Sunday, June 19, 2011

Semiconductor manufacturing industry in India needs a boost.

I am sharing one of my an article which has been published in Newspaper. Hope you will enjoy it.

THE INDIAN economy is expected to grow at 9 per cent in 2010-2011. Now the corporate world and finance minister have started a debate on how to reach a GDP growth of over 9.5 per cent. Finance minister Pranab Mukherjeeannounced a good budget for the corporate world; he tried really hard to benefit everyone. It is in the second part of the budget that the common man has not got any more relaxation from the budget.

The Indian market and the Indian GDP depend heavily on outsourcing. Indian companies are best for outsourcing servicing, like Infosys is a leading technology provider in India. Infosys provides a complete range of services by leveraging to other foreign companies. But the Indian market is unable to make a name for itself in the manufacturing area and if Indians companies try to start and get in the market, there is no future because the customer always goes for the brand name and value. The best suited example for this is the semiconductor manufacturing companies in the country.

The world’s semiconductor manufacturing hub is not limited to one company. In the early 1960, USA was the hub for manufacturing for semiconductor; then the hub had relocated to Japan in the 1980s, then in the 1990s it moved to Taiwan, Singapore and Korea. All these past and present hubs have registered a severe reversal since 2000.

There is a constant price pressure on the semi-conductor industry due to globalization. These companies move to other countries for the outsourcing. The Indian market has not yet been able to establish itself in the semi-conductor manufacturing industry owing to various factors like obsolete technology. On the contrary, they prefer to serve the outsourced verification and testing projects or do body shopping.

The Western market treats Indian market as an outsourcing destination instead of a technology developer. In India, the gap between the top notch universities and industry is widening, as Indian companies are looking for services for quick money than investing in new technology development. Whereas, in the West, universities and industries go hand in hand, contrary to the process in India, where professors from top colleges are becoming inactive in industry forums, as a result of, which the gap between universities and industry is increasing. This, in turn, retards the quality of education in the universities.

With two-third of young blood flowing in India, we strive to serve the developed countries and like to call ourselves as a developing country. The Indian market has failed to produce bright opportunities for youth and highly educated engineers and doctors moves towards other countries. This is called brain drain.

Presently, the Indian semiconductor industry is struggling to find talented people to design new inventions. They have been limited to the IIT’s and the IISC (Bengaluru), which get funded by MNC’s to do research for them. Indian conglomerates such as Infosys, Wipro, Tata Elxsi, Mindtree and other top notch companies which lead the Indian IT field are service based companies also gave this industry a miss.

Above listed companies serve other US and European based MNC’s such as Freescale, ST microelectronics, Intel, AMD, Texas Instruments, Analog Devices, ST-Ericson, NXP and others for the same. With government supporting new ventures in these sectors and with more packages, it’s surprising that none of these big wigs are attempting it.

If the Indian government gives subsidy to new technology like semi- conductor manufacturing industries, then it directly helps ours GDP growth and brings employment to the country. Government has to open doors for new company and give chance them to become self dependent in designing new inventions. Now, it is a risk for small companies to set up semiconductor manufacturing market in the India.

Semiconductor has a huge market in the world. The market value of semiconductor has grown to be $ 300 billion today, USA and South Korea are doing really well in this field and the talent of India goes to USA because in India there is not dazzling opportunity for them.