Electronic Hardware Sector

AGENDA
Electronic Hardware : Global scenario
Electronic Hardware : Indian scenario
Electronic Hardware : Tamil Nadu scenario
Investment opportunities
Government Support

Electronic Hardware: Global Scenario

The Global Electronic Hardware industry is valued at around USD 2 trillion and is one of
the largest and fastest growing manufacturing industries in the world.
60%

World electronic industry production by region

50%

52.%

42%

40%
30%
20%

18%

15%
6.2%

10%

22%

18.7%

52%
14.9%
8.3%

19%

3%

15%

6%

8%

0%
Japan

North America

Europe
2008

2011

Asia pacific

Rest of the World

2013

The production of electronic products has shown a change in trend from the developed
economies to the countries in the Asia-pacific Region.

Communication equipment, Computers and peripherals and Consumer

electronics are the top three sub-sectors contributing to the world
electronic industry production.
Share of different segments in world electronics
Other
production (FY13)
Instruments
8%

Automotive
Electronics
7%

Industrial
Electronics
9%

Communication
equipment
27%

Consumer
Electronics
13%
Strategic
Electronics(Go
vt/military)
9%

Electronic
components
2%

Computers and
Peripherals
25%

Indias share in the world production

is only 1.5%. Hence a lower
penetration of these subsectors
represents Indias immense potential
for the growth of the industry both
on the domestic as well as the
international front.

Semiconductor Industry An Upcoming Industry In India

Market for semiconductors across different industries
The major semi-conductor end-user segments
have been identified as communications, IT and
consumer electronics.

1647.6
484.7

Commercial electronics

24,297.20

Telecommunications

The main categories that are expected to drive

the semiconductor market in India are semiconductor designs , microprocessors, analogue
devices, memory chips, discreet circuits and
Application- Specific Integrated Circuits (ASIC).

7980.8

IT hardware and office

automation

2015(Estimated)

6960
2610

2010

1529.5
791.1

Electronics and durables

459.5
240.2

Automobiles
0

10000
20000
USD Million

30000

The Semiconductor industry is expected to register a CAGR of 27% by 2020

Growth of the Semiconductor industry in USD billion

Electronics Exports by sub-sector, % to total exports

100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%

60
34%
46%

37%

36%

46%

52.58

50

40
8% 5%

39%

30

30%

43%

37%
29%

20

10.02

7%

5%
13%

14%

12%

8%

12%

3%
11%

2007-08

2008-09

2009-10

2010-11

3%

Electronic Components
Communication and Broadcast Equipments
Computer Hardware
Industrial Electronics
Consumer Electronics

5%
13% 3%
2011-12

10
0
2013

2020

Government Support
Encouragement to FDI, SEZs

100% FDI is permitted in the electronics hardware manufacturing sector under the automatic route
100% income tax exemption to SEZ units on export profits for five years, 50% for the next five years

National Policy on Electronics

(2012)

Government approved the National Policy on Electronics (2012) with an ambitious target of reaching a market size of USD400 billion by
2020 and creating indigenous manufacturing of USD 320 billion
It aims to set up 200 manufacturing hubs across the country with an investment of USD100 billion to meet demand expectations
The policy also focuses on raising exports to USD80 billion by 2020

MSIPS

25% of capital expenditure if the ESDM unit is in non-SEZ and 20 % of capital expenditure if the ESDM unit is within SEZ. This capex
subsidy is available for investments made within 10 years from the date of approval of the project.
Reimbursement of CVD/excise on capital equipment for non-SEZ units.
Reimbursement of central taxes and duties (like custom duties, excise duties and service tax) for 10 years in select high- tech units like
fabs, Semiconductor Logic and Memory chips, LCD fabrication.

Electronics Manufacturing
Clusters (EMC) Scheme

For Greenfield EMCs: Financial assistance of 50% of the project cost subject to a ceiling of Rs. 50 crore for every 100 acres of land
For Brownfield EMCs: Financial assistance of 75% of the project cost subject to a ceiling of Rs. 50 crore.

Electronic Hardware
Technology Park (EHTP)
Schemes

An EHTP unit may import free of duty all types of goods, including capital goods as required by it for manufacture, services, production
and processing
EHTP provides benefits, such as duty waivers and tax incentives, to companies which replace certain imports with local manufacturing.

Semiconductor Policy

Special incentives have been designed to attract investments for setting up semiconductor fabrication and other micro and
nanotechnology manufacturing industries.
The government has provided two options for setting up a project. For setting up Semiconductor Fabrication Units and Eco System units
in SEZ's the government will fund 20% of the capital expenditure and for non SEZ's 25%+exemption from ( Countervailing Duty ) CVD .

