Date: 05/11/2012

ISA Chairman: India strong in semiconductor and software but not putting it together

The young semiconductor industry body ISA (India Semiconductor Association) is rich-body with wide range of membership with around 50%+ members are India based and 40%+ members are MNCs. ISA is playing increasing role in India’s electronics market by actively engaging with Government in sharing the information and expertise.

This writer recently sat with Satya Gupta, Chairman of ISA, to learn his thoughts on the Indian electronics and semiconductor industry. Here below are some of the excerpts from the conversation.

In India, the consumption of electronics systems is growing very fast and is causing concern to Government and industry due to severe imbalance in locally-made vs imported electronic systems. Satya says “Irrespective of we do something or not, the market consumption is going to grow. Now, what we have to see basically is, How do we make all the systems work so that the most of the demands are basically supplied by domestic companies. That is the challenge. In the ESDM report, we have projected may be by now (2012) 80-85 Billion $ worth of consumption.” Though there are domestic companies doing product assembly here, the value addition by domestic companies is least, according to him.

The three factors that are driving the Electronics System Design and Manufacturing (ESDM), as per Satya are, consumption, reducing the dependency on imports and employment creation. He says “If we can do more and more of demand-supply domestically, we will address all of this three factors.”

The fourth factor he adds is “electronics is becoming a strategic asset, basically in 5-10 years, if we can control electronics, you control everything. All the communication data security everything is dependent on electronics. That is basically unseen phenomena, and that is also very important”

Satya says “In last two to three years, the Government has become very aware of the fact that, if they don't pay attention to this sector it will a big problem-- going forward, that realization is very well entrenched in the highest level of government. Government able to put together with the help of people like ISA and others this National Electronic Policy, which is almost covers everything which we need to do catalyze this industry”

Cabinet has already approved Preferential Market Access, Electronics Manufacturing Clusters, Modified SIP, and Electronics Development Fund. These all are important boosters.

Satya finds if any India based companies wanto make needy equipment like settop box, tablet, energy meter without government support/intervention, they will basically have certain disabilities factors. The disability is mostly in the financial side, and second is the infrastructure. Supply chain also need to be improved but not a big disability factor, as per him.

He says if India is growing India should benefit. He shared a comment by industry expert who had said "India is growing China is benefiting".

On the innovation front, Satya suggests “If the right kind of incentives and market is provided to the entrepreneurs, there is no dearth of talent for creating IP.”

He is bullish about the new policy. He says “the policy is very aggressive, but the problem here is it takes long time to convert the ideas in to implementation.”

Satya sees collaboration with different regions of the world is important. He says “Irrespective of Government to Government engagements, If you see the amount of the technology collaboration happening between and US and India, Europe and India, Japan and India, it is enormous.”

Though ISA stands for a word 'semiconductor', Satya finds semiconductor chip is not everything, He says “One thing we thought about is its not only about chips, I need to be able to make my own system, that's where the real benefit is going to come from.”

On where Indian industry failing, he points out “When we say system certainly semiconductor is there, embedded software is there, and components. We are strong in silicon and embedded software, we are not putting it together.”

The whole effort is to focus on the system design, use local talent and collaboration with the rest of the world to create products in India, he quotes.

On the focus of ISA, Satya explains “In last four years the ISA focus has become more about basically how to develop the electronics market in the country rather than only the member-focused, what we saw is if the electronics market grows in India first thing is, country benefits, common man benefits, and subsequently all the members (ISA) benefit.”

Finally on the semiconductor fab he quotes “Fab is important but it is not panacea. But until you do all other things, the fab will itself will not succeed.”