1. ISA - FROST & SULLIVAN 2010 - 12
India Semiconductor Market Update
Key findings
FROST & S U L L I VA N

2. EXEC UT IVE SU MMA RY
Application segments market
ISA-Frost & Sullivan: India Semiconductor • IT & OA:
Market Update (2010 - 2012)
Indian IT/OA semiconductor market:
The ISA-Frost & Sullivan Report provides market estima- TM and TAM revenue forecasts, 2009-2012
tion and forecasts for the different semiconductor product 3500
markets in India till 2012. It highlights growth areas for the
period 2010 - 2012. The first ISA-F&S report was released in 3000 2958.2
2006. This is the fourth update. It is used by industry and
2500 2434.0
government in its planning process.
2052.9
The application segments studied include: 2000 1791.4
• Mobile devices
1500
• Telecommunications
1000 741.8
• IT & OA 695.2
545.3 596.2
• Consumer electronics 500
• Industrial electronics
0
2009 2010 2011 2012
• Automotive electronics and
Total Market ( USD Million) Total Available Market ( USD Million)
• Others (aerospace, defense, medical
Source: ISA-Frost & Sullivan, 2010 Base Year: 2010
electronics and smart cards).
Key drivers:
The Report has been released on May 4 2011 at New Delhi
• TM: Emerging Tablets market; continuing Notebooks penetration; Extensive
by Shri. R Chandrashekhar, IAS, Secretary, Department of demand for Flash memory.
Information Technology, Ministry of Communications & • TAM: Sustained demand for desktops emerging from Government’s comput-
Information Technology, Government of India. erization and e-Governance drive.
Manufacturing
Year TM US$ million TAM US$ million
Index (MI:TAM/TM)
Key findings 2010 2052.9 596.2 0.29
2012 2958.2 741.8 0.25
Overall Indian semiconductor market: CAGR
20% 11.5%
• India’s semiconductor market grew by a phenomenal 28.3% (2010-12)
in 2010; Global semiconductor market’s cyclical trends has
minimal impact on India
• Mobile devices:
• Mobile Devices, Telecommunication and IT/ OA contributed
82% to Semiconductor TM in 2010 Indian mobile devices semiconductor market:
TM and TAM revenue forecasts, 2009-2012
• Local manufacturing of telecom equipment by OEMs and
EMS companies to propel related semiconductor consump- 3500
3274.9
tion by a massive 50% during 2010 to 2012
3000 2807.1
• Influenced by regulatory norms and sharpening competi-
tion, automotive segment to account for the highest growth 2500
in semiconductor demand at 31% from 2010 to 2012 2074.8
2000
• Sustained gulf between semiconductor TM and TAM from 1562.7
2010-2012 highlight the urgency to promote local manufac- 1500 1379.0 1250.1
1391.2
turing to drive higher growth in TAM 1080.7
1000
Total Indian semiconductor market :
TM, TAM revenue forecasts, 2009-2012 500
12
0
2009 2010 2011 2012
10 9.86
Total Market ( USD Million) Total Available Market ( USD Million)
8.25
Source: ISA-Frost & Sullivan, 2010 Base Year: 2010
8
6.55 Key drivers:
6 5.11 • TM: 3G and smart phones; Data cards.
4.71
• TAM: Influx of local suppliers with aspirations for local production.
4 3.88
3.14
2.4 Manufacturing
2 Year TM US$ million TAM US$ million
Index (MI:TAM/TM)
2010 2074.8 1250.1 0.60
0
2009 2010 2011 2012 2012 3274.9 1562.7 0.48
Total Market ( USD Billion) Total Available Market ( USD Billion) CAGR
25.6% 11.8%
Source: ISA-Frost & Sullivan, 2010 Base Year: 2010 (2010-12)
2 CONFIDENTIAL ISA COPYRIGHT

