Electronic System

Design &
Manufacturing
Global Electronic System
Design & Manufacturing
 Global Scenario

 Revenue from electronic industry in 2018

amounts to US$395.4 billion
 ESDM market value in 2018 amounts to
US$301 billion
 Annual growth in FY 2012-17 was 2.4%
 North America & Europe (combined)
contributed 59% to total electronics market
in the world
Largest &
Fastest  Compound annual growth rate (CAGR) in
Growing FY 2017 was 7.7%
Industry in the
World http://policy.electronicsb2b.com/industry/electronics-
manufacturing-industry-overview/
https://www.eletimes.com/global-electronics-components-market-
sees-growth-7-7-cagr

Value Chain

Original Distributor Value

Supply Base Equipment and retail Addition
Manufacturers channels Services

Includes
Consists of Responsible several
Consists of activities that
semiconductor for the final distributor
fabricators, electronic add value to
and channel final products
component product partners,
manufacturers, assembly for outside of the
retailers and manufacturing
sub-assembly various the end
manufacturers market process
customers. related to
along with the segments
raw material research, new
suppliers product
development,

3
 Global Highlights

Growth rate for Global Electronic Industry from 2016-2018 (Percentage)

5%
4%
3%
2%
1%
0%
2016 2017 2018

World(Total) Europe Americas Asia Australia/NZ/SA

Source: https://www.statista.com/statistics/268396/estimated- Key Countries

growth-rates-for-the-electronics-industry-by-region/

Sub Segments of ESDM Industry

Semi
Electronic Electronic China Japan
Products Components
Conductor USA
Design
Key Industries

Electronic Semi
Equipment
Manufacturing Conductor
Manufacturing
Services Fabrication

Top Trends in Electronic Industry

Product Design
Outsourcing

Robotics and
Automation

Virtual Reality in Electronic

Manufacturing

4
Electronic System Design &
Manufacturing in India
 India Scenario

►Largest growing electronics market in the world

►3rd largest pool of scientists in the world
►Industry size is expected to reach US $2.4 trillion by
2020
► Current Market value is approximately US $70 billion Largest Hub
►Compound Annual Growth Rate-14% & value of CAGR- for Semi
US $24.66 billion in FY 2017 Conductor
►Revenue from Chip Design Service-US $ 2 billion Design
►Electronic exports from India reaches US $ 5.7 billion in
FY 16

Source: http://www.makeinindia.com/sector/electronic-systems

Cumulative FDI Inflows to Electronics Sector (FY17) in USD Billion

1.64 1.72
1.49
1.34
1.16 1.19
0.8 0.89

2010 2011 2012 2013 2014 2015 2016 2017

National Policy on
Electronics- Goals of 2020
► Attract an Investment of US $ 100 billion
► Reach a turnover of US $ 400 billion
► Create Employment for 28 million
person
► Increase Exports from US $ 8 billion to
US $ 80 billion
Source: http://meity.gov.in/esdm

6
 India Highlights

.1980s-
1984-1990
Gloden Period Introductory
Late 2005 1991-2005 Stage
Liberalisati ► Rapid &
Growth Era on Era ► Closed Market
continuous
► Increase in ► Decline in growth. ► Development
high end custom of transistors
electric ► Digital
product
tariffs Exchange & radios, Black & 1
developments white TVs
► Elimination
► Cumulative
FDI inflow
of duties in Colour TVs 2
into
electronic
3
sector
4 Evolution
of Indian
Electronic
Sector

TECHNOLOGY
DRIVERS

Computer TV CD
Webcam USB

Hard disk
Media player Router
Floppy laptop

Camera Printer Phone IPod

CCTV camera

7
 Reason to Invest

(EMS) industry is
Largest pool expected to be a
significant
of Technicians contributor to the
entire industry’s
development

Strong design and

R&D capabilities in
auto electronics
and industrial
electronics

Electronics India B2B

Platform, helps
technology players to
explore synergetic
partners for
Electronic exports from India technology transfer
(USD billion) and joint ventures

8.9 9.1
8.1 Major
7.7 government
6.1 initiatives like
5.5 5.7 Digital India and
Make in India and
supportive
policies including
favorable FDI
policies
Promoting
development of
electronics
manufacturing
clusters in the
country to provide
world class
infrastructure and
facilities

8
 Policy Framework

FDI Policy
►100% FDI is allowed under automatic route & all
regulation & laws are applicable

►FDI up to 49% is allowed for defense items under

automatic route, Above 49% requires Govt. approval

Sector Policy

►Develop an ecosystem for the sector in the

country by attracting investment and generate
employment for people at various levels.
►Create a globally competitive ESDM industry to
National Policy On meet the country’s needs and serve the
Electronics (NPE) international market

