Telecom to lead semiconductor business in India

New Delhi, Aug 31 (UNI) With the ongoing boom in the telecom sector, the 2.69 billion dollar semiconductor industry will receive a boost to touch 5.49 billion dollar revenue by 2009, growing at a CAGR of 26.7 per cent.

''The fastest growing telecom industry in the world, will play a major role in the growth of the sewmiconductor business in the world,'' said Frost and Sullivan Managing Director (South Asia and Middle East) Anand Rangachary.

The total available market (TAM) revenues are estimated to touch 3.18 billion dollars by 2009 from the current 1.26 billion dollars in 2006.

TAM indicates the consumption of semiconductors in the country through local purchase order, manufacturing of end-user products and assembly activity in form of CKD assembling.

Currently, the telecom sector has a 21.2 per cent share in TAM compared to 45.2 per cent of the IT and OA segment. Telecom's share is expected to increase to 41.1 per cent while that of IT and OA will dwindle to 32.4 per cent in 2009.

Factors like dynamic technologies, consumer preferences and declining costs are playing a positive role in the generation of higher revenues from the telecom segment. ''Mobile handsets are anticipated to be the largest contributor to the telecom semiconductor TAM revenues by 2009,'' Mr Rangachary said.

Talking about the business in the Asian region, he said China still remains a top choice for the companies. ''The lack of proper infrastructure and flexible policies has acted as a deterrant to many international MNCs to set up base here.'' The Minister of State for Industries Ashwani Kumar also reiterated the fact that the country is in dire need for a conducive policy for the industry.

''Engagement with the government is important and the protection of intellectual property, while giving the companies a profitable market, will act as a boon to the industry,'' Dr Kumar said.

The telecom sector is expected to provide a CAGR of 69.6 per cent to the industry, with the BTS lines capacity expected to touch 51 million in 2009, riding on the increase in subscriber base.

The emerging technologies, such as WiMax and VoIP will also help the momentum of growth.

Currently, India contributes a mere 4.4 billion to the 310.7 billion dollar global semiconductor industry. This is expected to grow to 5.5 billion dollars by 2009, while the global revenues are expected to touch 338.6 billion dollars.

UNI