3. • Telecommunications: • Industrial electronics:
Indian communication semiconductor market: Indian Industrial Electronics semiconductor market:
TM and TAM revenue forecasts, 2009-2012 TM and TAM revenue forecasts, 2009-2012
2500 450
415.8
400
2000 1915.3 350 344.3
317.0
1587.3 300 284.4
263.8
1500 1411.6 250 243.4
1245.7 215.5
200 182.2
940.2 998.5
1000
150
632.3
100
500
225.3 50
0 0
2009 2010 2011 2012 2009 2010 2011 2012
Total Market ( USD Million) Total Available Market ( USD Million) Total Market ( USD Million) Total Available Market ( USD Million)
Source: ISA-Frost & Sullivan, 2010 Base Year: 2010 Source: ISA-Frost & Sullivan, 2010 Base Year: 2010
Key drivers: Key drivers:
• TM: National Broadband Plan; expanding telecom infrastructure and enter- • TM: Products enhancing energy efficiency key to TM revenue growth.
prise markets. • TAM: Augmenting capacities for CFL lighting and self sufficiency in metering
• TAM: EMS contribution to telecom infrastructure equipment manufacturing key for TAM revenue growth.
Manufacturing Manufacturing
Year TM US$ million TAM US$ million Year TM US$ million TAM US$ million
Index (MI:TAM/TM) Index (MI:TAM/TM)
2010 1245.7 632.3 0.51 2010 284.4 215.5 0.76
2012 1915.3 1411.6 0.74 2012 415.8 317.0 0.76
CAGR CAGR
24% 49.4% 20.9% 21.3%
(2010-12) (2010-12)
• Consumer electronics: • Automotive electronics:
Indian Consumer Electronics semiconductor market: Indian Automotive Electronics semiconductor market:
TM and TAM revenue forecasts, 2009-2012 TM and TAM revenue forecasts, 2009-2012
700 350
576.9
300.9
600 300
500 250
469.3
224.3
400 386.7 200
344.9 175.2
159.3
300 266.8 150
135.3 132.0
108.4
200 194.9 100 82.9
147.1 160.2
100 50
0 0
2009 2010 2011 2012 2009 2010 2011 2012
Total Market ( USD Million) Total Available Market ( USD Million) Total Market ( USD Million) Total Available Market ( USD Million)
Source: ISA-Frost & Sullivan, 2010 Base Year: 2010 Source: ISA-Frost & Sullivan, 2010 Base Year: 2010
Key drivers: Key drivers:
• TM: Accelerated replacement of CRT TV with FPD TV • TM: Digitization of controls and expanding inclusion of safety and
• TAM: Increasing proportions of local manufacturing of LCD TV and sophistication features.
Set top boxes. • TAM: Evolving trend of localization in product procurement by Auto OEMs.
Manufacturing Manufacturing
Year TM US$ million TAM US$ million Year TM US$ million TAM US$ million
Index (MI:TAM/TM) Index (MI:TAM/TM)
2010 386.7 160.2 0.41 2010 175.2 108.4 0.62
2012 576.9 266.8 0.46 2012 300.9 159.3 0.53
CAGR CAGR
22.1% 29% 31.1% 21.2%
(2010-12) (2010-12)
CONFIDENTIAL ISA COPYRIGHT 3

4. • Others (aerospace, defence, medical electronics,
smart cards) electronics:
Indian Other Electronics semiconductor market: Key drivers:
TM and TAM revenue forecasts, 2009-2012
• M: ID Programs & Welfare Schemes adopting Smart Cards crucial for
TM revenue growth.
450
417.9 • TAM: Growing impetus for ‘made in India’ medical and defence equipment.
400 378.9
Manufacturing
350 330.6 Year TM US$ million TAM US$ million
Index (MI:TAM/TM)
300 2010 330.6 182.0 0.55
270.8
250 246.8 2012 417.9 246.8 0.59
207.1 CAGR
200 12.4% 16.4%
(2010-12)
150 141.4
182.0
100
50
0
2009 2010 2011 2012
Total Market ( USD Million) Total Available Market ( USD Million)
Source: ISA-Frost & Sullivan, 2010 Base Year: 2010
Share of application segments 2010 & 2011:
Segments % share of TM % share of TAM
2010 2012 2010 2012
IT & OA 31.3 30.0 19.1 15.7
Mobile devices 31.6 33.2 39.8 33.1
Telecommunications 18.9 19.4 20.1 29.9
Consumer electronics 5.9 5.9 5.1 5.7
Industrial electronics 4.3 4.2 6.7 6.8
Automotive electronics 2.6 3.0 3.5 3.4
Others electronics 5.0 4.3 5.7 5.3
Conclusions and future directions:
Following are some imperatives needed for bolstering growth Capitalizing on existing strengths to attract investments
in electronics manufacturing in the country: is a short-term strategy. However, the long-term vision of
developing and sustaining a world-class electronics industry
• Change in strategy from “‘Design led Manufacturing” to needs more concerted efforts and a planned strategy at the
”Demand led Manufacturing” national level. As observed in most of the developed and
• Promotion of export subsidies to create an environment for aspiring countries, identifying and focusing on electronics as
electronics exports a priority sector and coming up with policies and initiatives
• PPP initiatives to develop ”integrated electronics parks and focused on the industry has been a critical tool for success.
clusters” Similarly, for the electronics industry to grow in India there is an
immediate and pertinent need for the government to introduce
• Promotion of tax holidays and incentives for EMS companies
a National Electronics Development Plan (NEDP). This national
investing in the country
strategy has to be formulated through discussions with key
• Policy to attract investment in setting up of ecosystem industry stakeholders including existing manufacturers and
companies members of the SME sector, industry associations, respective
• Identification and promotion of ”killer application or government departments, and regulatory bodies. It must
product” segments for indigenous manufacturing – telecom encompass strategies covering all the aforementioned factors
equipment, mobile handsets, STB, LCD TV, LED lighting, and much more for encouraging the holistic development of
medical devices, and auto-identification products, to name a the electronics ecosystem in the country.
few
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