Chapter 2
Content
2.1 INDUSTRY PROFILE
Electrical and Electronic Industry Overview
The worldwide electrical and electronic and computers industry is the most flourishing and extremely diversified sector consisting of manufacturers, suppliers, dealers, retailers, electrical engineers, electricians, electronic equipment manufacturers, and trade unions. This sector has been growing at a rapid pace with the invention of innovative technologies and an ever-increasing customer inclination towards electronic goods and services.
Key Segments of Electrical and Electronics Industry
The global electrical and electronics sector is highly fragmented, comprising of various auxiliary sectors namely electronic components, computer and office equipment, telecommunications,consumer appliances and industrial electronics.
Electronic Components Industry:
Comprises of various establishments engaged in designing, manufacturing, marketing, supporting, selling and distributing of broad range of electronic components such as bolts, clamps, fasteners, rivets, lighting, semi conductor, integrated circuits, microprocessors, cables and wires, switches, sensors, keyboards, sockets, timing devices, laser modules, solar devices, test and inspection equipment, scientific and technical instruments etc. US, Japan, Europe, China, Taiwan, and Hong Kong are the leading markets of electronic components in the world.Semiconductor sector is the largest and highly profitable sector. The global semiconductor industry is worth $248 billion, of which China accounts for $ 63 billion. China, United States and Japan are the largest semiconductor producing countries in the world.
Major Production and Export Centers
The worldwide electrical and electronics industry is experiencing phenomenal and remarkable changes these days. The worldwide electronics industry is distinguished by fast technological advances and has grown rapidly than most other industries over the past 30 years.
In Asia Pacific region, Japan, Korea China, Taiwan, India and Singapore are the principal manufacturing hubs for electrical and electronics products. China is becoming the manufacturing region of electronic products on the globe. The key electronics manufacturing destinations are Guangdong province, South Jiangsu, Shanghai and eastern part of Zhejiang.
In United States of America, New York, Atlanta, Colorado, Detroit, Florida, New England, San Diego, San Francisco, and Texas are the major industrial hubs of electronics industry.
Presently, the electronic products manufacturing is expanding on an unprecedented scale in Asian region and deflating in the Americas and Europe. In year 2002, Asia occupied 41% of total electronics market share, which has now risen to 56% in 2007.
Factors Governing the Growth of this Industry
The key factors governing the growth of electrical and electronics industry are as follows:
y y
Rising and continuous investments in research and development has led to increased productivity and higher-value added electrical and electronics products. Increased foreign investments have resulted in the accelerated growth in terms of electronics production and exports. Foreign companies are now making huge investments and are installing extensive production capacities in developing countries.
y
Extends support to several global industries namely medical, telecommunications, industrial and automotive sectors.
y y y y
Rising incomes and living standards have resulted in the increase in demand of electronics especially consumer electronics products in the world. This industry is highly fragmented which comprises of many small and medium size enterprises. Asia Pacific region is emerging as the most spinning place for the consumer electronics industry, as the markets remain still unbroached. Rapid pace of innovation in electronics technology is resulting in a consistent demand for newer and faster products and applications.
Future Outlook
The worldwide electrical and electronics industry is experiencing phenomenal and remarkable changes these days. The worldwide electronics industry is distinguished by fast technological advances and has grown rapidly than most other industries over the past 30 years.
Voluminous production is slowly and gradually moving towards low cost destinations, which in turn are the markets which offer the most long term potential. In today's age of competition, electronic and electrical products manufacturing companies are under constant pressure to develop new and innovative products in shorter time cycles, at reduced cost, and with improved quality.
The global electronics industry is driven by demand for the products, which are durable, lighter, cheaper, and better than the ones, they replace. To meet up the growing market demands, industry is slowly and gradually shifting its base to Asia Pacific countries, which is now the prominent source of electronic components and is soon going to turn out to be the primary destination for consumer electronics. There is an estimation that within 20 years, two third of the electronics industry will be four times as big as today and half of it will move into Asia.
Foreign collaborations and mergers are on a rise. A new wave of industrialization is throwing up several business opportunities for electrical and electronics market to further its market. There is a vast growth in the sales of computers, software and networking products. Younger generation is increasing becoming tech savvy and spending huge amount of money on digital products such as MP3 players, Dvd player s, CD players, mobile phones, speakers, headphones, shuffle, nanoetc.
The future seems prosperous for this electrical & electronics industry in terms of the expected surge in global demand and upsurge in investments. Many trends such as over -capacity in developed markets, globalization, technology advances, regulation and environmental consideration, market fragmentation and product proliferation will lead to the accelerated growth of this sector.
y
Indian electrical industry Like every other industrial sector in India, the Indian electronic industry too is slowly emerging from out of its protective cover . For far too long has Indian industry remained shackled and consequently inward looking. Over the past fifty years there was no exposure to global players and competition, with the result that the industry grew up in sheltered environment, dependent on the government for everything, from licences to protection to tariffs. Each one of those interventions was aimed at securing protection for oneself and ensuring growth of one s own organisation at the cost of industry and nation at large. Lack of global competition encouraged a cost plus approach, where conceivable cost increase was passed on to the customer. There was no motivation to reduce costs.
Since last decade India has witnessed what global players have achieved and what they are capable of achieving. We are becoming aware of competition on turf. In this scenario, every company complains of increased competition, lower order books and shrinking margins. The Indian electrical/electronic industry of course further besieged the fact that there is a death of business an account of lack of investment in power infrastructure.
