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India IC consumption set to double, analyst says

Posted: 19 Dec 2006 ?? ?Print Version ?Bookmark and Share

Keywords:IC? semiconductor? EMS? mobile phone? embedded software?

Driven by communications, India will see its IC consumption more than double by 2010, according to an analyst at In-Stat.

In-Stat cited a few key catalysts for the increase, including a growth in EMS activity as well as an expanding middle class that is hungry for gadgets, especially mobile phones.

"The semiconductor ecosystem, which is currently dominated by design services and embedded software, will be in place by 2010 with the setting up of planned semiconductor manufacturing facilities," said Mayank Jain, an In-Stat analyst. "Thus, by 2010, India will have the entire semiconductor industry in place, and will be in the reckoning among other Asian semiconductor manufacturing countries."

In-Stat's research shows that the IC market in India hit $1.18 billion in 2005 and will reach $3.09 billion by 2010. Currently, TV sets consume the most ICs, but by 2010, communications should be the top semiconductor consumer. Along with China, India is the region's fastest growing market for cell phones.

So far, the Indian semiconductor industry has been frustrated by attempts to set up an entire IC food chain, especially a fab. Indian IC executives say the government has not penned a detailed policy on the benefits of IC manufacturing in India, including a set of tax breaks, subsidies and the possibility of equity stakes taken being taken by government institutions. Reports have indicated that the government is unsure of the benefits of subsidizing large-scale fabs in India.

The only project to gain momentum in India is SemIndia, a $3 billion undertaking that calls first for a packaging facility and then a series of 200- and 300mm wafer facilities to make chips for cell phones, PCs, STBs, and other consumer and industrial electronics. The facility would largely focus on exports, but also seek to meet growing domestic demand. Work has begun on the packaging plant, but a schedule for the chip plants is still uncertain.

- Mike Clendenin
EE Times

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