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Brighter Prospects for Electronic Hardware Manufacturing in India

The Interim-Union budget of India was presented on February 1, 2019. One of the highlights of the budget has been a focus on making India the manufacturing hub of emerging technologies.

 

For technologies such as AI, Big Data, VR, IoT, and 3D printing, the government plans to encourage training and adoption. The government also plans to launch an initiative that invites foreign investors to set up plants that manufacture electronic hardware. This includes batteries, semiconductors, laptops Solar PV cells, computer servers, and Lithium cell batteries.

 

One important advantage of inviting foreign companies to manufacture in India is that it will reduce India’s over-dependence on electronics imports. India’s Finance Minister, Nirmala Sitharaman, has expressed that foreign companies will be invited to go through a bidding process from which the chosen companies will be granted a number of benefits such as tax exemption.

 

Electric Vehicles

Making India a global hub for electric vehicles is one of the focus areas of the budget. The government has decreased the goods and sales tax (GST) on electric vehicles from 12% to 5%. Similar attempts have also been made to make electric vehicles more affordable. Over the interest paid on loans for buying electric vehicles, buyers would be able to avail an additional tax deduction of 1.5%.

 

The National Research Foundation

The Government of India has also forwarded a proposal to set up the National Research Foundation (NRF). The purpose of the NRF is to encourage and fund scientific research within the country. Under the Aspire scheme, the Finance Minister of India has proposed the setup of 20 technology business incubators in 2019 and 2020.

 

The Finance Minister has expressed that as the NRF is set up, it will promote technical development within India itself. This would involve technologies such as Robotics, Big Data, and AI, which are scalable on a global scale.

 

The NRF has the potential to bring India at par with the top technological superpowers in the world. A few of the other efforts that the Government of India is making include setting up a national AI center and national AI portal which are oriented towards making India a technological manufacturing hub. This would work towards transforming India’s global image from being a SaaS provider to a product creator.

 

National Electronic Policy

Encouragement for electronic manufacturing in India is evident from the National Electronic Policy (NEP), which was rolled out by the Government of India in February 2019. This provides a further impetus to the ‘Make in India,’ or MII, movement. India will now be empowered to become an international Electronic System Design and Manufacturing (ESDM) hub. This makes the electronics sector more powerful as well. The programs have been put in place with the intention of taking electronics manufacturing in India to the next level.

 

India is a rising economy, and also the world’s largest market for smartphones. In spite of that, the state of electronics within India is not competitive. With the National Electronic Policy, things will be changing for the better.

 

It was in 2012 that the previous electronic policy had been revealed. With the new policy in place, a $400 billion growth is expected through the year 2025. This would be through employing 10 million people, both directly and indirectly. The targeted growth rate stands at 32%. This is vastly seen as a time of significant transition in the electronics and manufacturing industry in India. While a strong foundation will be laid for the ESDM industry, the sector will come across significant growth and transformation.

 

A few of the guidelines mentioned within the NEP include subvention over interests for manufacturers, assured credits and fresh clusters for manufacturing. A sovereign patent fund will also be created over the same lines. Mr. B. Thigarajan, the Joint Managing Director of Blue Star, has expressed that the benefits of indigenization of manufacture of electronics are going to be outstanding for Indian market conditions.

 

Air Conditioning

Currently, the air conditioning industry in India is at $ 2.9 billion. Of that, $725 million is comprised of segregated costs involved with electronic components and their manufacturing.

 

Over a period of five years from now, this share will see a 100% growth and will expand to $ 1.45 billion.

 

There are a number of ways in which the indigenization of the manufacturing of electronic components helps the economy, Mr. Thiagarajan expressed. It makes cold chain facilities and IoT based refrigerators cheaper. He believed that as India is possessed with domestic competence and capabilities in the area, India must do its best to reduce the reliance on imports.

 

Another advantage of the move is that it works towards enhancing the nation’s export portfolio in terms of electronic components. An export-driven market is essential for the creation of a manufacturing country.

