Electronic equipment production in India to reach $32 billion by 2011: Gartner

The total electronic equipment production in India will reach $32 billion in 2011, compared to $14 billion in 2006, a compound annual growth rate (CAGR) of 18 per cent, says IT research and advisory company Gartner Inc.

>Semiconductor consumption in India will more than double from $2.8 billion in 2006 to $7.2 billion in 2011. The growth in electronic equipment production is being bolstered by the rapidly growing demand for electronics equipments in India.

Gartner classifies electronic equipments across six broad categories: communications electronics, data-processing electronics equipment, consumer electronics, industrial electronics, automotive electronics and military / civil aerospace electronics.

In 2006, the consumer electronics equipment segment held the No.1 position with 39 per cent share of the overall electronic equipment production in India. The segment is primarily driven by analog cathode ray tube (CRT) TVs and other audio and video equipment, including cassette tape recorders and players, and black-and-white television sets. It also includes electronic appliances like microwave ovens, washing machines, air-conditioners and calculators.

>The communications electronics and data processing electronics segment held the no.2 and no.3 positions respectively with 38 per cent and 12 per cent of the overall electronic equipment production in India, during 2006.

Ganesh Ramamoorthy, principal research analyst at Gartner, says, "As local manufacturing of electronics grows to keep pace with the increasing demand, semiconductor consumption will also grow at a healthy rate. Semiconductor vendors and original equipment manufacturers (OEMs) should therefore fine-tune their local sales and manufacturing strategies and better position themselves to address the needs of the domestic market."

• In terms of the semiconductor total available market (TAM) in 2006, the communications electronics segment held the No.1 position with 46 per cent of the TAM, driven primarily by the increased production of mobile phones.
• Data-processing electronics segment ranked second accounting for 24 per cent of the semiconductor TAM, driven by the desktop and mobile PC assembling segment.
• In third position, the consumer electronics segment, which accounted for 22 per cent of semiconductor TAM was driven by the manufacture of analog CRT colour TVs and other audio-video equipment.

>"The growing domestic demand for electronic equipment, coupled with other favourable factors like low labor costs, large talent pool and various recent policy moves by government of India, including fiscal incentives for local hi-tech manufacturing, global electronic equipment manufacturers are finding India an attractive electronics manufacturing investment destination. This augurs well for the local electronics industry and aids the growth of semiconductor consumption in India", Ramamoorthy added.

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