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Thursday, Feb 19, 2004

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Info-Tech - Interview

STMicro upbeat on India market, skill pool

V. Rishi Kumar

Mr. Pasquale Pistorio, President and CEO, STMicro

Hyderabad , Feb.18

MR Pasquale Pistorio, President and Chief Executive Officer of STMicroelectronics, a $7.2-billion semi-conductor major, is a thought leader in the semi-conductor industry. He has driven STMicro to new heights and saw it through the industry slowdown. STMicro has invested about $50 million in India centres, and expects to further ramp up operations with two new facilities. He is currently in India.

Excerpts from an interview with Mr Pistorio, conducted through e-mail.

It appears the semi-conductor industry has begun to look up. How do you perceive this trend?

The industry is seeing growth globally as well as in India. We believe it looks particularly good in India. The growth is driven by increased disposable incomes , which in turn has led to a huge domestic demand for consumer electronic goods. Besides, the telecom industry, a major consumer of semi-conductors, is also growing very fast. Another factor that has lent much steam to the semi-conductor market in India is its research and design. Studies indicate that the R&D activities could account to as much as $10 billion by the year 2010.

Do you see the prospects of more investments in the industry across the globe this year and also in the long term?

There are prospects of fresh investments in the long run, especially in countries such as India. For instance, with most of the major corporations looking at cost cuts in R&D work, India seems to have become a favoured destination for SoC design. Further, India is ready to leapfrog, if there is a sustained investment in technology and focus and direction from the Government.

Building wafer fabs may be a good option as a long-term strategy but as a medium term strategy, we need to focus on creating a market for new applications in the areas of digital consumer products, smart cards, set-top box, among others. This is already under way and we just need to stand by and see the market pick up. This will not only help India realise its potential but will also create avenues and a congenial environment for investment.

How is STMicro positioned to leverage the current market potential?

The semi-conductor market in India is still at a very nascent stage. However, emerging technologies such as wireless telecom, smartcards, GSM, CDMA, digital consumer and automotive are gaining importance in everyday lives of Indians. India already has 22 million GSM sets and few million CDMA sets have already been sold. India, with its population, can definitely become a manufacturing base for many electronics companies. ST India is very well positioned to address this growing market as ST India has been involved in covering the majority of the VLSI design spectrum starting from the design and development of basic libraries, core and standard IPs, application specific IPs and going up to the full SoCs. Further, ST India also has been developing embedded software for DVDs, set-top boxes, DTH and imaging products.

What are STMicro's plans for expansion in India?

The planned expansion of the centres in Bangalore as well as Noida is a step towards providing the company with ample facilities and manpower to work more effectively. The new facility at Noida has been set up with an investment of about $15 million. The company has already invested about $50 million in Indian facilities. I see a lot of potential in the Indian market and during this visit I intend to deliberate, along with other key people within the industry, on various issues related to the sector. The idea is to create a sustainable strategy for the semi-conductor industry to recognize its full potential in the long run.

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