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Microchip industry eyes defence

india Updated: Feb 05, 2007 18:54 IST
Ashok Das
Ashok Das
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The nation's semi-conductor industry is eyeing a big business opportunity in the urgent need to strengthen and modernise the nation’s defence capabilities  spurred by a rise in global terrorism.

The government says India's semi-conductor design industry is poised to reach a turnover of $43 bn in 2015 from $3.2 bn in 2005 and also turn away from a historical reliance.

Delivering the keynote address at a two-day Vision Summit of the India Semiconductor Association (ISA) in Hyderabad on Monday, Union Minister of State for Defence MM Pallam Raju said, "As the world order heads towards increasing usage of high-end electronics in security and surveillance, in weapons and missiles, in space and in network centric warfare, it will lead to significant developments in the sector that will spur the growth of the electronics and the semiconductor industry."

Raju said India’s electronic equipment consumption is expected to grow from $ 28.2 bn in 2005 to $363 bn in 2015 at a compounded annual growth rate (CAGR) of 30 per cent, with the semi-conductor content being around $36.3 bn.

He said that India’s electronic consumption as a percentage of global production is about 2.9 per cent in 2007 and is expected to grow to 11 per cent by 2015. 

The share of Indian electronics production, which was less than one percent in 2005, is expected to increase to 5 percent by 2015. The electronics equipment manufacturing in India is expected to grow at a rate that is 5.5 times the growth rate of the global industry between 2010 and 2015.

"For the semiconductor industry in India, this translates into 6.5 percent of global revenues (by 2015) as against two percent in 2007. With the growth of the market size as represented in these figures, the cost and opportunity benefits for companies in semi-conductor and embedded design are immense," he observed.

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