Electronic Hardware: Tamil Nadu

Tamil Nadu is the 3rd largest manufacturer of Electronic Hardware in India
Tamil Nadus contribution to the national electronic hardware output has increased from 10 % in 2008-09 to
14.6% in 2012-13.
2.60

2012-13

17.80

2.97

2011-12

16.96

2.46

2010-11

18.12

2.25

2009-10

16.80

1.35

2008-09

13.66
5

10
15
20
USD Billion
Total electronic hardware industry output of Tamil Nadu
Total electronic hardware industry output of India

Share of major subsectors in total electronic

hardware industrial output of Tamil Nadu
(2011-12)
others

Consumer 20%
Electronic
s
0.34%
Communic
ation
equipment
14%

Electronic
Component
s
25%
Computer
and
peripheral
equipment
41%

Tamil Nadus Competitive Advantage

The total investment in the electronic hardware industry in Tamil Nadu is 711 million USD
employing more than 40,000 workers in both organized and unorganized sector.
Major Players in Tamil Nadu
Product
Mobile handsets and Communication networks ,
Mobile handset Components , Keypads for Mobile
handsets
Electronic hardware and mobile phone components
Electronic Hardware
Electronic Consumer Durables
Computers
Semi-Conductor testing and packaging

Invested capital in USD Million

Major players

2008-09

200910

201011

201112

Computers
and
Peripheral
Equipment

77.6

97.3

119.5

140

Electronic
Components

153.1

456.0

252

242.8

Communicati
on
equipment

182.5

180

162.2

139.5

Consumer
Electronics

3.36

2.70

2.02

1.83

Industry

Tamil Nadu stands 1st in terms of Electronic exports in India

Exports of software and electronic goods have grown at a CAGR of 18% over the last 3 years.

Share of Top States in Electronic Hardware

Exports of India
0.96%

Gujarat

1.54%

Delhi

1.76%

Kerala

3%

Maharashtra

11350
USD Million

Andhra Pradesh

Export of Computer Software & Elec. Goods from

Tamil Nadu in USD million

12%

Uttar Pradesh

14%

Karnataka

12380

8870

17%

Tamil nadu

46%
0%

10%

20%

30%

40%

50%

2011-12

2012-13

2013-14

Existing Electronic Hardware SEZs in Tamil Nadu

Chennai

Sriperumbudur Hi Tech SEZ

Flextronics, Samsung ,
Motorola, DELL Computers,
TAPP Semi Conductor,
Natronics Semiconductor

Mahindra
World City
Krishnagiri

Kanchipuram
Salem

Tiruchirapalli

Oragadam Hi Tech SEZ

Sanmina , Moser Baer,
Signet Solar , Seimens
Networks , BYD China ,
Polymatech

Coimbatore
Madurai
Tirunelveli

Existing Electronic
clusters
Upcoming Electronic
Hardware clusters
Existing electronic
hardware SEZs

Tamil Nadu has over 23 Electronic Hardware Technological Parks

located in major IT centric Special Economic Zones(SEZs) of
Sriperumbudur,
Oragadam,
and
Mahindra
World
City.

Hi-Tech SEZ for the manufacture of Electronic/

Telecom Hardware and Support services (571 Acres)
Hi-Tech SEZ for Electronic Hardware and related
support services (348 Acres)
Mahindra World City

Upcoming Electronic Manufacturing Clusters in

Tamil Nadu
Coimbatore District, Tamil Nadu Electronic Industries
Association of India (ELCINA) plans to set up an EMC
in the District of Coimbatore in India under the name
Coimbatore City Electronics Cluster (ADD Industrial
Park) under the EMC scheme.
GMR Special Investment Region (GSKIR) is a
strategically planned project over 4300 acres near
Hosur, Krishnagiri. The EMC cluster of 527 acres and
has a multi-modal connectivity covering national
highways, State highways and railways.

Opportunities in Electronic Hardware Sector

Photovoltaic panels

Computer peripherals

Mobile handsets

Communication hardware
and networks

Semiconductors

Medical electronics

Additional Chief Secretary - Government of Tamil Nadu

Industries Department
Phone: 91-44-25671383 Fax: 91-44-25670822
Email: indsec@tn.gov.in, jsindgim@tn.gov.in
Nodal agency
Tamil Nadu Industrial Guidance and Export Promotion Bureau
19-A, Rukmini Lakshmipathy Road,
Egmore, Chennai-600 008
Phone: 91-44-2855 3118
Email: directorguidance@gmail.com

Visit us at www.tamilnadugim.com