Indian semiconductor driven market to grow at 13.4% by 2010

A growing market despite a decline in the growth rate

Bangalore, India - Jan 28, 2009 (PRN): The India Semiconductor Association (ISA) and Frost and Sullivan (F&S) released the ISA-Frost & Sullivan report update 2008-10 in Bangalore today. ISA is the trade body representing the Indian semiconductor driven industry. This is the third report on the subject and the second update.

The report was released by Jaswinder Ahuja, Chairman, ISA and Corporate VP and Managing Director Cadence Design Systems India along with Poornima Shenoy, President, ISA and Anand Rangachary, Managing Director, South Asia & Middle East, Frost & Sullivan.

According to the report, the total revenues of the Indian semiconductor market (Total Market - TM) are poised to grow from USD $5.9 billion in 2008 to USD $7.59 billion in 2010 at a CAGR of 13.4%. The Total Available Market TAM revenues are anticipated to climb from $2.53 billion in 2008 to $3.24 billion in 2010 with a CAGR of 13.1%.

The decline in CAGR, from 26.7%, in the earlier report of 2007, to 13.4%, in the current report, is on account of revised investment and manufacturing scenario seen in the second half of 2008. There has also been a decline in the Average Selling Price ASP for various semiconductor components ranging from 3 to 10 percent depending on the final product and the semiconductor content. The overall global slowdown had also not been anticipated during the previous report of 2007.

Speaking at the launch, Poornima Shenoy said, �India is a story of growth and this is important in such times though growth may be below past projections. The current slowdown will impact manufacturing investment prospects. A low manufacturing index for electronic products leads to higher imports and thus lowers the local potential for semiconductors, their key component.�

Anand Rangachary said �Information Technology & Office Automation, wireless handsets and communications segments are going to define the semiconductor market growth. The semiconductor market growth is expected to be driven by products/ services such as set-top boxes, wireless handsets, the 3G rollout, deployment of WiMAX, notebooks and smart cards. Opportunities exist for semiconductors in LCD TV, digital camera and Storage Flash Memory markets�.

Definitions

Total market(TM) for semiconductors: The total consumption of semiconductors in India, in any form (can be purchased locally, imported as part of Completely Knocked Down (CKD) or Semi Knocked Down (SKD), imported as a complete product), by any source (Sources are directly from semiconductor company offices in India, distributor sales, direct imports etc) and in either currency (US$ or Indian rupee).

Total Available Market (TAM) for semiconductors: Consumption of semiconductors in India by virtue of manufacturing of end-user products in India + consumption through a local purchase order in India.

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About India Semiconductor Association (ISA)

ISA is the premier trade body representing the semiconductor driven industry in India and has around 120 members from India and outside it. ISA aims to establish India as the preferred global destination for semiconductor and solar photovoltaic companies. This includes chip design and embedded software companies, the solar fabs and the related ecosystem. ISA is committed towards building global awareness for the Indian semiconductor driven industry and supporting its growth through focused activities. ISA supports the business interests of its members. ISA is engaged in providing current and credible data on the sector through research publications; working with state and central governments on policy related matters; and having events to create visibility and networking opportunities. ISA has played a prominent role in working with the Government of India in the formation of the Indian Semiconductor Policy 2007.