India; the blooming garden for semiconductor industry

Small cars and electric cars (Nano, Reva and many similar but undisclosed projects), Chandrayan-2 mission, power plants, LCD TVs, low cost medical devices, PV Solar/LED lighting and now the latest UID projects are some of the most visible immediate opportunities in the Indian Semiconductor market. For semiconductor marketing professional this market looks like a beautiful garden with budding flowers adjacent only to the other bigger garden of China Semiconductor market. This garden is more attractive than the flower-less older and bigger gardens (US, Europe, and Japan) elsewhere in the world.

The three semiconductor chip companies with right mix of products for this UID project are ST Microelectronics, Infineon, and NXP Semiconductor. Infineon is already supplying its contactless security microcontroller to India's electronic passport program.

The processor IP company ARM can also be expected to reap significant benefit from this market compared to other companies in this domain. The reason is there are high chances that the processor inside the unique ID card might embed a microcontroller with ARM processor core. Intel might miss this market due to lack of right device fitting UID requirements. It all depends how powerful this id card should be in in terms of features. 32 bit/8 bit? How many microwatts of power? The physical size and shape! Since this is issued to every Indian the cost of the card and rugged features matters a lot.It can be a smartcard or SIM card or it may even take some creative shape.

The total cost of semiconductor devices alone in this project can be estimated in the range close to 1billion US$. The project is headed by India's one of the best IT system expert Mr. Nandan Nilekani, an x-Infosys chief. He is the right selection for this great project. Nandan Nilekani is given the best opportunity to fix many of the India's problems through this project.

Though Semiconductor market in India is growing, there is no great visibility of any emerging ecosystem for semiconductor manufacturing in this region. India is full of VLSI/semiconductor design service companies that too mostly offshore design centers of leading semiconductor companies. But there are no Indian semiconductor companies neither with-fab nor fables to take on this market. Hyderabad based Semindia is still lagging behind in setting up its fab. However the public sector companies like BEL, ITI have the capability to scale up infrastructure to handle UID kind of high-security projects. The Government would prefer PSUs rather than MNCs due to the security risk involved in important projects like UID. The issue with local companies is quality of technology; MNCs offer better technology than local companies.

In the recent budget there's no significant announcements supporting electronics manufacturing except for increase in duty for imported set-top boxes to benefit local set-top box manufacturers.

In a recent interview to Business Standard publications, Sachin Pilot, Minister of State for the Department of Information Technology (DIT) has said, hardware and semiconductor are going to be the focus areas in coming years. The positive comments of the Minister on India's requirement for semiconductor fab are highly commendable.

Though Indian semiconductor is becoming attractive but wading through this flowering garden is not that easy due to various domestic and international issues.