 

Overview of the 2019 National Electronic Policy

NPE becomes significant with regard to the prevailing market conditions and forecasts characterized by higher demands in domestic markets, higher imports and untapped potential for electronic manufacturing.

 

Currently, India does not have an edge in electronic manufacturing even though it is a rising economy. There is a high reliance on imports, but the sector has nevertheless shown momentum over previous years.

 

  • The estimated global electronic production was $1.74 billion in 2017. There has seen a yearly growth rate of 5%.
  • For 2017 and 2018, the production of electronic hardware in India has grown to $59 billion. The rate of growth stood at 26.7%.
  • India accounted for 3.4% of global hardware electronics production in 2018.
  • For 2017-18, the import of electronic goods in India was approximately $53 billion.

While the rise in demand for electronic hardware would make the figure stand at $400 billion in 2023-24, the import bill becomes significant and unaffordable for the Indian economy. This is why it is important to promote the manufacturing of electronic hardware at a domestic level.

 

Positive Developments that Promote the EDSM sector in India

In recent years, the production of LED and LCD TVs, mobile handsets and light-emitting diodes (LEDs) have come across a significant upswing. To a significant extent, the demand for these products within India is met through domestic production.

 

The Phased Manufacturing Program (PMP) is a significant development in this regard. The manufacturing ecosystem of the nation has been enhanced with PMP, which has been oriented towards mobile devices and their assembly components.

 

Inviting foreign players to set up electronic manufacturing facilities in India is a step forward which effectively meets the goals of NPE, 2019. This benefits the economy in numerous ways including cutting costs and the creation of new job opportunities.

 

About Circuitronix

Circuitronix is one of the companies that is opening a manufacturing facility for electronic goods in 2020. We will be building a new PCB (Printed Circuit Boards) factory in Gujarat, India.

 

In the US, China, Canada, and Europe, Circuitronix is a well-established brand, renowned for making high-quality PCBs that are used in a variety of products. This is highly beneficial from the Indian perspective as PCBs are one of the most commonly used electronic components and their demand in India is high.

 

The demand for PCBs grows every year. Therefore, the manufacturing of PCBs in India is going to be a significant economic improvement over importing them from abroad.

 

Circuitronix can produce PCBs in both quick-turn and regular lead-times. They are a leading supplier of flexible, rigid and rigid-flexible PCBs and are known for their stringent quality control standards. Circuitronix delivers its services across a wide array of industries, including automotive electronics, medical, appliance instrumentation and control, and telecommunication.

Electronica 2018 Recap

Electronica is the world’s leading trade fair and conference for electronic components, systems, applications, and solutions. Electronica is a display window for innovation and trends: It shakes the status quo and gives us a glimpse into the future. Acting as a think-tank, it gives decision-makers, engineers, and developers that all-important inspiration.

 

Circuitronix showed at Electronica for the first time in 2018 and it was a resounding success. We dazzled with a first-class booth that combined outstanding hospitality with comfortable meeting areas to be able to hold meetings with the many visitors that graced us during Electronica. Circuitronix set the bar high and even sped past our own high standard by adding a classically trained violinist that played beautiful music at our booth to entertain those that visited us as well as all others in our hall.

 

Circuitronix continues to strive for greatness in quality, service, and cost for all of our customers. Our trade fair at Electronica shared a glimpse of that philosophy and goal that permeates the whole of Circuitronix. Come see what Circuitronix can do for you and your company…You will be glad you did.

Check out the Recap Video:

View on YouTube: https://youtu.be/zuCVIybKeTI

The Advantages of Sourcing PCBs from China in 2019: Why Tariffs Alone Shouldn’t Affect Where You Manufacture Your PCBs

The momentum that China has in all aspects of manufacturing is hard to ignore. Over the last few decades, manufacturing in China has grown exponentially and now contributes $2 trillion accounting for 27% of its national output [1]. This puts China ahead of the United States, Japan, and Germany making them the manufacturing capital of the world and the PCB industry is no exception. With 67% of the world’s circuit boards manufactured in China (when including Hong Kong) [2], China also leads the rest of the world in this regard.

