India Electronics: New market driven journey from services to products

Indian private electronics engineering industry was slipped into services mode of business from products in early 90s, the time during which Indian economic policies were liberalized. Few stubborn companies who believed in products market also migrated to services over the time. The reason was market opportunity in services. Companies have made huge profits from 90s to until now.

Now world over, the recession is impacting all areas of industry, so is on Indian service industry too. Amid this recession, there is a great opportunity coming up for low cost electronics products. Many don't know whether recession is temporary or long lasting, but the opportunities in Indian market for electronic equipments is sure.

To take up this fresh opportunity, Indian electronic industry is bracing up to take on the opportunity with few built in advantages it already has. But it's tough, mainly; the industry has lost its grip on manufacturing. The material and manufacturing elsewhere is cheaper than in India.

Indian Semiconductor Association (ISA) vision summit held on Feb 16 and 17 at Bangalore was clearly focused on identifying the market and addressing the design challenges in developed mass consuming electronic equipments for Indian market.

The inaugural address was from Nandan Nilekani, Co-chairman of the board of directors, Infosys Technologies. The software service industry's Czar has shared four keywords for Indian electronics and semiconductor experts to develop products.
They are, connection, health care, energy and Education. There is enormous amount of opportunities in all these areas to design and produce affordable products for rural and poor Indians to empower them with basics such as education, health and connection to access few urban only facilities.
To list few of such products, low cost laptop, affordable health diagnosis tools (kind of e-doctor), easy to use and secure identification systems etc.. etc.. This list can go on.

On the energy front, once a region has enough electrical energy, achieving other economic goals is fairly easier. Every one (from villages to malls) needs uninterrupted electricity and now it has to be from clean environmental friendly resources. The only way out is solar.
Please read this separate article "Rajastan state of India is next big market for solar semiconductor industry".

Even for the recession hit economies, Indian market throws substantial opportunities such as growing availability of low cost skilled manpower and market of mass consuming products.

There are plenty of opportunities for each and every market. Few of such products presented by some speakers include, a small handheld ECG equipment costing 700 US$ from GE medical systems and a driver assistance system in buses developed by Automotive Infotronics (Jointly owned by Ashok Leyland and Continental). The speaker Aashish Shah of GE Medical System said, there are immense opportunities in medical electronics for Indian market. Nearly same was the opinion of Dr. Aravind Bharadwaj CEO of Automotive Infotronics.

The three key suggestions from these two speakers in developing low cost but reliable equipments were,
1. Scalability/modularity in design are very important
2. Design to cost, every rupee counts.
3. Make best use of Chinese components and Indian design services

Some of the other advises and ideas shared by attendees include,
a. Make the product for Indian customer and scale the same product for other such similar markets in     the world.
b. Engineering colleges have to produce readily employable talent with industry ready skills. More PhDs     and M.Techs are required with some specialized design skills. Designing low cost mass products is     not easy and cheap.
c. Have a predictable and quality supply chain. It's not just semiconductors lot of other devices and     components of quality and reliability are required.
d. Continuously track the technology change. To give an example, at ISA vision summit, after one     speaker displayed portable ECG equipment, than in next session, another speaker said about the     availability of single chip ECG device which can be embedded into patient body itself.

On the subject of India having own semiconductor fab, this writer asked the opinion of few speakers and other ISA vision summit delegates. There was mixed response, both yes and no.
India can produce interesting products by using devices made in offshore fabs, but a local semiconductor fab adds up to lot of strength to the industry.