eOdisha Summit 2014 - Odisha as an attractive... - Mr Sanjeev Keskar, Chairman, India

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  • 1. Opportunities in ESDM Sanjeev Keskar/ Chairman IESA IES IESA Confidential April 2013
  • 2. ESDM: A critical industry for India Potential for $400 Bn revenues in next 10 yrs • Industry with the largest growth potential • ESDM products are used across many sectors ESDM imports in India can exceed oil imports by 2017 • No domestic industry, despite having large talent pool & a large domestic market • Current base is only of low value-add manuf. ESDM manufacturing can become 10% of GDP • Currently it is <2% in India; In China >20% • Large potential to increase value-addition • Communication and Strategic Electronics are National Security & self reliance in defense & telecom key for protecting national security Can create over 20 Lac new jobs IES • Inclusive- since it will create high-end as well as manufacturing jobs IESA Confidential April 2013 2 2
  • 3. All Stakeholders are aligned.. Importance of ESDM industry is well understood • Government and Industry committed to growing this sector • Unprecedented opportunity to build a large industry • Leveraging India’s core strengths  Talent Pool + Domestic Market Supportive Government policies • 12th Five year Plan, National Telecom Policy 2012, National Electronics Policy 2012 (all released) • Preferential Market Access- PMA (notified) • Electronics Manufacturing Clusters (cabinet approved) • Innovation/R&D funding (in process) • Component eco-system, M-SIPS, India Semiconductor Fab (notified) • Fiscal incentives to overcome disability/handicap faced by domestic industry Industry is gearing up • Increased focus and investments happening IES IESA Confidential April 2013 3 3
  • 4. Understanding ESDM “Value-Chain” PRODUCT IDEA - INNOVATION • Betting on the right technology and standards, features • Innovative product design and architecture R&D, PRODUCT DESIGN (SYSTEM + HW + SW) 30-65% • Creation of IPR (Product IPR; Patents) • System design: Hardware, SW, FPGA/Silicon, Mechanics • Product design, development, testing/verification COMPONENTS • Silicon components • BarePCBs, Mechanicals, Cable Assemblies • Passive components, Electro-mechanicals 35-50% ASSEMBLY (SMT), TESTING IES • “Board stuffing”: automated; done by EMS or in-house • Testing, final assembly and Quality assurance • Logistics, Packing etc.Confidential April 2013 IESA 5-20% 4
  • 5. Top 20 Priority Electronic Product Markets – by TM Revenues (2013) Indian Electronics Market: Top 20 Products by TM Revenues (2013) Product Revenue % of Total Product Revenue % of Total Mobile Phones 38.85% Base Stations 1.61% FPD TV 7.91% Notebooks 5.54% Desktops Digital Camera 4.39% 2.73% Power Supplies Set Top Box Printes and FPDs Routers/Switches 1.28% 1.13% 1.06% 1.05% Inverters and UPS Memory cards and USB drives 4W EMS 2.65% Car Radio 1.02% 1.00% 0.66% LCD Monitors 2.02% Servers 1.72% Total of Top 10 Products 70.60% CFL Energy Meters Digital Instrument Clusters Smart Cards Total of Top 20 Products Mobile Phones Digital Camera LCD Monitors Set Top Box CFL 2013 Electronics Product TM = $50.61 B 2.46% 2.33% FPD TV Inverters and UPS Servers Printes and FPDs Energy Meters Notebooks Memory cards and USB drives Base Stations Routers/Switches Digital Instrument Clusters 0.58% 0.52% 80.52% Desktops 4W EMS Power Supplies Car Radio Smart Cards Source: ISA and Frost & Sullivan IES IESA Confidential April 2013 5
  • 6. Other Priority Products with Highest CAGR (till 2015) Indian Electronics Market: Top 5 Products by with Highest CAGR (till 2015) Automotive Electronics Industrial Electronics • LED Lighting (CAGR = 38%) • 2W Ignition (CAGR = 10%) Telecommunications IT/OA • PON, GPON ONT (CAGR = 120%) • Tablets (CAGR = 54%) • Payment Terminals (CAGR = 19%) All CAGR from 2012 to 2015. Source: ISA and Frost & Sullivan IES IESA Confidential April 2013 6
  • 7. Key Components and the Products in which they contribute significant proportion of the BoM Top Components across 25 Products IES Power devices/chips Processor Memory • Base Station • Inverter / UPS • GPON ONT • Mobile Phones Desktops • Tablets • Routers/Switches Terminals Set Top Box 2W Ignition Power Supplies Servers Payment • Server GPON ONT • Set Top Box Mobile Phones • Memory Cards/Drives Routers/Switches Instrument Cluster PCB • Set Top Box • Power Supply • Car Radio LCD Display • Mobile Phones • Tablets • Desktops Notebooks Payment Terminals Instrument Cluster 7
  • 8. Key factors causing disability in Indian ESDM industry International marketing cost (~1%) Poor infrastructure (0.5%–1.5%) Taxation related (3%–6%) Overall disability (7%–26%) Higher cost of finance (2%–14%) Poor domestic availability of components (3%–5%) IES Indian Electronic System Design and Manufacturing (ESDM) disability identification study IESA Confidential April 2013 8
  • 9. How to Build Domestic Eco System – SWOT Analysis of Top 25 products and 4 key components : These products contribute to > 80% of Total Market & 4 “A” category components for each products to > 50% of Bill of Material. So focus on 25*4 Strategy. – Address Manufacturing Disability for local players: • Inverted duty structure • Local component supplies. • Cost of Finance. – Facilitate Electronics Product Creation for MSME : ESDM Resource and Incubation Center in every state which will be a facility to convert Ideas to Prototype – Take Advantage of EMC , M – SIP and PMA policies. IES IESA Confidential April 2013 9
  • 10. Opportunities for Odisha State  Semiconductor content in a Electronic Product is around 15% to 20% , there is an opportunity in other components in Bill of Material for : PCB, Connectors, Transformers, Battery , Plastic, Passives ….which can be addressed by Small and Medium Industry.  Among all segment Industrial Electronics in one area where there is huge opportunity for SME sector to play big role in a applications like UPS / Inverter / LED Lighting/ Set top Box/ Security Systems / Power Supply……Electronics companies from Odisha to focus on these products.  There will be an opportunity for small EMS companies . IES
  • 11. IESA Focus Continue to work for Embedded Design companies in VLSI, Embedded S/W and H/W development. Work to promote local manufacturing Eco System by taking advantage of domestic demand and Govt. policies. To support Start ups and Entrepreneurs for Fabless design and Systems design. Contribute to create job opportunities in ESDM space. IES IESA Confidential April 2013 11
  • 12. THANK YOU IES IESA Confidential April 2013 12