►Preference for domestically manufactured

Preferential Market electronic products in Government procurement
Access ►Electronic products shall have minimum 25%
domestic value-addition in terms of Bill of
Material (BoM)
Information
Technology
Investment Regions ►Semiconductor Wafer Fabrication (FAB)
(ITIR) manufacturing facilities being set up in India in
Uttar Pradesh and Gujarat
►Electronic Sector Skills Council and Telecom
Sector Skills Council are set up for establishing
an effective and efficient ecosystem for
developing ESDM sector

9
 India Highlights
Provisions of 2016-2017 Union Budget

► Dispensation allowed for ► Custom (Import of Goods at

mobile handsets/ tablet Concessional Rate of Duty for
computers & specified Manufacture of Excise) Rule
electronic equipment. 1996 is substituted with
► Charges excise duty of 4% custom rules 2016 to simplify
(without input tax credit) while the rules
Countervailing Duty (CVD) on Extension ► Exemption of duty for
of
differential Simplification
imports shall be 12.5% importer/manufacturer
excise duty of Customs

► Support for creation of world-

class infrastructure ► Customs Duty & Central
► Assistance for the projects in Excise Duty Exemption for
Greenfield Electronics import/Purchase of raw
Manufacturing Clusters is material & flat copper wire for
restricted to 50% & Brownfield Electronic manufacture of Solar Photo
EMC 75% manufactur Voltaic Cells or modules.
Concessional
ing clusters Duty
(EMC)

Foreign Investors

10
► Key Companies
in India

11
Electronic System Design &
Manufacturing in Karnataka
 Karnataka’s Unique Advantages

Global Hub for

R&D
Operations

► Country’s preferred destination for Exports to US $ 80 Billion

investment in Electronic System
by 2020
Design & Manufacturing
► Contributes 63.5% of total Exports
► Ranks largest among the contributors
of Electronic Industry
► Growth Rate-18% Compound Annual
Growth Rate (CAGR)
► Among the top five states contributing
to country’s electronic industry
► Major electronic hardware clusters &
Designing companies
► 10% contribution to country’s electronic
industrial output
► 85+ Chip designing houses & 3000+
skilled people

CAGR 8.66%
58.9 60.5 62.7

23.1 28.2 28.7 29.5

Electronics export from
Karnataka (US $ Billion)

Source: IBEF

13
 Karnataka Highlights

Reasons to Invest

R&D
1234
Large number
of High End

Organizations
Provides
Venture Capital
to Semi
Conductor
Low cost
Skilled/Technical
Manpower
Best Place to
live & work for
Expatriates

Companies

Clusters of ESDM Sector

BIDAR

KALABURAGI
Brown Field
Cluster VIJAYAPURA Green Field clusters @
YADGIR
facilitation Vasantanaraspura
Centre phase, New destination
BELAGAVI
BAGALKOTE RAICHURU for promotion of
electronic & hardware
industry-Tumukur
New Destination for DHARWAD/ KOPPAL
promotion of HUBBALLI
Green Field cluster at
electronic & GADAG Sira
BALLARI
hardware industry
UTTARA HAVERI
KANNADA
DAVANAGERE Hardware Park
at Devanahalli
CHITRADURGA
SHIVAMOGGA
Brown field ESDM
CHIKKABALLAPURA
cluster facilitation
UDUPI CHIKKA TUMAKURU
MAGALURU centre @
BENGALURU KOLAR Electronic City,
HASSAN RURAL
DAKSHINA Bangalore
KANNADA BENGALURU
MANDYA URBAN
Brown Field ESDM
New Destination for
KODAGU MYSURU
RAMANAGARA Cluster Facilitation
promotion of electronic
CHAMARAJANAGARA
Centre, New
& hardware industry
destination for
(Mangaluru)
promotion of electronic
& hardware industry

14
14
 Karnataka Highlights

ESDM Vision

 Create a globally competitive electronics design

70% of chip
designers in and manufacturing (ESDM) industry to meet the
India are found country's needs and serve the international
in Bengaluru
city market.
 Achieve global leadership in VLSI, chip design
and other frontier technical areas with a
turnover of US $ 55 Billion by 2020.
 Increase export in ESDM sector from USD 5.5
Billion to US $ 80 Billion by 2020

ESDM Policy Features

 Preferential market access for KSEDM companies

 Funding for Semiconductor IP & Fabless Chip design
1st state to  Set up ESDM innovation centre & high class ESDM
roll out clusters
ESDM skill
development
 Promote innovation in the ESDM sector, by way of
program recognition & grants.
 Export Incentives to avail duty drawback
 Fiscal Incentives and concessions as per ESDM
policy

15
Electronic System Design & Manufacturing
Policy 2013
Promotional Initiatives under the ESDM Policy

01 02 03
Setting-up of ESDM Semiconductor IP Electronics
Innovation Centres and Fables Chip Manufacturing
To provide complete
Design fund Clusters
infrastructure to Provide funding to Promote creation of high-
entrepreneurs and Karnataka ESDM class (EMC) to provide
companies to take companies for their start- world-class infrastructure
product concept and up, growth and facilities to attract
implement a working debt/working capital need investment. encourage
prototype private sector in a PPP
mode
.
.

