Deepak Loomba, an entrepreneur based in Gandhinagar, is dreaming big. His venture, De Core Nanosemiconductors, already has one of the largest operational semiconductor manufacturing sites in South Asia and employs about 70 people. But this is just the beginning, he says. He reckons the growing stress on energy efficiency in India means a large and expanding domestic market for his venture. "India will be one of the largest consumers of LEDs in the world," says Loomba, referring to light emitting diodes, the latest in lighting.
B. Visweswaran, a 37-year-old Chennai-based entrepreneur is aiming high as well. A former Intel employee, his two-year-old startup Wysene provides solutions that streamline the power usage of industries in India. The firm's product tracks power drawn from the state grid and from newer sources such as solar panels and windmills. The companies then can tweak their production cycle to save power and costs. "Industries could shift power-intensive processes to off-peak time when electricity is cheaper and perhaps more regular," says Visweswaran, who has also worked out a product for homes.
Loomba and Visweswaran have many others for company. The exploding electronics market in India is catalysing the establishment of a range of diverse startups. According to several independent estimates, there are some 1,000 companies now operating in this market, scattered around the country. India's consumption of electronics, says a report commissioned by the Ministry of Communications and Information Technology, could grow almost tenfold in size in the next decade to a staggering $400 billion.
Today, electronics account for the second highest foreign exchange outgo after petroleum and its products, in India's import bill. This opens up umpteen opportunities for local designers and manufacturers. It is estimated that a fifth of India's Rs 927,969 crore trade deficit is from electronics.
In telecom alone, analysts say India requires imports of up to $50 billion yearly, with phone service firms spending half of their revenues on equipment imports. For example, in the $6-billion wireline telecom market, only half of the products are made locally. Or consider the wireless infrastructure: imports account for some 60 per cent of the $8-10 billion equipment procured annually.
Indian enterprises, including some of the biggest names in the business, have previously made unsuccessful attempts in electronics manufacturing but were stymied by a dormant local market and an unhelpful bureaucracy. Bharti, the Tatas (with Telco) and the Mahindras, have all made forays. But things appear different now, says the industry, with a booming domestic market. Beside cellphones, India is a leading market for televisions, VCD/CD players and other consumer electronic products. This opportunity could also generate four to five million jobs, many of them blue collar assembly and testing roles, according to the Indian Semiconductor Association, or ISA, the industry body.
The domestic market straddles diverse industries such as telecom, power, health care, defence and even entertainment. The evolving domestic electronics industry combines India's strength in software and newer skills in computer chip design along with some skills in hardware and semiconductor manufacturing.
The more the merrier. The people starting up, too, are diverse. For example, in a suburb in northern Bangalore, Sankara Reddy, who worked for 15 years at the Indian Institute of Science before turning entrepreneur, has started his latest venture, called Terminus Circuits. With a small team of just nine people now, he plans to develop a solution to provide wireless charging for consumer electronic products. "We want to use our intellectual property to build wirelessrouter-like charging stations," says Reddy.
At the other end, three 30-somethings, Arijit Datta, Soumen Basak and Shamik Datta, have co-founded DiSipher Design. The trio is targeting educational institutes with its iPintentio, a software platform that helps reduce the complexity of chip design for students and professionals. "A microchip is the culmination of a complex, and often, long set of processes," says Datta. DiSipher's founders think they have a winning idea at hand as India's chip designing and eventually manufacturing capabilities expand.
The potential in the electronics industry has also attracted the veterans of the information technology industry. For example, Anant Koppar, 51, an early employee of MphasiS (acquired by EDS in June 2006 for Rs 1,800 crore) and prior to that of Kshema Technologies (acquired by Mphasis for $21 million or Rs 94.5 crore), is now making a fresh bet. His latest venture, called KTwo Technology Solutions, wants to lean on India's expertise in electronics - strong in design and evolving prowess in manufacturing - to devise low-cost products for India's rural millions.
KTwo provides solutions to primary health centres to run basic diagnostic tests (for malaria, dengue and chikungunya) and monitor basic patient metrics such as blood pressure, heart rhythms and body temperature. Its products have been piloted in parts of Karnataka for the past 18 months. "India has a head start over China in back-end design," says Koppar.
Multinational companies, too, have woken up to the potential of India. Huawei, a Chinese telecom equipment giant, has announced a $2-billion investment in India. "India is a very important market," says Max Yang, its Managing Director in India. Huawei, whose Bangalore engineering centre is its largest outside China, has leading edge technology in mind. "Huawei will invest in developing the Indian market in terms of adopting the latest technologies such as 3G and wiMAX and developing India as a hub for training HR and sourcing," Max says.
Boutiques such as Shanghai-based Longcheer and ON Semiconductor are also betting big on India. Longcheer, which has designed mobiles for firms such as China Mobile, Haier and Lenovo, has set up a 30-people design centre at Noida, near capital New Delhi, to design phones for the local market. "India is the world's second-largest mobile phone market and is rapidly expanding," says Manu Nagar, CEO of Longcheer India. "We will cater to the design needs of domestic brands. Users are not satisfied with generic handsets and features that are available with global brands today."
On Semiconductor, a Phoenix, Arizona-based semiconductor supplier, recently opened its India centre and wants to join the likes of Huawei and Longcheer in tapping the opportunity here. It will focus on manufacturers of UPS and inverters, energy meters and LED lighting.