Electrical and Electronic Industry Overview
The worldwide electrical and electronic and computers industry is the most flourishing and extremely diversified sector consisting of manufacturers, suppliers, dealers, retailers, electrical engineers, electricians, electronic equipment manufacturers, and trade unions. This sector has been growing at a rapid pace with the invention of innovative technologies and an ever-increasing customer inclination towards electronic goods and services.
Key Segments of Electrical and Electronics Industry
The global electrical and electronics sector is highly fragmented, comprising of various auxiliary sectors namely electronic components, computer and office equipment, telecommunications,consumer appliances and industrial electronics.
Electronic Components Industry:
Comprises of various establishments engaged in designing, manufacturing, marketing, supporting, selling and distributing of broad range of electronic components such as bolts, clamps, fasteners, rivets, lighting, semi conductor, integrated circuits, microprocessors, cables and wires, switches, sensors, keyboards, sockets, timing devices, laser modules, solar devices, test and inspection equipment, scientific and technical instruments etc. US, Japan, Europe, China, Taiwan, and Hong Kong are the leading markets of electronic components in the world.Semiconductor sector is the largest and highly profitable sector. The global semiconductor industry is worth $248 billion, of which China accounts for $ 63 billion. China, United States and Japan are the largest semiconductor producing countries in the world.
Major Production and Export Centers
The worldwide electrical and electronics industry is experiencing phenomenal and remarkable changes these days. The worldwide electronics industry is distinguished by fast technological advances and has grown rapidly than most other industries over the past 30 years.
In Asia Pacific region, Japan, Korea China, Taiwan, India and Singapore are the principal manufacturing hubs for electrical and electronics products. China is becoming the manufacturing region of electronic products on the globe. The key electronics manufacturing destinations are Guangdong province, South Jiangsu, Shanghai and eastern part of Zhejiang.
In United States of America, New York, Atlanta, Colorado, Detroit, Florida, New England, San Diego, San Francisco, and Texas are the major industrial hubs of electronics industry.
Presently, the electronic products manufacturing is expanding on an unprecedented scale in Asian region and deflating in the Americas and Europe. In year 2002, Asia occupied 41% of total electronics market share, which has now risen to 56% in 2007.
Factors Governing the Growth of this Industry
The key factors governing the growth of electrical and electronics industry are as follows:
y y
Rising and continuous investments in research and development has led to increased productivity and higher-value added electrical and electronics products. Increased foreign investments have resulted in the accelerated growth in terms of electronics production and exports. Foreign companies are now making huge investments and are installing extensive production capacities in developing countries.
y
Extends support to several global industries namely medical, telecommunications, industrial and automotive sectors.
y y y y
Rising incomes and living standards have resulted in the increase in demand of electronics especially consumer electronics products in the world. This industry is highly fragmented which comprises of many small and medium size enterprises. Asia Pacific region is emerging as the most spinning place for the consumer electronics industry, as the markets remain still unbroached. Rapid pace of innovation in electronics technology is resulting in a consistent demand for newer and faster products and applications.
Future Outlook
The worldwide electrical and electronics industry is experiencing phenomenal and remarkable changes these days. The worldwide electronics industry is distinguished by fast technological advances and has grown rapidly than most other industries over the past 30 years.
Voluminous production is slowly and gradually moving towards low cost destinations, which in turn are the markets which offer the most long term potential. In today's age of competition, electronic and electrical products manufacturing companies are under constant pressure to develop new and innovative products in shorter time cycles, at reduced cost, and with improved quality.
The global electronics industry is driven by demand for the products, which are durable, lighter, cheaper, and better than the ones, they replace. To meet up the growing market demands, industry is slowly and gradually shifting its base to Asia Pacific countries, which is now the prominent source of electronic components and is soon going to turn out to be the primary destination for consumer electronics. There is an estimation that within 20 years, two third of the electronics industry will be four times as big as today and half of it will move into Asia.
Foreign collaborations and mergers are on a rise. A new wave of industrialization is throwing up several business opportunities for electrical and electronics market to further its market. There is a vast growth in the sales of computers, software and networking products. Younger generation is increasing becoming tech savvy and spending huge amount of money on digital products such as MP3 players, Dvd player s, CD players, mobile phones, speakers, headphones, shuffle, nanoetc.
The future seems prosperous for this electrical & electronics industry in terms of the expected surge in global demand and upsurge in investments. Many trends such as over -capacity in developed markets, globalization, technology advances, regulation and environmental consideration, market fragmentation and product proliferation will lead to the accelerated growth of this sector.
y
Indian electrical industry Like every other industrial sector in India, the Indian electronic industry too is slowly emerging from out of its protective cover . For far too long has Indian industry remained shackled and consequently inward looking. Over the past fifty years there was no exposure to global players and competition, with the result that the industry grew up in sheltered environment, dependent on the government for everything, from licences to protection to tariffs. Each one of those interventions was aimed at securing protection for oneself and ensuring growth of one s own organisation at the cost of industry and nation at large. Lack of global competition encouraged a cost plus approach, where conceivable cost increase was passed on to the customer. There was no motivation to reduce costs.
Since last decade India has witnessed what global players have achieved and what they are capable of achieving. We are becoming aware of competition on turf. In this scenario, every company complains of increased competition, lower order books and shrinking margins. The Indian electrical/electronic industry of course further besieged the fact that there is a death of business an account of lack of investment in power infrastructure.