04 05 06
Establishing Innovation Preferential Market
“Karnataka Brand” Promotion Access (PMA) Policy
Globally Promote innovation PAM shall be given to
State shall work with the through awards by “Karnataka ESDM
external affairs ministry to grants, best innovations companies” for the ESDM
conduct road shows for will be selected by the products procured by all
foreign ambassadors to Screening Committee government departments
pro-actively invite comprising of Industry of Karnataka
investments into the state and academia
representatives

16
Electronic System Design & Manufacturing
Policy 2013
Post-performance incentives and subsidies

01 02 03
Incentives for Marketing incentives
Patents and IPR to ESDM companies
Export Incentives
High-value-added
to Expand
manufacturing requires International Formulation of ‘Duty
creation of (IPR) which Markets Drawback Scheme’ in
needs to be protected in respect of State Taxes to
Provides reimbursements overcome the large
the form of patents.
of 50% of the actual costs disability faced by the
Activity needs to be
(including travel) incurred industry against global
actively encouraged so
in international marketing, competitors
Karnataka becomes a
sales promotion, trade
leader in IPR and
show participation,
knowledge economy
webinars, market
research etc.

04 05 06
Deemed Export R&D Grant Incentive for Capital
Incentives (for Encourage R&D
Investment in ESDM
domestic sales) investments to create a Sector
Units will be eligible for an culture of innovation To attract investments
incentive in the form of and IPR. Provide R&D Government will provide
interest free loan, grants in the form of up to 10 % capital subsidy
domestic sales outside reimbursement up to or Rs.5 Crores,
Karnataka (inter-state 20% of the actual R&D (whichever is lower) to
sales),the State will expenses companies. Its a strong
reimburse pull factor for investors to
set up their R&D and/or
high-tech manufacturing
facilities within the State

17
 Nava Karnataka Vision 2025

Build a prosperous Karnataka through

Vision
Inclusive, Sustainable & Balanced
Industrial Development thereby creating
large employment opportunity

Enhance the
contribution of  Promote global OMEs into the cluster for focused
manufacturing development of tier 1 7 tier 2 ancillaries
sector to the  Re-engineer policies & directives to support wide
state GDP from spread manufacturing growth in the state
present level of
16.7% to 20%

• Explore innovation models to promote Employment

entrepreneurs who can provide services to opportunity for 15
lakh persons in
industry & locals
core
• Sector aligned vocation courses for youth manufacturing,
pharma,&
healthcare

Build Strong • Create top five clusters for manufacturing beyond

Public Private Bengaluru, Hubballi, Tumkur, Mangalore &
Partnership in Shimoga
manufacturing
sector to achieve • PPP model for infrastructure projects in tier 1 &
high growth & tier 2 cities to provide world class infrastructure
attract more for top five smart cities
investment

• Paperless approvals & online process without

Improve Ease of
repetitive submission & referrals to departments
Doing Business
• Timely feedback & customer satisfaction survey ranking- Top the
rom industry & inter dependent stakeholders ranking chart

• Cluster development approach can enhance the

productivity, competitiveness as well as capacity
Increase building of MSMEs
focus on
MSME’s • Encourage the use of renewable energy to mitigate
power storage issues in small industries

18
Key Companies
in Karnataka

19
Additional Chief Secretary to Commissioner for Industrial
Government Development and
Commerce & Industries Director of Industries & Commerce
2nd Floor, Khanija Bhavan, No.49,Race
Department Course Road, Bangaluru 560 001
106, 1st Floor, Vikasa Soudha,
Ph : 91-80-2238 6796,
Bangaluru 560 001
Email:
Email: acscikar@gmail.com
commissioner@karnatakaindustry.gov.in

Managing Director Chief Executive Officer

Karnataka Udyog Mitra Invest Karnataka Forum
3rd Floor, East Wing, Khanija Bhavan, 3rd Floor, East Wing, Khanija Bhavan,
Race Course Road, Race Course Road,
Bengaluru – 560 001 Bengaluru – 560 001
Phone : 91-80-2228 2392 Phone : 91-80-2228 2392
Email: md@kumbangalore.com Email: ceo@investkarnataka.co.in

Principal Secretary to the Government

Dept. Of Information Technology, ,
Biotechnology and Science & Technology
VI Floor, 5th Stage, M.S.Building, Ambedkar
Veedhi,
Bangalore – 5​60 001
Ph.: 91-80-22280562, 22032434
Email ID: itsec@bangaloreitbt.in
itbtsec@gmail.com
itbtsec@karnataka.gov.in

Contact Details

20