The Indian electronics and semiconductor industry Wednesday urged the government to set up embedded technology parks across the country to strengthen the value chain and spur growth.
"Considering the huge potential for embedded systems in domestic and international markets, the government should set up embedded technology parks to build an ecosystem that will add value and reduce imports," Indian Electronics & Semiconductor Association (IESA) chairman Sanjeev Keskar said at an industry conference in Bangalore.
With imported components and electronic goods accounting for 65 percent of the domestic consumption, the scope is immense to indigenise across the value chain from chip design to embedded software systems and manufacturing.
"Even in the 35 percent of domestic production, we need to increase the share of product design, components, integrated circuits and printed control boards to double the high value portion from nine percent currently," said Kesker in a keynote address at the Embedded Software Conference (ESC 2013), organised by UBM India, an event management firm.
Growing demand for smart phones, tablets, intelligent vehicles, solid state lighting (LEDs), electronics in the healthcare sector and displays has expanded the market for ramping up local production across the value chain.
"Embedded technology parks will help build clusters and provide one-stop solution to stakeholders in the value chain and increase domestic production to 50 percent over the next few years," Keskar told about 500 delegates participating in the seventh edition of the three-day tech summit.
According to a recent study by Frost & Sullivan for IESA, local electronics consumption is projected to touch a whopping $400 billion by 2020, with chips accounting for $50-60 billion from $10 billion in 2012.
Of the $45-billion worth of electronic goods imported in 2010, India's contribution by way of design accounted for a mere $2 billion, while $20 billion worth of chips manufactured in Taiwan, China and Korea are based on chip design work done in India that go into finished electronic goods valued at $60 billion.
The Indian Electronics Systems Design and Manufacturing (ESDM) industry is expected to grow to $94 billion at a compound annual growth rate (CAGR) of 9.9 percent by 2015 from $68 billion in 2012.
The emerging ESDM industry comprises electronic products, components, semiconductor design services and electronic manufacturing services.
"The new government policy envisages setting up the greenfield clusters on about 100 acres of land with Rs.50 crore seed capital and expanding the brownfield (existing) clusters to make our country a powerhouse in electronics and semiconductors to promote made-in-India products developed for global markets," Keskar pointed out.
According to ESC-India director S. Anees Ahmed, the industry's long-term game plan is to reduce the demand-supply gap and increasing import substitution to capitalise on the growing market potential.
"Our strengths in design and development have attracted global majors like Samsung, LG, Sony and Intel to set up their research and development (R&D) centres to work on innovative products and solutions. The industry needs to move up the value chain to manufacture and market the products for domestic and global markets," Ahmed said.
As the largest conference on embedded technologies in the sub-continent, ESC provides a platform for hands-on training to embedded systems and technical engineers and help them to hone their domain expertise, knowledge and skills.