News Article
Local Indian market consumer boom attractive for semiconductor investors
In India, where 70 percent of citizens earn less than $5,000 a year, buying a television is not an option for many consumers.
In India, where 70 percent of citizens earn less than $5,000 a year, buying a television is not an option for many consumers. Surprisingly, however, Indians have shown remarkable interest in buying televisions, even the more-expensive flat-panel sets, mostly because of increased awareness, rising availability and declining prices, according to iSuppli Corp.
“India is emerging as a major force in the global television market in terms of domestic consumption as well as in production of sets,” said Riddhi Patel, principal analyst for television systems at iSuppli. “While there remain disparities in terms of the economic status of television buyers, set sales in India are experiencing strong growth.”
This portends of a very promising future for electronics consumption in India. With a market poised for growth the potentials will surely deliver a welcome climate for any proposed investors looking to tap the semiconductor market.
With India’s television market set to grow to 18.7 million units by 2011, expanding at a Compound Annual Growth Rate (CAGR) of 9 percent from 12.1 million units in 2006 this will have a huge impact to local semiconductor manufacturing. On the revenue side, overall television sales will reach $4 billion by 2011, rising at a CAGR of 9.6 percent, up from $2.5 billion in 2006, according to iSuppli.
The figure shown presents iSuppli’s forecast for the Indian television market for both units and revenue for the period of 2006 through 2011.
CRTs still dominate market
While Flat-Panel-Display (FPD) televisions are gaining sales momentum in India, CRT televisions still have a leading position in the nation because the higher prices of Liquid Crystal Display Televisions (LCD-TVs) and plasma sets have discouraged their adoption in most parts of the country, Patel added.
Many consumers in India buying their first television sets are looking at 21-inch and smaller CRTs as starter sets. However, this carries over to the replacement market as well, where consumers are attracted to 29-inch flat-face CRT TVs as alternatives to LCD-TVs because of their lower prices. It is the urban areas, where consumers are looking for replacement sets or buying second televisions, where there is a likelihood of flat panels gaining some market share.
Manufacturing on the rise
Television set manufacturing continues to rise in India, with both domestic and overseas firms increasing their production bases in the country. This is due to a number of reasons, including:
• Low-cost skilled labour
• Availability of a qualified workforce
• An untapped domestic market
• Special economic zones that provide tax-free environments
• Other tax and financial support breaks
Factories in India are cropping up in less-developed regions because of tax breaks given by the government in order to improve the living conditions of citizens as well as to promote investments in television production in the country. India has an excellent component supply base in terms of manufacturing facilities for glass and colour picture tubes so it makes it a good fit for companies striving to take advantage of this emerging market.
LG Electronics recently established an LCD-TV manufacturing plant in Pune, Panasonic is interested in setting up an LCD facility in the nation and TCL has plans to manufacture CRT TVs there.
“India is emerging as a major force in the global television market in terms of domestic consumption as well as in production of sets,” said Riddhi Patel, principal analyst for television systems at iSuppli. “While there remain disparities in terms of the economic status of television buyers, set sales in India are experiencing strong growth.”
This portends of a very promising future for electronics consumption in India. With a market poised for growth the potentials will surely deliver a welcome climate for any proposed investors looking to tap the semiconductor market.
With India’s television market set to grow to 18.7 million units by 2011, expanding at a Compound Annual Growth Rate (CAGR) of 9 percent from 12.1 million units in 2006 this will have a huge impact to local semiconductor manufacturing. On the revenue side, overall television sales will reach $4 billion by 2011, rising at a CAGR of 9.6 percent, up from $2.5 billion in 2006, according to iSuppli.
The figure shown presents iSuppli’s forecast for the Indian television market for both units and revenue for the period of 2006 through 2011.
CRTs still dominate market
While Flat-Panel-Display (FPD) televisions are gaining sales momentum in India, CRT televisions still have a leading position in the nation because the higher prices of Liquid Crystal Display Televisions (LCD-TVs) and plasma sets have discouraged their adoption in most parts of the country, Patel added.
Many consumers in India buying their first television sets are looking at 21-inch and smaller CRTs as starter sets. However, this carries over to the replacement market as well, where consumers are attracted to 29-inch flat-face CRT TVs as alternatives to LCD-TVs because of their lower prices. It is the urban areas, where consumers are looking for replacement sets or buying second televisions, where there is a likelihood of flat panels gaining some market share.
Manufacturing on the rise
Television set manufacturing continues to rise in India, with both domestic and overseas firms increasing their production bases in the country. This is due to a number of reasons, including:
• Low-cost skilled labour
• Availability of a qualified workforce
• An untapped domestic market
• Special economic zones that provide tax-free environments
• Other tax and financial support breaks
Factories in India are cropping up in less-developed regions because of tax breaks given by the government in order to improve the living conditions of citizens as well as to promote investments in television production in the country. India has an excellent component supply base in terms of manufacturing facilities for glass and colour picture tubes so it makes it a good fit for companies striving to take advantage of this emerging market.
LG Electronics recently established an LCD-TV manufacturing plant in Pune, Panasonic is interested in setting up an LCD facility in the nation and TCL has plans to manufacture CRT TVs there.
