IESA releases ELECTRONICS SYSTEM DESIGN & MANUFACTURING (ESDM) Report 2020

• Report to serve as a catalyst for ‘Make in India’ for the World
• Electronics production has the potential to reach up to US$260 Bn & generate ~1Cr jobs providing an alternate source of employment to IT sector
• Proposed creation of $1Bn billion ESDM Innovation fund

Bangalore, March 30, 2020 – India Electronics and Semiconductor Association (IESA), the premier Industry Body committed to the development of a vibrant Indian Electronics System Design and Manufacturing (ESDM) ecosystem and evangelizing the dream of ‘Make in India’ a reality has released the ESDM report today in collaboration with Frost & Sullivan. The report aims to provide definitive strategic direction to the ESDM ecosystem by assessing the current trends and providing strategic advice to accelerate growth and local value addition.

As a voice of the industry, IESA has been at the forefront in highlighting the heavy import bill in the ESDM sector and need to building strength in the domestic manufacturing value chain – with the focus to develop scale of domestic design and manufacturing companies. India’s dependency on imports for its electronic product needs, from smart phones to super computers has seen an exponential rise. IESA presented the ESDM report today, to capture the current status, map the trends and create opportunities to work closely with the industry, government and research institutes to promote electronics products & manufacturing in India.

The current COVID-19 crisis has again highlighted the need to have a strong and robust electronics research and manufacturing ecosystem in the country as intelligent electronics forms the backbone of all strategic sectors like healthcare, security, defence, transportation, financial inclusion and agriculture etc.

The key sectors covered in the report include Electronics Product Market, Electronics Component Market, Electronics Design Market, Electronic Systems Market and Electronics Manufacturing Services Market. The product segments that were looked at are Mobile Phones, Notebooks, CCTVs, FPD TVs, Led Lighting, Engine Control Unit, Gigabit Passive Optical Networks (GPON) & Energy Meters/ Smart Meters.

The key findings of the report:

• Electronics Market is a sunshine market. Indian market has grown at a CAGR of 14% from 2016-19 and is expected to accelerate at a CAGR of 16.6% between 2020-25.
• Electronics production currently contributes 3.3% to the economy. It will grow to US$320 Bn by 2025. With additional measures, It has potential to reach US$410 Bn, which will be 8.2% of US$ 5Tn India’s GDP target by 2025
• Boost in ESDM manufacturing as a result of the massive capacity expansion can generate 1cr jobs providing an alternate source of employment to IT sector
• Currently 50% of US$134 Bn of total Electronics products Demand is imported. By 2025, the total product Demand will reach to US$368 Bn, however, import can reduce to 29%, saving US$76 Bn of foreign exchange
• IESA has set an ambitious target to play a catalyst in incubating 1000 Electronics Product and Fabless start-ups which will create 1,000 IPRs, generate business worth INR 1,000 crore and create 10 lakh jobs over next five years.

Jitendra Chaddah (JC), Chairman, IESA & Senior Director, Strategy & Operations, Intel India added, “With the goal of making India a hub for Electronics Design and Manufacturing, IESA has been working with the government, academia and industry players to suggest, influence and execute multiple strategies for the electronics and semiconductor industry. The IESA ESDM 2020 report is an attempt to project the needs of the electronics market and the steps to be taken to meet the demand and growth of the industry. The demand for electronics products is fast growing in the country and this sector will contribute significantly to the country’s GDP and the digital economy. The report underlines the importance of strengthening the design capabilities through research and IP development, promoting innovation in electronics product development across states in India, and enhancing value addition in the electronics manufacturing, through incentives.”

While presenting the ESDM report, Dr. Satya Gupta, Vice Chairman, IESA & CEO, Seedeyas Innovation said, “A strong partnership between industry and government is vital, in creating an ecosystem for the fabless start-ups and electronics products companies. This should not just focus on the indigenous market and substitute imports but focus on driving exports by the next five years. We are proposing the creation of $1Bn billion ESDM Innovation fund, move to high-value manufacturing through global partnerships and creation of the National Institute for Semiconductor & Electronics Research (NISER). We are envisaging the creation of National Electronics Mission on the similar lines of ISRO for spearheading all these activities and for making India a design led manufacturing hub for the world.”

Key Strategic Recommendations

• The Industry has the potential to
  1. Increase GDP contribution from present 3.4% to 8.2% in 2025
  2. Create 1Cr Job Opportunities (Direct & Indirect)
  3. $60B – $100B Reduction of imports
  4. Creation of Electronics Products for New Use Cases
     • Medical, Agriculture, Defense, 5G or 6G, AI-ML, Automation, EV
  5. Convert Semiconductor Design Talent to Fabless Product Companies
• Recommendations:
  1. Incentivize Training, Internship, IP Creation by Design Companies
  2. Create $1B seed fund for 1K-10K-100K Start-up Program
     • 100 Fabless companies; 900 Electronics Product Companies
     • Geographic Inclusion of all States & UTs for Innovation in Electronics
  3. Incentivize Setting up ATMP, Display, LED & Power Electronics Fab
  4. Make PLI Incentives link to Percentage of Domestic Value add
  5. Setup National Institute of Semiconductor & Electronics Research (NISER)
     • On the Lines of IMEC, Belgium
  6. Creation of National Electronics Mission: On the lines of ISRO