Electronic Industry development Strategy for Sri Lanka

M D Sudara 110558CJ G D A Thilakarathne 110575BM M D Vishwajith 110604PH M S Weerarathne 110612MV S Wijesinghe 110641B

EN 4012 : Advanced Electronics

South Korea, Taiwan, Vietnam, Israel

Development Strategies of Other Countries

South KoreaMobile phones, Television, Automobile

Started in 1960s

They allowed major electronics firms from industrialized countries to establish their production bases for the post-processing of integrated circuits in Korea.

Encouraged Inward FDI(foreign direct investment) and

technology transfer.

Changed their industrial policies to export-led industrialization.

Promoted private business groups to promote technological developments. Joint public-private sector R&D projects. A small number of large corporations emerged. Government supported private sector in this area.

▪ Tax-incentives , low interest loans, science parks.

Eg: Samsung , LG , Hyundai , Daewoo

South Korea

Strengths: Strong Innovation Favorable industrial policy Well-educated workforce Government support Cheap Labor

Threats : Competitive costs and better quality

Taiwansemiconductor, Monitors, Notebooks, Motherboards, Power supplies, Scanners, Key boards, Network Cards Also started in 1960s.

They allowed major electronics firms from industrialized countries to establish their production bases for the post-processing of integrated circuits in Korea.

Encouraged Inward FDI(foreign direct investment) and technology transfer.

Changed their industrial policies to export-led industrialization.

Strengthening public infrastructure for electronic industries. Result : Many small companies invested

Established Science Parks (Hsinchu Science Based Industrialized Park)

Established public R & D institutes through the special economic zone.

Invested on domestic electronics industry.

Firms were provided preferential Treatment (Such as Financial support from China Development Corporation (CDC))

Result: United Microelectronics Corp. has grown to be a worldwide manufacturer. Domestic appliance manufacturers have fully participated in the electronic market. Taiwan Semiconductor manufacturing Company, established in 1987 specializes on foundry services Home to the world’s largest contract manufacturing firms

Taiwansemiconductor, Monitors, Notebooks, Motherboards, Power supplies, Scanners, Key boards, Network Cards

Strengths: Educated workforce Low tax burden Infrastructure Strong ties with western economies Taiwan free trade zone Government support

Threats: Intellectual property Protection No natural resources

Vietnamtransformers, printers, computer and mobile telephone parts, circuit boards

Develop electronics industry with FDI.

After ten years, they realized the difficulties in receiving the transfer of new technology from foreign countries and very little benefit from doing outwork that relied on advantages of labor intensity.

With long-term plans for improving local technology, establishment of institutes, funds and Council for Science and Technology, special financing schemes, and tax incentive etc.

Vietnam focused on attracting FDI, as well as created the most favorable environment for development of R&D and technological transfer.

They all tried to enhance the quality of human resource.

R&D and human resource quality were considered the keys to stable development of their electronics industries.

Vietnamtransformers, printers, computer and mobile telephone parts, circuit boards

Strengths:

Labor resource is plentiful Most Vietnamese labor is clever and skillfulLabor cost is cheapPolicy system is fairly certainThe private sector has considerable potentials to develop

Weaknesses:

Technology is backward by lack of capital and weakness in predicable ability development trend.Capital is small Vision strategy and management level are week High-tech labor is insufficient because of the old educational system Vietnamese labor's discipline and national spirit are low Supporting industries are rather young Without competitive pressure, infrastructure is poor and expensive Unclear administrative procedures and bureaucracy are high

IsraelUAV, SSD, Computer, Automation (Robots), cell phone, commercialized by Motorola, Miniature video camera capsules

Government programs in R & D Office of the Chief Scientists (OCS) of the Ministry of Industry and trade in Israel , Created OCS in

1968 which controlled and monitored the Commercial R & D projects undertaken by private firms Investing

Inventions Cell Phone , Commercialized by Motorola Compression techniques VOIP technology Intel wireless computer chips Miniaturized video camera capsules to examine internal organs

Patents

Developed science based export oriented industries

A variety of programs – industrial technology R&D/ university-industry partnerships/ commercialization of academic research

Strong link between R&D investment and number of patents Israel passed many industrialized countries in number of patents per capita

Results: Stands as one of the innovating economies

IndiaSpace and Defense Electronics , Consumer Electronics, TVs , Radio , Telecom Products ,Industrial Electronics , Asic Design , IP core

Rapid Customer Response – maintaining a customer focused forward looking business strategy.

Adherence to quality -Enterprises can gain competitive advantage only through offering unique products and services.

Effective E-wastes management- Designers were concerned on reducing the volume of E-waste and ensured that products are built for re-use , repair and upgradeability.

Establishing “National Electronics Mission” -a nodal agency for the electronics industry under the Department of Information Technology, The main functions of the nodal agency would be to attract investments into India, promotion of Brand India, facilitating business in India, managing R&D fund and manufacturing of value added products.

India Strategies Ctd……

Thrust to Semiconductor Industry - India has an edge in semiconductor design, embedded systems and has the potential of becoming an engineering design house for the world. The Indian semiconductor industry is currently dominated by players engaged in chip designing activities.

