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:

 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.
 Extends support to several global industries namely medical, telecommunications, industrial and
automotive sectors.
  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 players,
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.

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.