In the Autospace-its quite possible to get high single Digit returns YoY for most investors;thats how much growth is happening there today.The Aspirational level of Indians is on the up bigtime.Everyone wants to own a car today and they have much higher savings(Than most Westerners to boot).The only wrinkle is High gasoline/Diesel costs.If Those two become cheaper (as Crude Oil continues to correct and correct sharply);I can see Auto sales picking up bigtime,Double Digit Sales growth is highly-highly possible
Please before we all log off, I would like to invite you to another chat we are having next week. Matthew Sheerin, an analyst with extensive experience in the electronics supply chain will join us on Tuesday for a live chat. I worked with Matt years ago and you'll enjoy the chat. He knows his onion and we can benefit from his knowledge. Please join us Aug. 23.
@Marc, Why pick? I'll take both the Indian and the Chinese. They are not at war and I am not playing favorites in my business. I just want to sell my widgets or get someone to make them for me at a cheaper price. Three is company in my opinion.
Ashish: is there a regional dynamic at place here, do you think? It's a big country. Particularly on infrastructure questions, regional governments seeking to attract investment might be freer in India than in China to invest in creating infrastructure for business. O
@Ashish, I don't expect India to become a serious challenger to China in the short term. But on a longer-term basis, India will eventually attract the resources it needs to solve the problems you identified. Also, I know the country has not been standing still. The evolution hasn't been as rapid as the one China engineered but it is taking place and will only accelerate in future.
@Ashish, I think Ashish just brought up an important point and one of the reasons why electronics company may be hesitant to jump into the India market. India is notorious for taking two steps forward and one or more back. Companies need a consistent environment and strategic policies that don't change from one day to the next. India is politically fractured and it is not unlikely that a new governmetn might reverse something the prior government introduced.
infrastucture for distribution, that was the topic I was referring, Thanks FLYINGSCOT.
Now, when I talk to some Electronic Distributors, one of they main concern is the Safety of Goods, would anybody have an idea if this is a problem in India biggger than China?
Avent, Arrow, etc: What I think we're returning to is this cliche, that Barbara started this converstaion pointing out, that in the eyes of the world's electronics investors, China is a giant labor force and India is a giant brain. And that's not quite so.
@Jay_Bond, That is the third strong leg India currently stands on -- the expatriate Silicon Valley Indians returning to the country. As US immigration has tightened the number of Indian engineers and designers returning home has increased and they will play a greater role in setting up the fabless chip vendors that will help establish the country in semiconductor. By the way, that's a strategy Chinese design houses used effectively (Please see the recent report completed by EE Times Confidential.)
Interesting point about distrbution. The industrial guys--Avnet, Arrow--haven't done a lot in India while Flextronics has set up a logistics hub there for after-sales service and support. The industrials have focused on engineering resources in India, which makes sense...
@Marc (Bolaji): as per what you have experienced also recently, for investors, which sectors are currently preferred? We have discussed about mobile, electronics, but we are speaking about consumers or OEM for vendors? Other segment, for example, civil infrastructure, imo, could be a great field for India on which play the leadership game with China.
Oh dear, the hippie thing was a joke. But speaking of California, here's the real issue, I think -- that India is building relationships with silicon valley that are very different than China's. Silicon Valley has very strong ties to India, and I wonder -- and would love to hear opinions -- about whether that cultural coseness isn't a competitive advantage for Indian electronics. I mean, Silicon Valley is a very Indian place. that matters, right? Or am I being simplistic.
I said in a blog today not to take lightly India's determination to become a powerhouse in electronics manufacturing. I still believe folks tend to overlook India. The country has several other reasons for seeking local production and a major factor is in terms of its military exposure. India shares a long border with China with which it previously fought a war and is certainly in a messy relationship with Pakistan. It also has internal problems that haven't been resolved. The Indian military does not like the country's dependence on foreign IT hardware. They want to break that pattern and I think eventually they will.
More what I mean to say is that there is a difference between nations and industries. "India taking on China" is a geopolitical, economic dynamic, with impact on jobs, etc. Lenovo taking on Bharti is a financial, business world dynamic. But both are "India taking on China"
I think it is not just the technical talent, India needs more n more enterprenuers who can be part of the complete ecosystem to build the companies who can develop the complete parts starting from screw to an high end electronic equipment.
Nemos: It's like what Bolaji just said about Intel. China wants the 4billion factory built, because that's a lot of jobs. Intel's Chinese competition might prefer it's government not offer the usual incentives, tax breaks, etc, to make that happen.
