BV Mahalakshmi, June 22, 2009
The Financial Express
According to iSuppli’s global semiconductor rankings for 2008, majority of the industry’s leading companies saw significant sales declines. Many of these suppliers are focused on semiconductor segments that performed poorly during the year, including memory, digital signal processors (DSPs), analog integrated circuits (ICs) and standard logic. This caused 80 percent of the top 10 and 60 percent of the top 25 semiconductor suppliers to experience declining revenues last year, compared to 2007.
Not surprising, the sentiment echoed by the Indian semiconductor industry is subdued yet optimistic. “In spite of the global slowdown, things are looking relatively better for the Indian domestic semiconductor market. The industry has got mixed feelings in its growth bag hoping for a faster recovery,” says Poornima Shenoy, president, ISA.
“To build and sustain momentum, we are seeing companies in the semiconductor industry adopt shorter product life cycles, improve operational efficiencies, shared services and consolidation initiatives, sales and marketing effectiveness, partnerships,” says Arsh Maini, director, Deloitte & Touche Consulting India. Confident that the Indian semiconductor industry is poised for a strong recovery, he feels the clear strengths of India lie in product design and technical support services, while new product development is still in its nascent stage.
Tell-tale signs of the slowdown still reverberate in the minds of most of the semiconductor players. Many feel it is too early to take a call whether the worst is over. Pradip K Dutta, corporate vice-president & MD, Synopsys (India) says, “There are some positive indicators coming from increased manufacturing capacity utilisation, but it could be due to the huge inventory depletion that had happened in the first calendar quarter of the year. The bottom could be here and we might be on a road to recovery, albeit slowly. Our prediction is that it would be well into 2011 before we can say that the industry is healthy again.”
Recalling the fallout of the economic downturn, Anil Gupta, MD, ARM Embedded Technologies (India) says, “The sales of one of the biggest selling products (by category)—the mobile phone—has dipped globally, an indication that consumers have become cautious in their spending. Although from an Indian perspective, we have seen greater than 10 million phones being sold per month this year. Good news is that sales of smartphones have gone up this year compared to last year.”
It is obvious to say that innovation will lead the growth. RamKumar Subramanian, vice-president (sales & marketing), AMD India, opines that virtualisation and security features will play an important role in future microprocessor designs. Current processors feature several hardware based virtualisation techniques that improve performance in virtual machines. “This trend will continue and we will see more innovative hardware-enabled virtualisation features in the future,” he adds.
According to Rahul Arya, marketing director, Cadence Design Systems (India), in a market driven by a growing consumer appetite for more functionalities and sophisticated products, semiconductor companies are moving quickly towards advanced node technologies at 65nm and below.
This leads to new levels of performance goals and integration of complex applications in system-on-chips (SoCs). Besides, semiconductor companies are also seeking new growth opportunities in the netbook market as consumers demand cost effective and high performing solutions, informs Ganesh Guruswamy, vice-president & country manager, Freescale Semiconductor India.
According to ISA, the semiconductor industry will suffer double-digit contraction in 2009, but lean inventories across the supply chain could jump-start a rapid recovery when the economy finally starts to improve.
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