Research & Development – The main intension was to reduce their import dependencies from other countries.

Brand Building Initiatives- Marketers see a brand as an implied promise with desired level of quality expected of from a product, which will enable them to continue with future purchases of the same product.

Developing Market Sustenance –try to identify changing consumer needs and industry standards so they get a competitive advantage.

India Strategies Ctd……

Improved Standards and Testing Facilities . Technology Development and Sourcing. Skill and Human Resource Development. Cluster Development. Capturing the Rural Market. More Support to Telecom Equipment Sector Promotion of Intelligent Manufacturing. Promoting

Repair/Reconditioning/Refurbishment of Electronic Goods.

Simplification of customs procedures Effective supply chain and logistics system

References

http://www.wtec.org/loyola/em/03_04.htm http://www.abhinavjournal.com/images/Arts_&_

Education/Jun13/2.pdf http://www.wtec.org/loyola/kei/welcome.htm http://

www.cci.in/pdfs/surveys-reports/Electronics-Industry-in-India.pdf

http://www.gtai.de/GTAI/Content/EN/Invest/_SharedDocs/Downloads/GTAI/Info-sheets/Electronics/info-sheet-electronic-manufacturing-services-in-germany-en.pdf

http://ieeexplore.ieee.org/stamp/stamp.jsp?arnumber=5268792

http://www.thomaswhite.com/pdf/emerging-markets-spotlight-south-korea-and-taiwan-consumer-electronics-march-2011.pdf

http://211.253.40.86/mille/service/SAT/10000/IMG/000000005303/Huong_thesis.pdf

Suitable Strategies for Sri Lanka Providing tax exemptions and other financial

benefits to local manufacturers. Promoting venture capital companies within the

country. Using international and local trade shows to

promote local electronic products. Introducing standards for quality control. Research & Development. Brand building initiatives. Cluster development. Promotion of Intelligent manufacturing

SWOT Analysis for Sri Lanka

Strengths

Low cost Skilled workers Preferential access to major overseas

market

Weaknesses

High Corporate tax rates Low Capital Lack of specific training and

technological capability Lack of influence No brand names No established manufacturers No vision Strategy No proper management Less supportive government

Opportunities

Development of specialized areas such as biomedical equipment, IP cores

Threats

Further growth of other countries like China

Intellectual property violations Cheap products from other countries Well established companies in other

countries Brain – Drain

Identification of products suitable for Sri Lanka

Electronic Manufacturing ProductsSeveral electronic manufacturing categories are listed below with examples

Components and devicesComputer processors, Integrated circuits, Transistors, Diodes, Resistors, Coils, Capacitors, Transformers, Lead frames, PCBs  Computer related products PCs, HDD, CD ROM, Mother Boards  Automotive ElectronicsGPS systems, Hybrid cars, reverse sensors, Security systems  Consumer ElectronicsFlat panel TV, HD TV, Digital Cameras, Cellular phones, Iron, Telephones, Home security-systems 

Electronic Manufacturing Products

  Educational and TestingOscilloscopes, Signal Generators, Power Supplies  Medical InstrumentationMRI, ECG, Pulse Oxymeters, Glucose meters  Industrial ElectronicsOptical recognition, Green Electronics, Automation, Robots  Agricultural Electronics Rice Sorting machines, PH meters

Office EquipmentScanners, Printers, Photocopy Machines

ASIC Design: Introduction

The global semiconductor industry is dominated by USA, South Korea, Japan, Taiwan, Singapore, and European Union. The U.S. industry faces challenges to development by some forms of government regulation. The U.S. government regulates exports and certain uses of some types of semiconductors due to their potential dual use in military applications. Based on a KPMG report it was a $304 billion market in 2010. 

ASIC Design: Why Sri Lanka is suitable

Technical knowledge is available in Sri Lanka

Today a lot of capable Engineers, scientists are produced in Sri Lanka. But because of lack of opportunities in Sri Lanka these resources tend to serve overseas companies. But if we can introduce our own companies and get these resources for the country we could make good revenue

ASIC Design: Why Sri Lanka is suitable

Starting capital is very less other than the EDA tools.

Unlike other industries one of the main advantages is that the starting capital is very less. Starting capital is one of the main barriers for the other industries trying to start in Sri Lanka

ASIC Design: Why Sri Lanka is suitable

Demand for IP cores are increasing day by day.

One of the main hot fields in semiconductor industry is designing IP cores. And the demand is going up day by day. Currently India has taken the frontier in designing IP cores.

ASIC Design: Why Sri Lanka is suitable

New technologies are presented and they open up whole new areas to work on.

New technologies are introduced in every field in electronics. (Examples: 5G, HEVC etc.) And a lot of hot topics are introduced to the semiconductor industry because of this.Like SDnSDrSDx

ASIC Design: Why Sri Lanka is suitable

We should Develop lot of IT people like India Develop facilities like internet ,

communication , and ease of access to knowledge

Exploit the fact that we have most cheapest engineers in the world.