The lack of democracy in China hasn't hurt the country. Is it a factor? Yes. Do companies focus on it today as a determining factor? No. India is not going to sell itself as the world's biggest democracy to attract business. It will have to be viable on other levels.
I know and Ive been in China many times, but I don't know India.. can anybody tell me if the salary for the force labor is better than China?
in the South of China where Foxconn is located people is asking for more benefits, I wonder if India is taking advantage of this and advertising better conditions ofr workers or benefits than China?
I think an important process as emerging business in/for India, has to consider also local culture. General feeling is local culture is closer to Western attitude than China. Is it right? It could be a competitve advantage for them?
@Flyinscot, You are right. The initial response to India's request for "expression of interest" in fabs hasn't been encouraging but I believe this is part of the challenge for India. It is possible some company might still take them up but the incentive would have to be greater than what is on offer now.
Thanks Bolaji. It seems to me the Chinese government is one of the driving forces behind China's growth, particularly in green technology. (Which makes sense for China vis a vis pollution.) I wonder if India could leapfrog in some way--clean water technology--whihc would also help pave the way for better infrastructure.
@Tirlapur, I refer to Toshiba and others, including automotive companies. The big Japanese companies have extensive local presence in India but they are willing to take this further. Let's not forget that in addition to the possibility of easier manufacturing environment, India also offers the prospects of a giant market even if it's going to be in future.
@Barbara, Government investment is the first step towards bringing Indian infrastructure up to date. But the government is also inviting businesses to partner with it and offering to allow them manage some of these. India is actively recruiting U.S. corporate partners for some of the infrastructure projects.
@Mario8a, Many Japanese companies are investing heavily in India today, partly because they need the market and also because they have run into problems in China. The history of relationship between Japan and China is not very positive and we have seen numerous flare ups that hurt Japanese OEMs. As a result, they are looking into expanding in India.
mfbertozzi: that's interesting, and speaks to the infrastructure question. They need to prove that they can reliably keep a factory running on their roads, electrical grid, port system, train system... China's way ahead on that.
DennisQ: Agreed. But we know China's depressing its currency, and like Bolaji said, it's a decade or more further along in the process of industrialization, and embedding itself in various supply systems, compared to India. So -- lacking data -- I could imagine a situation where Indian companies have a competitive advantage on wages and exchange, if only for their evolutionary state compared to Chinese manufacturing.
@mfbertozzi, The problem you describe is not peculiar to India. In any nation where wireless handsets and services are not sold as a subscription but is offered a la carte, you could easily build up millions of moribund users who hop from one network to the other. This is a challenge for the local telecom carriers but not for manufacturers. In fact, if people don't use the phones (and if they are cheap enough, which they are) this will only boost sales at OEMs.
DQ--you are right--India was the target for awhile becuase of IT outsourcing, and China is now in manufacturing. I guess it depends on whether the service or manufacturing industries in the US are hurting most..oh wait! Both of them are
@Sarayantil, I agree India is trying to build out a supply chain competence but this is not something a government or individual company can do by itself. It has taken China years to become the powerhouse it is today and India will have to slowly build and encourage the development of the network of companies that will support the electronics supply chain. It's not enough to just offer incentives if I cannot get the parts I need.
@Barbara, that's a good point about how India will be viewed by the US... will it be percieved more positively than China, or will it just be dismissed as a slightly different overseas nation we're outsourcing jobs to? I do think there is some negative perception of India already, obviously attempts to relocate customer service call centers to India have not been well-received across-the-board...
@Ariella, They are already doing this. They are increasing tarrifs on imports and cutting taxes on local production. They will run into problems with the WTO on some of these but on others they will force companies to do local production. In addition, they are offering incentives for companies to manufacture locally. One of the new regulations is 100 percent tax-free profit repatriation on goods manufactured locally. That's a great incentive.
Barbara: A key point. It's interesting how we talk about the two behemoth nations, from the US and Europe. China's a threat; India's an opportunity. Do Indian readers feel insulted by this? It's almost like the US is saying not, "great, a partner," but "ooooh, how cute, India has money now"
@Bolaji, saw your response about India's infrastructure which is one of my main concerns with the region from a tech manufacturing standpoint... as you say, India does realize this and they are creating technology parks and all that, but realistically, how and when will we start to see dramatic improvements here? China, for all its flaws, at least has done a good job executing on their infrastructure plans. Also, even if tech parks are created and all that, I'm concerned about transport: obviously the roads/ports are not up to China's standards. Are there plans to address that as well?
