India Ready to Be R&D Destination, But Market Needs to Grow More for Manufacturing’

G. Niranjan, General Manager, ROHM (ASEAN+India region)

G. Niranjan, General Manager, ROHM (ASEAN+India region)

While a slew of enabling and incentivised measures taken by the Union government of India, state governments and Industry in the recent years to promote investments in India and making it the most efficient and profitable manufacturing hub in Asia have started to show results, many companies are still in the process of weighing all possible pros and cons before expanding or shifting base to India.

ROHM, headquartered in Kyoto, Japan is today a worldwide leader in Semiconductors and ICs. It has expanded globally with 11 design centres, 10 QA centres and penetration into almost every developing market through its sales offices. An important player for ESDM sector as a whole with a diligently-crafted 4 growth engines for further expansion, their view of India as a market and investment destination is a neutral indicator of actual environment for investment in India.

In a conversation with Ranjan Srivastava of EFY Group, Mr. G. Niranjan, General Manager, Business Development & Technical Marketing (ASEAN+India region), ROHM Semiconductor Singapore Pte. Ltd., Singapore talks extensively about their India market strategy and how they assess and plan to expand into the Indian market. He indicates while they are fully aware of India’s potential as a market and its design and R&D capabilities, several business decisions are also driven by other market/region realities like ‘made in’ markets and ‘made for’ markets.

Below is the edited version of the interview.

EFY: To begin with, India remains a sales destination for you as an emerging market. Have you explored the possibility of making it a manufacturing destination given the fact it has become highly opened, incentivised and smooth-functioning for foreign investment?

Including India, Asia is definitely the most important market for ROHM with the production and R&D of electronic/Semiconductor products in Asia. To have a speedy and accurate support for the growing India market, we have started intensive sales activities within India.

To fulfill the needs of our customers, we started a representative office in Chennai in 2006. And since April 2011, we have locally incorporated company, and FAEs (Field Application Engineers) in the four major cities (Delhi, Pune, Bangalore, and Chennai) to strengthen our customer support.

Ever since the establishment of our sales office, we have been co-operating aggressively with technically strong trading-houses to strengthen the foundation of our sales organization to promote ROHM solutions. We have been increasing the ROHM presence according to our market strategies in our automotive and industrial equipment customer base. In the future, we will be making use of our expertise in custom-LSI to develop ‘Made for INDIA’ products, and with that as a base, to strengthen our sales, including our discrete products (Transistors, Diodes, LEDs, Tantalum Capacitors, and Resistors).

Regarding exploring the possibility of making India a manufacturing destination, we are yet to explore by keeping in mind ROHM’s policy of “Made in Market”, which has made us to establish factories in Asia (Thailand, Philippines, Malaysia, Korea, China) driven by our ‘closer-to-customers’ approach by consistent supply of high quality products in large volumes to the global market.

EFY: While a lot of focus has been thrust upon growth of manufacturing sector by both the Indian government and investors, the potential of India in design has been largely untapped.You have established 11 Design centres across the globe. Any plans of tapping this potential in India given its capabilities?

There are 4 long-standing engines of growth for ROHM. 1) LSI synergy, 2) Power devices, 3) LED, and 4) Sensor Networks. Continuously promoting and expanding this is our way of accelerating growth.ROHM Logo

1) The “LSI synergy strategy” of Lapis Semiconductor: Developing various solutions by integrating the analog technologies of ROHM and the digital technologies of Lapis Semiconductor. Strengthening sales by developing new products in display drivers, high-capacity memory, lithium-ion battery monitoring ICs, and low-power micro controllers.
2) “Power devices strategy” with its peak at SiC (Silicon Carbide): ROHM has been putting in efforts in the automotive market by strengthening and promoting SiC devices and SiC power modules. In addition, we are also strengthening in the areas of existing silicon devices like the IGBT, highly efficient transistors and diode line-ups.
3) The total solution, “LED Solution”: Striving in expanding sales in LED related products by strengthening our “AGLED” brand of LED illumination products, expanding sales to mass retailers, and strengthening line-ups in LED illumination power modules, sensor devices, LED driver IC and discrete products.
4) Having pride in the wide lineup of “Sensor strategy”: With the existing sensor solutions of ROHM, and the MEMS accelerometer sensor from the acquisition of Kionix Inc, we are progressing into the smartphone and computer market. It is also our plan to strengthen ourselves in the fields of new innovative products, for example, gyro sensors.

ROHM fully understands the high quality & high performance capabilities in software designing of India including LSI Research & Design. In this aspect, we are always open to consider for our LSI R & D Centre in India for near future. It might be for both India & global market applications to drive ROHM’s above 4-growth engines for future.

EFY: As you mentioned, you have envisaged ‘total LED solutions’ as one of your engines for Global expansion. How do you see India as an investment destination for that sector?

LED lighting segment is the one of the most expected growth-industries in India. Of course, ROHM Group has broad line-up of components & solutions for this segment, with even LED Lighting finish-goods products. As of now, we are strongly promoting our LEDs, LED Driver IC & Module, and other discrete components for the customers of India.

With the higher needs for energy saving, LED illumination at home and in industrial usages are expected to rise. In the Japanese market, ROHM group is making use of our total solutions such as chip LED, driver IC, power modules, up to the final product such as LED-Lights. Sales have been rising for our LED products such as straight-tube(140 lumens/W) LED illumination for industrial uses, and ceiling lights for consumer usage.

ROHM is presently focusing on LED-lighting solutions for ‘India’s Automotive-segment’, which includes LED-Tail lamp/Rear-lamps, Head-lamp DRLs, Interior cabin-lighting & Infotainment applications. ROHM’s high-efficiency LED-drivers with built-in diagnostic function for DRLs/Rear-lamps are widely used worldwide and will be on road for India’s automotive 2-wheeelers & 4-wheelers soon.

EFY: As per market research estimates, LED market in India is set to grow about 8 times in next 5 years, from the current USD 143 million to USD 1279 by 2018. on account of humungous demand from both government and private sector. The Indian government too has responded to this situation by offering slew of incentive and preference measures. Have you evaluated this opportunity seriously and what are the plans for expansion in India in this sector?

ROHM started manufacturing of LEDs way back from 1973. We are always in search of new LED business opportunities in India. In fact, ROHM has wide variety of LED products for not only Lighting and also for all applications such as Automotive, Industry, Smart phone/Tablets and others. We will accelerate our promotion for our LED & related products along with technically strong trading houses. In addition, some of our trading houses are having capability of solution-design, so we can provide market oriented solution through those partner companies.

EFY: Where does India figure in your BCP (Business Continuity Plan) system, especially after the disastrous floods in Thailand in 2011?

For India market, ROHM supplies products from its Singapore HUB warehouse through our partner trading houses, so we can make redundancy & buffer at various levels like Factory, Singapore warehouse, and Trading houses before delivering to our valued customers in India.

Taking the example of the Thailand flood in October 2011, production and supply has been affected. But we persisted in our “Quality First” spirit, and managed to turn-around and resume our stable supply of high quality products and re-strengthened ROHM’s BCM (Business Continuity Management) throughout our global group companies, including manufacturing, logistics, sales and design centers.

EFY: Last but not the least, how do you see today’s India in current market scenario as your main manufacturing and Design hub? When will it change from sales location to ESDM location for you?

As we mentioned above earlier, there is huge potential for not only as sales location and also for LSI R&D and manufacturing in India. We will continuously monitor for the market situation and future trends especially when localization in manufacturing of consumer products for India, which is depending on our customers and infrastructure improvements. Meantime, we will continue to focus on the Automotive & Industry segment which are presently the growth areas.

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