Electronics industry in India

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Electronics industry in India..an overview N
Krishnan, Director General-STPI India
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Electronics industryon a growth path

• Domestic production at USD 20 billion in 2008-09
  exports at USD 4 billion, representing a growth
  of 21 over the previous year
• All the global top 10 fabless design companies
  have India operations and 22 of the top 25
  semiconductor companies have design / development
  centers
• India emerging as a preferred destination for
  manufacturing -
• electronics ecosystem building up
• shift to increased local value addition
• Industry performance in key segments
• .

Key segments Cumulative installed base Annual figures (2008-09)
Mobile subscribers Over 450 million Over 100 million
TVs 150 million 15.5 million
PCs 30 million 6.8 million
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Government of India Policy Initiatives
Semiconductor Policy 2007

• Government will bear 20 per cent of the capital
  expenditure during the first 10 years for units
  located inside SEZs and 25 per cent for those
  outside it.
• Window open till March 2010.
• For semiconductor manufacturing (wafer fabs)
  plants, the policy proposes a minimum investment
  of 625 Million and 220 Million for
  ecosystem units including ATMP
• There is a ceiling of 3 Fab units and 10
  ecosystem units for incentives under the policy
• Key benefit is the grant of the SEZ status.
• Overwhelming response to the Governments policy
  17 proposals received envisaging investment of
  35 billion with 15 proposals received relate to
  solar photo-voltaic manufacturing
• Government of India has given in-principle
  approval to 12 proposals
• Great opportunity to leverage the policy
  incentives for ATMP operations

This policy is applicable for manufacturers of
all semiconductors, displays including LCDs,
organic light emitting diodes, plasma display
panels and any other emerging displays, storage
devices, solar cells photo voltaic other
advanced micro- and nanotechnology products
assembly and test
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SEZ incentives Government of India

• No license required for import.
• Exemption from customs duty on import of capital
  goods, raw materials, consumables, spares etc.
• Exemption from Central Excise duty on procurement
  of capital goods, raw materials, consumable
  spares etc. from the domestic market.
• Supplies from DTA to SEZ units treated as deemed
  exports.
• Reimbursement of Central Sales Tax paid on
  domestic purchases.
• For profits arising out of direct exports
  (physical exports to outside India) 100 income
  tax exemption for a block of five years,50 tax
  exemptions for five years and up to 50 of the
  Profits ploughed back for next 5 years under
  section 10-A of Income tax Act

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India insourcing advantage

• Overall 7 to 10 reduction compared to current
  scenario
• Shipping Cost 1 to 2
• Customs clearance, logistics
• Air Cargo
• Import Duty
• Domestic Tariff Area (DTA) 4
• Inventory Cost 1 to 3
• Carrying cost of product ( packaged parts is
  costlier based on ASP)
• Unused products need to be shipped back to
  supplier
• Hold inventory in wafers
• Cycle time reduction in manufacturing chain
• Assemble only when required 5 days turn JIT
• Build product that is required no waste
• After Sales Support and replacements
• Replacements for defective, low yield products
• Major opportunity to reduce cost and improve
  customer satisfaction

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India advantage
Local Market

• Growing economy and a large potential market
• Global recognition for back-end services
• A proven case for IP, embedded systems and IC
  design
• Attractive for Manufacturing Investments
• Skilled employee base
• Strong RD capabilities
• Fast and upcoming modern infrastructure (SEZs)
• Proximity to EU and MEA market
• Freight Cost cheaper than China - Faster
  delivery and lesser pipeline of inventory

Profit from local Sales
Harness low cost manufacturing base to service
local, European and MEA markets

• Use India for IP Services
• New product development
• Engineering services

Manufacture
Back-end Services
India is a great Opportunity triple advantage
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• Come.explore.be a part of the great Indian
  opportunity!Thank youdgoffice_at_hq.stpi.in