Fri, 22 Feb 2013 13:27:19 GMT | By The Hindu Business Line/ Vinay Shenoy

Chips are down for electronics industry

The local electronics and semiconductor design industry should try to develop solutions for the solar and wind farm industries, which are still in the embryonic stages

Chips are down for electronics industry (© Reuters)

The $3-billion global electronics hardware industry is significant both for its size and the number of people it employs all over the world. Electronics components (including semiconductors, printed circuit boards, etc.) constitute over 44 per cent of the total inputs to this industry. The rest include materials such as metal (copper, aluminium, and steel), wood, paper, plastics, etc.

There is a high level of standardisation, formalisation and computerisation of the entire product development (computer-aided tools) and manufacturing process (enterprise resource planning tools for production planning, inventory and logistics control).

As a result, the entire value chain is modular and spread across the globe, further enabled by the ability to share and monitor end-to- end processes over the Internet.

India’s Advantage

The Indian software and semiconductor design industry gained predominantly due to this. Initially, multinational captive design centres led its moderate growth. Since the mid-1990s, Indian local services companies, in addition, have stepped up the sector’s development to reach a size of nearly 20,000 semiconductor design engineers. Most of these engineers contribute to global products driven from the headquarters located outside India.

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