ESDM sector has to keep up to its global reputation during Covid-19

Manufacturing and supply-chain logistics is worst affected hampering the overall efficiency of the output for the sector.

Gurugram – Friday, 15 May 2020: The 2nd episode of techFLIX special series on Covid-19 and its impact on the digital industry in India was organised by techARC in collaboration with IESA.  The industry leaders unanimously drew attention to the role Indian ESDM plays in the global semiconductor industry.  It was highlighted that the main challenge of the sector during Covid-19 was to maintain the global reputation of the Indian value chain in terms of both timeliness and quality.  The Covid-19 pandemic and the situation due to it is throwing some concerns to the industry to keep up to this reputation.

The key takeaways of the panel discussion were: –

  • R&D centres and the services side of the semiconductor industry in India is minimally impacted due to Covid-19. Due to the portability of the work, people in the industry are able to carry out work efficiently.
  • The biggest challenge with the industry is to deliver its projects in time while adhering to the lock-down without affecting the reputation globally.
  • Contrary to the initial fear, productivity has gone up as people are devoting their commute time to work.
  • Manufacturing is impacted due to lockdown as well as supply chain breakdown. The scenario is expected to improve with government support allowing movement of people and components and other materials.
  • Demand for electronics will be impacted due to supply as well as demand issues. This year the industry might not witness growth but work hard to sustain the last year’s performance.
  • Industry is honouring the new as well as lateral job commitments. However, as profitability is impacted, industry will go slow on hiring in subsequent quarters.

Rajeev Khushu, Vice Chairman, IESA (Director Government Relations Strategy & Corporate Affairs, Texas Instruments) representing the ESDM fraternity shared how they are closely working with the central and various state governments to resolve some bottle necks to get the efficiencies back to the desired levels.  Appreciating the government’s role and response, he said, “We have to increase the physical presence of some critical staff on the premises which is currently being served by just around 5% of the staff strength.  Also, for some design and testing services we are completely dependent upon advanced equipment and tools which are available in such high-tech labs on the campuses.”  He further added that in some cases movement of boards, etc., is also unavoidable to complete even services oriented tasks like testing.  So, while design and services segment of the ESDM is not impacted that high, but such bottle-necks are a concern to keep up with the timelines of the deliverables which have not been renegotiated with the clients or the other global locations of the semiconductor value chain.  Khushu, however added, “We are being heard by the government at the highest levels and every effort is being made out to ease the situation as the situation allows.”

Elaborating about getting back to normal, Anku Jain, Managing Director, Mediatek India said, “The industry has already started working on what would the future of work places be like in terms of facilities as well as augmentation of the infrastructure to appreciate social distancing and other measures which will instil faith not only in employees but their families as well.”  He further added that this might take some time and it would be worth to spend this time in creating such an environment where employees, partners, customers and other stakeholders feel completely secure in resuming from the offices.

Enabling sales of such high-tech products is a priority in this new normal.  On this Vivek Tyagi, Senior Director – Business Development, Embedded & Enterprise Western Digital Corporation added, “There are areas like education, healthcare among others where our products are required even in present situation for the business continuity of our customers as well as enabling them to reinvent with the changing circumstances.” Elaborating about the challenges in this, he added that performing  (proof of concept) is an important process before a customer could decide and giving example of WDC, Vivek added that they have set up a PoC lab with dedicated network for customers to perform the necessary tests remotely but within their environments.

Sanjay Gupta, Vice President & India Country Manager, NXP Semiconductors talking about what this situation could mean for India ESDM said, “While the jobs offered for this season have been honoured, there could be a situation that we could see more opportunities porting to India from various global destinations as everyone would be looking for affordable talent without compromising quality for which India is known.”  On the manufacturing and product development side he said, there are a lot many opportunities for Indian talent and expertise to innovate in testing, cure and other dimensions of the pandemic situations.

Talking about the availability and quality of infrastructure to support working from home and in a decentralised manner during Covid-19, Hemant Mallapur, Co-Founder and EVP of Engineering, Saankhya Labs said, “Our team is spread across major and tier 2 cities and towns working from home.  In cities beyond metros and tier 1, there are some challenges with respect to connectivity and speed of the Internet but it’s not a show stopper.”  He also pointed out that on the manufacturing side they are facing greater challenges as components and supplies are delayed which impacts the hardware design and development for their customers.

The panel on the techFLIX was unanimous in the outlook for the sector where it was felt that there will be some impact on the growth and possibly revenues.  However, looking at the larger picture of global scenario there could be more opportunities coming in way for India ESDM and for that the industry has to gear up collectively in addition to manoeuvring the present situation.  Comparing the time to reboot with other global destinations, the ESDM leaders opined that India did it almost in real-time while many countries with better infrastructure faced lot more teething problems to adopt to the new situation.

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About techFLIX: techFLIX is an on-demand video offering of techARC where thought-leadership sessions are driven with industry leaders discussing various pertinent topics and issues.  The one-hour live session is attended by representatives of all major stakeholders including government, industry, academia and the media.  The recording of the session is also made available for on-demand consumption.  For any query on techFLIX please reach out to techFLIX Help Desk at techFLIX@techarc.net