The other question I have--and maybe our readers in India can answer--is whether India sees China as a competitor, or the US as a competitor? At first, China was seen as a great opportunity for US companies and now it is the evil job-sucking empire. Will we view India any differently?
@Barbara, The conversation is changing in India about what should be sold in the country versus what should be made in the country. For electronics component vendors and OEMs the idea of manufacturing elsewhere and just selling in India is going to become painfully expensive. India is putting in place rigorous laws to make imported products expensive. They have been sounding this warning bell for quite a while but now they are moving to enforcement. The era of make-it-elsewhere-sell-it-in-India is coming to an end.
Many startupcompanies are working on Products. For example companies like Saankhya labs http://www.saankhyalabs.com/ are working on World's First Software-Defined Universal Demodulator IC for Digital and Analog TV reception.
HospiceHoungbo: I think they'd prefer China short term, because the ports work and the trains work, etc; but India long term, because I think they will have a greater capacity to have the entire supply chain, or much of it, in the same place. That's my gut sense.
@pocharle, China doesn't have to do anything about what is going on in India. China is focussing on moving to a higher end in the electronics design and supply chain. It is clear China cannot and does not want to remain a source of cheap goods. Also, it's not only India that wants a piece of the outsourced production being handled by China. Vietnam, the Philippines, Eastern Europe, south American countries and even Australia want a piece too.
So to me, one question is, does India have the upper hand competitively. Because they're positioning their population advantage around creating high-end, globalized jobs, where China's talking about being a huge consumer market. Would you rather be supply or demand, in 30 years?
@Anandvy, I agree corruption is a concern for businesses that may want to relocate to India and you are right in pointing this out. In fact, as you are well aware that is one of the issues in the news today in India. The government says it is doing something about it but I doubt people believe they are doing enough.
Sorry, crosstalk: okay, my questions: We talk about China's rising middle class as a consumer base. But we talk about India's middle class as a labor force, right? "Someday the Chinese will buy iPhones" is a different sort of statement than "India has fantastic engineers!"
But both are about a massive middle class in Asia.
Well, if I'm Apple, say, and I am looking to open a factory, should India compete for that business, or should it instead go to Apple and say, "okay, make the phones in Shenzen, we want the design;IT;customer support; non-manufacturing part.
@Barbara, Great and controversial point. Does the world need another China? India is betting on the same need that you are quite aware of in the electronics manufacturing world, that of diversification. The world was stunned by Japan's March earthquake and India wants to position itself as an alternative source to India. China won't be replaced by India anytime soon but if you don't want to single-source manufacturing you consider alternatives.
@Eldrege, i think in the last few years Indian have been invested in educating its citizens. I was a student at the University in UK, where i studied Embedded Systems few years ago. Since embedded was introduced in that university, indians have been accounted for 70% of students in the course.
@pocharle, The resources are available but the infrastructure is very weak and without good infrastructure you cannot play a significant role in electronics manufacturing. India is addressing this in two ways. One, they are investing heavily in infrastructure. Two, they are creating technology parks that have all the facilities needed for electronics manufacturing -- these are separate from the facilities available to the general business community.
So I see three questions here: 1) can India take advantage of its middle class, 2) can India's infrastructure compete with China's well enough to lure manufacturing/assembly, or 3) should we not just stick to the current division, where China makes and India supports.
India has the institutions it needs and graduates some of the best IT professionals in the world. In fact, many of India's top-rated IT colleges are extremely difficult to enter and the competition is very stiff. I don't doubt that India has the educational facilities in place. Experience, though, is a different subject.
Okay. With introductions out of the way let's get rolling on the subject of India's desire to play a bigger role in the electronics supply chain. As I pointed out in a blog today, this is not just vain wishes on the part of the Indian government. They are determined to become a player and they are investing resources to achieve this goal. The issue is whether desire can match industry needs.
Offshoring: Was it the right decision? 10/23/2012
Class D Amplifier Design 1/21/2011
Power Supply for High Performance Analog 1/21/2011
Freescale Semiconductor: SAVING CRITICAL TIME: HOW TO SPEED UP MEDICAL SCREENINGS AND REMOTE PATIENT MONITORING 10/18/2010MORE WHITE PAPERS
EBN Dialogue / LIVE CHAT
Have a tête-à-tête with leaders & luminaries
EBN Dialogue enables and encourages you to participate in live chats with notable leaders and luminaries. Not only editors and journalists, but the entire EBN community is able to comment and ask questions. Listed below are upcoming and archived chats.
Datasheets.com Parts Search
185 million searchable parts