabrication, test and packaging is not far away.

CIOL: Are there any factors that could slow down the growth?

SJ: On the design front, the cost of talent is increasing due to the demand-supply scenario as well as the appreciation of rupee. However, that will not dampen the growth much since the capabilities of talents and complexity of design that gets executed in India is ever increasing and value add by India is becoming a critical success factor for global players.

We need to make much higher level of investment in research in the semiconductor space that is heavily lacking in India, compared to Taiwan or the Western world.

CIOL: What is the vision of the ISA in this scenario?

SJ: The ISA would like to see India becoming the leading player in the semiconductor space. This needs to be achieved through balanced growth in the design, manufacturing, consumption, as well as imports and exports.

The ISA will support the whole ecosystem to develop through focused efforts on improving talents, research, innovation, government policies and visibility of the sector in the global market.

ISA has focused initiatives in those areas and will work with industry leaders to bring in visible progress. We would like to see India being known for its might in semiconductor space just similar to what we have achieved in software arena.