India's semiconductor consumption hits $8 billion in 2012


India's semiconductor consumption hits $8 billion in 2012

Satarupa Bhattacharya

Semiconductor consumption levels in India rose 7.4% last year compared to 2011 and touched the $8 billion mark, according to Gartner.

This is in sharp contrast to the global trend for worldwide semiconductor consumption, which fell 2.6% to just under $300 billion.

Ganesh Ramamoorthy, a research director at Gartner, said the worldwide semiconductor industry suffered serious disruption in 2012 largely due to excess inventory in the supply chain.

"High inventory levels affected semiconductor consumption in India as well during 2012. However, a relatively better domestic economic climate and growth in consumer spending helped semiconductor consumption growth in India."

"The improving consumer sentiment on the back of a likely stabilization in the global, as well as domestic economic conditions, coupled with a return to more normal inventory levels will be the key factors that will drive semiconductor consumption growth in India during 2013," Ramamoorthy added.

Between 2011 and 2012, the economy remained soft. However, the economy is improving, with the inflation rate falling to a three-year low. With consumers more likely to spend, an increase in electronic goods purchases is expected. Because the semiconductor industry is tied to the electronic and consumer goods segment, that industry could also grow.

Mobile technology, specifically smartphones and LCD TVs, along with the PC market will help enhance the semiconductor consumption

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in India. Notably, the PC segment in India is still expected to grow more. Numerous households still need a PC for various purposes.

When asked about tablets overtaking the PC market, Ramamoorthy said the Indian market is not ready.

"Tablets are primarily shipped from countries such as China. The Indian market has no local tablet manufacturers to produce them in huge proportions for consumers yet." He added that low prices in the PC sector mean strong demand will continue.