The Hindu Business Line : `Chip industry has scope to create 9 million jobs'

VISION SUMMIT: (From left) Ms Jodi Shelton, Executive Director of Fabless Semiconductors Association;, Mr R.K. Khare, CMD, Indus Edge; Ms Poornima Shenoy, President of the Indian Semiconductors Association; Dr Y.S. Rajasekhara Reddy, AP Chief Minister; Mr Debesh Das, Minister for IT, West Bengal; and Mr M.M. Pallam Raju, Union Minister of State for Defence. - P.V. Sivakumar

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Hyderabad Feb. 5 The Chairman of India Semiconductor Association (ISA), Mr Rajender Kumar Khare, said that the semiconductor industry could contribute to about one third of the total gross domestic produce by 2015 and employ about six-eight times that of IT sector provided this becomes a national priority.

While the semiconductor industry has the potential to create about nine million jobs by 2015, it could emerge 10 times larger than the IT industry now driven by what he described as the possibility of Indians becoming a nation of `electronic guzzlers.'

Speaking at the two-day Vision Summit hosted by the ISA here, Mr Khare said the per capita consumption of electronic goods in the country could potentially go up significantly as income levels too were spiralling. "With local consumption and manufacturing, we are in for a `Blue Revolution,' as represented in the electronic industry.

Cost escalation

The Executive Director of Fabless Semiconductor Association, Ms Jodi Shelton, said the semiconductor industry was witness to significant cost escalation, seeking innovative approaches in design and delivery. The industry is working on integration and management of third party intellectual property (IP) and has developed a sophisticated Web-based tool to manage IP.

Typically, fables companies require about $20-40 million to take a product to market and the costs continue to go up. Significantly, venture capital funding is moving away from semiconductor industries based in Silicon Valley and the US in general and decreased by about 80 per cent. It was about $1.7 billion in 2006.

"There continues to be a debate about the adoption of advanced technologies in the semiconductor industry. The semiconductor packing and supply chain industry is poised for growth and there is heightened investment due to increasing returns. The packing and supply chain have become a vibrant part of the semiconductor industry," she said.

Advantage India

"The platform and system design approach followed by Indian semiconductor companies has the potential to make inroads and it is here India has clear advantage over China. Interestingly, a new cluster development model where some companies come together and work has caught up," Ms Shelton said.

The Union Minister of State for Defence, Mr M.M. Pallam Raju, said the country's 400 million plus middle class and their growing income and their contribution to the sale of consumer electronics and IT and communication, is likely to have a cascading effect on the electronic design and manufacturing activities.

The Government has given in-principle clearance for the semiconductor policy and the subject is close to the Prime Minister. The Government was addressing this with utmost urgency, Mr Raju said.