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V. Rishi Kumar

Hyderabad , June 15

STMicroelectronics, the $8.7-billion system-on-chip (SoC) designer, is bullish on the Indian market against the backdrop of plans of leading mobile manufacturers to make India a manufacturing base. It is also focussing on the broadband market.

The President of STMicroelectronics in India, Mr Pradeep Kumar, said in an interview to Business Line that the company was supportive of the cause of manufacturing and was part of the manufacturing council set up by the Ministry of Information Technology. STMicro is rapidly expanding operations in India and has filed about 65 patents and is planning for more. Excerpts.

With handset majors such as Nokia planning to set up manufacturing base in India, how does STMicroelectronics view the sector?

STMicroelectronics has been closely associated with LG, Nokia, Ericsson and Alcatel among others , to provide complete support and latest products. Considering the huge potential that India as a country offers, we feel that it is mutually beneficial for global manufacturing companies to set up base here. ST in India, with a base of 1,600 designers, is in a strong position to support customers entering the manufacturing arena or planning to set up a manufacturing base here.

How will your R&D in India support the mobile handset market?

STMicroelectronics is a broad range semiconductor supplier for microelectronic applications. ST develops differentiated technologies that include the latest camera modules, Bluetooth chip/GPRS and multimedia processors which are available on a single chip that go into mobile phones. Some of the key applications integrated on a single chip drastically reduce the manufacturing time and help shrink the time-to-market considerably.

What are ST's plans for India?

Our Noida centre, with an investment of $50 million, is the company's largest design facility outside Europe. We have plans to invest $100 million in the next five years in the Indian R&D design centre. In addition, the company is setting up a campus in Greater Noida on about 25 acres of land as part of its expansion plans. In the first phase, ST plans to invest $30 million to set up a campus at Greater Noida with a seating capacity of 1,500.

This would be complemented by a Bangalore team that handles work on mobile software.

How big is the market globally and what is the potential here?

The US Semiconductor Industry Association has projected global semiconductor sales to grow by 6 per cent in 2005, driven by demand for personal computers and mobile phones. Chips that power digital cameras, personal computers and cellular phones are likely to be key drivers. The SIA has projected that 2005 sales would be essentially flat at the $213 billion sales level of 2004. The new forecast also projects a compounded annual growth rate of 9.8 per cent through 2008, with global chip sales reaching $309 billion in 2008. Asia will remain the fastest growing market for chips, accounting for an estimated 46 per cent of the worldwide market in 2008.

According to India Semiconductor Association, a preliminary investigation suggests the market could be anything between $1 billion and $3.5 billion. In addition to rapid growth in consumer electronics goods, mobile phones and wireless devices, markets are growing in other areas.

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