Israel semiconductor firms eye opportunities in India

Israel, one of the top electronic equipment exporters in the world, is knocking at the doors of start-up Indian semiconductor manufacturers and chip-design firms for long-term collaborations, from technology transfers to supply of high-end equipment for plants.

A delegation comprising some of the top Israeli semiconductor industry-related companies is on its maiden visit to India. It has held discussions with SemIndia and Hindustan Semiconductor Manufacturing Co, which are planning 'fabs' (semiconductor fabrication plants) in Andhra Pradesh in technology partnership with AMD and Infineon respectively. Indian IT majors TCS, Wipro, MindTree Consulting and L&T Infotech, which provide embedded software, chip-design and testing services to the semiconductor industry, also held discussions with the Israeli companies.

Israel, which exports electronics worth $3.5 billion every year, has more than 100 fabless houses, five fab plants, 30 semiconductor equipment manufacturing firms, five packaging technology companies and three semiconductor manufacturing testing facilities. Israel is reckoned among the world's top three countries in the semiconductor space, with Intel setting up fab plants there. Israel is now eyeing India as a potential market.

"India's economic growth, aided by the demand for local electronics, presents an excellent opportunity for Israeli companies to participate in semiconductor manufacturing and other services in the country. We are here to take part in the seeding process for the semiconductor industry. We are looking for long-term partnerships with Indian companies," Michael Admon, business development director (industry), Israel Export and International Cooperation Institute, told the Business Standard.

IT advisory firm Gartner recently predicted that total electronic equipment production in India will reach $32 billion in 2011, compared with $14 billion in 2006.

The semiconductor consumption will rise to $7.2 billion in 2011 compared with $2.8 billion in 2006. The growth in electronic equipment production was being fuelled by the rapidly growing demand for electronics equipment in the country, Gartner stated.

According to Admon, Indian semiconductor companies and chip design firms can leverage Israeli technology to meet the local demand for semiconductors. "India should have its own semiconductor industry to take care of the domestic requirements, considering the projected growth. Israel did the same thing way back.

If things move in the right direction, Israel may even consider setting up fabs in India with local partnership," he added.

Applied Materials, CI Systems, Contel Automation and Control, Filt Air, Habonim Industrial Valves, Ham-Let Products, ITH Israeli Test House, Nova Measuring Instruments, Pach Taas (Ashkelon) and Tower Semiconductors are some of the Israeli companies visiting India. These companies provide engineering equipment, air system and filters, measurement equipment, testing units and analysing machinery for semiconductor plants worldwide. "We are ready to provide all these products to the Indian semiconductor companies. We do not expect any deals overnight since these take years to materialise. We already had fruitful discussions with SemIndia and Hindustan Semiconductors," he pointed out.

Tower Semiconductors, which operates two fabs in Israel, has offered its technologies, including complementary metal oxide semiconductor image sensors and radio frequency identification technology to SemIndia, which is in the process of setting up the 'Fab City' project near Hyderabad. "Israel is a natural partner for India as the country embarks on the semiconductor journey. Israel's technology industry is highly evolved and sophisticated. India can leverage Israeli technology and experience. This is the first step for a mutually beneficial relationship," said India Semiconductor Association Vice-Chairman Jaswinder Ahuja.

The Israeli delegation has come just months after the Taiwan chip-design companies visited India looking for partners, indicating the growing importance of the country in the semiconductor space. Recently, the government announced the semiconductor policy to attract investments. Much of the policy is derived from the Israeli semiconductor policy.

Shreerang Athalye, director, Tefen India (a management consultancy firm with many Israeli semiconductor companies as clients), said that Israel considered India as a crucial destination. "They have been observing India's growth all these years. They think the time has come for them to enhance their presence through collaborations," he added.