 

With the current trade war going between the United States and China, it is reasonable to wonder what impacts it has on PCB manufacturing in China. The reality is, all the advantages of doing business in China still stand even with the imposed tariffs. However, some companies are choosing to move their manufacturing outside of China in an effort to keep their costs identical to the costs before the trade war began. The reality is, PCB manufacturers outside of China don’t have the capacity to take all of China’s business away. So, once manufacturers in those countries reach maximum capacity, the laws of supply and demand will raise prices outside of China, making any cost savings virtually nothing.

 

In their attempt to keep manufacturing costs identical, companies moving outside of China are losing access to the advantages that made it the industry leader. Chances are your product will still be in production long after the trade war is over. Moving production back to China will then come at a cost, and that cost will likely be more expensive than the savings of moving production outside of China during the trade war.

 

Now, let’s look at the advantages that made China the world’s leader in PCB manufacturing.

 

1. The Obvious: Cost

It is no secret that PCB manufacturing in China has been and continues to be an excellent value compared to other regions of the world. It has been able to maintain a dominant position over the years, yielding cheaper prices for customers. Lower prices make the decision of going into prototyping and pre-production stages easier and less risky which, in the end, will yield better and more proven hardware for your products as you can add an extra tape-out without putting your budget at risk.

 

2. The Chinese Manufacturing Culture

Being the world leader of PCB manufacturing can only be achieved by providing quality boards at low prices that facilitate repeat business opportunities. Chinese factories manufacture more PCBs than anywhere else in the world and therefore have gained the expertise that comes with such volume. There is an enormous infrastructure in place and an even bigger workforce with 700,000 direct jobs in the PCB industry [3].

 

3. High-Quality is the Standard

PCBs are born from guidelines and specifications where designers, in addition to the actual circuits, determine the acceptable constraints (trace width, trace space, hole size, layer count, etc.). Since most of the PCB manufacturing processes are automated, once these constraints have been achieved by a manufacturer, they can be easily repeated. Therefore, high-quality PCBs manufactured in China has become the standard.

 

4. Quick Turnaround Time

Another aspect that is part of the Chinese manufacturing culture is the quick turnaround time. A factory is equivalent to a pipeline and having a high volume means that projects go in and out of the factory rapidly. As for shipping, express air services can get your PCBs to your doorstep anywhere in the world in just a couple of days. In addition, if you are having the following steps of the assembly process done in China, you are taking the fast lane and reducing shipping time to a minimum by working inside the same country.

 

5. So Much Around

China being the manufacturing capital of the world, when you have a PCB made in China, you have access to a myriad of partners in close physical proximity: components sourcing, final product assembly, EMC testing, etc. This ecosystem makes consumer electronics product manufacturing easier and faster.

 

6. See the World

Chances are you (or your employees) will never have to see the inside of a factory in your life, and with the current state of globalization, remote collaboration has never been easier. However, it can be interesting for employees to have the chance to travel to China as part of their work. Employers offering such possibilities have a better chance to hire the talent they need and are therefore more competitive.

 

About Circuitronix

Circuitronix is a leading supplier of rigid, flexible and rigid-flexible printed circuit boards in small, medium and high volumes. We are capable of both quick turn and regular lead-times. We assure complete adherence to customer specifications and consistency in quality control through effective process control. Circuitronix has a proven track record in serving its reputed clientele across multiple industries including automotive electronics, instrumentation and controls, railways, telecommunications, medical, health, and fitness aerospace, defense, consumer electronics and many more.

 

In conclusion, there are many advantages to have PCBs done in China. If your company has not made the jump yet, it is most likely that now is the right time!