Agricultural ElectronicsMachineries for sorting and packaging

Rice cultivation is the main sort of the agriculture industry in Sri Lanka. Hence there are large scale, middle scale and small scale rice mills. There, sorting of rice and packaging is an increasing necessity.

There are developed machineries for sorting and packaging which are manufactured in China and India. But these machines cost a lot. Hence only large scale mill owners can afford such high prices to buy those machineries. Hence the middle and small scale mill owners cannot afford such high prices.

Sri Lanka has the mechanical and electronic knowledge to design and fabricate the machineries

There is good customer base within and outside the country for these types of machineries

Efficiency and effectiveness can be increased by such machineries

pH Meter

Testing pH value is important in Agriculture

It has a strong influence on how well your crops will grow. (The balance of Acid forming

nutrients and Alkaline forming nutrients  will influence root development, microbial activity, fungi, symbiotic nitrogen

fixation by legumes and the availability of nutrients) Sri Lanka is an agricultural country.

Large scale cultivations Domestic cultivations and gardening.

Applying scientific knowledge in agriculture will increase harvest and bring

profits.

Hence, pH meter is a marketable product in Sri Lanka which has an economic

value.

pH Meter

Is it possible to develop a pH meter in Sri Lanka We have resources to research on this product

o Universities, Resource persons, Engineers

Government has special attention in developing agriculture.o Government support

Stable Marketo Sri Lanka is an agricultural country.

Competition in the Local Market Imported products available in the local market from brands like Hanna,

Eutech. 

Medical Electronics:

Strengths

Medical electronic equipment belongs to a very niche market. A niche market is the subset of the market on which a specific product is focused. The market niche defines the product features aimed at satisfying specific market needs, as well as the price range, production quality and the demographics that is intended to impact.

Unlike the consumer electronics barrier to enter to this market is very high in this field. Niche market is highly specialized, and aiming to survive among the competition from numerous super companies. Although barriers sound like a weakness in this case it gives us an added advantage. Since medical equipment’s needs extensive testing, highly regulated, Very high expected quality, most of the consumer electronic manufacturing organizations don’t focus in this area.

Various sources expect the Medical Electronics industry to reach around USD 2+ Billion in 2015 growing at a 17% for the last five years from a size of USD 850+ Million in 2009.Because of the huge market growth , there is an ability to enter the market or penetrate the existing market.

Medical Electronics:

Weaknesses

1. Manufacturing incentives

The medical electronics industry is largely dependent on imports. Most hi -tech Innovative products and technologies originate from a well-developed ecosystem and innovation cycle, which needs to be developed in Sri Lanka. Incentives must be given to achieve an indigenous manufacturing ecosystem which over a period of time will reduce our dependence. 2. Human Resources in HealthcareTechnicians are critical for proper use and operation of medical electronics equipment. 3. AdoptionMajor cities drive the demand for medical electronic devices however it is significantly lower for smaller cities/town/rural areas. 4. AffordabilityThis challenge can be met by a joint effort from all stakeholders towards innovative development of solutions that fit well into the economic conditions varying from urban to rural Sri Lanka. 

Power Supplies, Signal Generators

In Sri Lanka, the requirement of these is mostly fulfilled by importing the products (American products like Tektronix and Agilent). Even though the targeted market is low in Sri Lanka, the importing of these products can be controlled. If these products can be made with high accuracy and reliability, exporting of these products can be considered.

Strengths: Skilled low cost labors, Sri Lankan market can be targeted

Weaknesses: Initial capital for a startup

Threats: Branded products with special features will be a threat when exporting

Opportunities: Local market can be targeted

Stakeholder Interviews

Stakeholders of IP core Development: Vendors of tools, students, existing companies, professionals in the field, University

Millennium IT Testability

▪ Functional Verification▪ Functional Coverage▪ Design Coverage

Reliability▪ Get only the most generic ip-cores like pci , axi ipcores from

the vendors.▪ Develop custom ip-cores in-house.

Stakeholder Interviews

Atrenta develops IP core development tools (Spyglass

and Gensys) Synopsys acquired Atrenta a possibility of establishing IP core

development branches in Sri Lanka Atrenta's second largest R & D branch is in

Sri Lanka (1st India) an indirect connection with global IP core

industry

Stakeholder InterviewsSpyglass - checks the RTL and gives the designers an insight about the design at an early stage. (reduce time-to-market)

GenSys - an RTL restructuring tool (reduces human effort at restructuring)

Main clients: Apple, Intel, HITACHI, Canon, LG, Panasonic, Motorola, Siemens etc.

How can Atrenta help? gives free product training for new users free customer support for all the users customers can request features for their own

requirements quick software fixes according to customer feedback.

Proposed strategies Developing University based R&D institutes A connected program among universities Commercialize the research with the help of

Industry Getting training programs from vendors like

MENTOR GRAPHICS, SYNOPSYS A continuation of FYP projects Encourage students to get familiar with EDA

tools Government support to increase the number

of licensed EDA tools.

Proposed Strategies

Time to market When it comes to time to market , the

problem is the requirements of the current market is unknown. So the company have to analyze the current trends and predict new requirements.

Most of the time company create a new requirement by themselves.