economic insight to electronic industry
DESCRIPTION
It is a project report to show where Electronics Industry stand now and what are its potential.TRANSCRIPT
PROJECT
ECONOMIC INSIGHT TO ELECTRONIC INDUSTRY
Anupama Daroch 07402 Harish Kumar 07414 Manish Thakur 07426 Kr. Rajeev Ranjan 07438 Guru Prasad Das 07450
PROJECT ECONOMIC INSIGHT TO ELECTRONIC
INDUSTRY
INTRODUCTION:
The electronics industry is center stage in today’s transforming and globalized market. As such, improving and even accelerating high‐technology innovation, while ensuring its propriety, will be instrumental if the world is to maintain its competitive advantage for continued economic prosperity and indispensable national security. India is the fifth largest economy in the world and has the second largest gross domestic product among the emerging economies. Owing to its large population, the potential consumer demand is ever increasing and consequently under appropriate conditions, strong growth performance can be expected. The liberalization of the Indian economy that began in 1991 has started changing regulatory, financial, and monetary policies leading to a higher pace of growth. The software industry in India is already a world leader. Electronics and Information Technology is the fastest growing segment of Indian industry both in terms of production and exports. Today, the electronics industry is completely delicensed with the exception of aerospace and defence electronics, and along with the liberalization in foreign investment and export‐import policies of the entire economy, this sector is attracting considerable interest not only as a vast market but also as potential production base by international companies. Background:
The electronics industry started its first production during early 1930’s and has grown rapidly in the recent years, with sales increasing by a factor of 15 since the early 1960’s. Electronic sales, which were $120 billion in 1986, has increased over $1 trillion with an average annual rate of 12% in United States. The main impetuses for such phenomenal market growth are the intrinsic pervasiveness of electronic products and the continued technological breakthroughs in integrated circuits. With the upcoming of VLSI technology 105 components per chip has been achieved by which size of electronic devices has drastically decreased. With decrease in size the complexity of device has increased which accounts for its slowed growth in recent years because of difficulties in defining, designing and processing complicated chips.1 The Indian Electronics industry dates back to the 1960s, was driven mainly by the state and was initially restricted to the development and maintenance of fundamental communication systems including radio broadcasting, telephonic and telegraphic communications and augmentation of defence capabilities. Main players were public sector giants like Bharat Electronics Ltd and Indian Telephone Industries Ltd. The late 1980s and 90s saw the liberalization and globalization of the Indian economy and the electronics industry too witnessed a boom, mainly in the consumer electronics area, driven by a growing middle class with larger disposable incomes. The 1980s saw growth rates in excess of 30%, which had slowed down to 7% by 2001‐02, due to various factors such as slowdown in the Indian economy, saturation of demand in products such as TVs and increasing competition from cheaper imports due to a fall in customs duties.2
PROJECT ECONOMIC INSIGHT TO ELECTRONIC
INDUSTRY
Purpose: 1) We focus on the electronics sector for several reasons. Firstly, it is a sector which is expanding rapidly and whose effects are permeating the production structures of virtually every activity in the manufacturing and service sectors. Secondly, it is a sector which in principle has a high level of globalization potential. Its production is effectively footloose, being virtually independent of resources other than capital, for which there is now a global market, and labour, both skilled and unskilled. Thirdly, because of the relative weightlessness of many of the products of the sector, transportation costs, which can often play a vital role in linking production to consumption, are a trivial part of total costs. For these reasons, differences in factor costs, effectively the costs of skilled and unskilled labour, can drive the global production location decisions for different fragments in the production process. 2) Indian Electronic Industry today accounts for very feeble parts of total GDP. ST Microelectronics, Perrot Communication, Sasken are some of the very few indigenous electronic firm that are involved in research and development in the field of electronics. Today, 60 years after independence as Indian economy continues to beat many a odds but till date no electronic firm has an electronic manufacturing facility in India. Being a student of Electronics Engineering, we would like to purpose the detailed study and analysis of every aspect of Electronics industry so as to utilize our resources to the fullest. 3) We propose to discuss all the governmental policies that have been implemented by the state to encourage the electronic industry and those which are still lying on the table to get recommendations.
4) We would like to highlight some of the major milestones of this industry with the help of some case studies that we have done. We have chosen the companies that are dominating the world market and the Indian Territory.
5) Finally we would like show how Indian company that have its market concentrated in its domestic territory, is not little influenced by the recession and what are the counterparts faced by the multinational company. We have specially highlighted about the BEL which is a government Enterprise, has least affect of this recession. 6) We would like to summarize the current thinking on intermediation and disintermediation, extract candidate drivers for this cycle, capture the expert opinions on what is driving the cycle and determine the quantitative and qualitative conclusions related to the electronics industry supply network integration and requirements for its success.
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REVIEW OF THE LITERATURE:
The year 2008 had been a mixed bag for the Indian electronics industry. Especially, the economic slowdown raised clouds of confusion and fear. But the companies continued to thrive despite all odds. Tomorrow is uncertain, but the companies seem prepared and upbeat about the Indian electronics industry. We tried to cover as many as sub‐sets as possible within the electronics industry. One thing that we found common amongst most of the responses was that everyone is quite confident about the potential India holds. While many choose to stay away from the hard hitting question “how to survive the economic slowdown,” some did touch upon the topic. Here are the versions of the leading companies of India:
V. Ramachandran, Director‐marketing, LGEIL (LG Electronics India Limited) feels that “The Indian market looks very promising with the new‐age consumers not only looking at mobility and basic computing features but yearning for more technologically advanced features. The market is fast moving towards high‐end customised products which are both technologically advanced and aesthetically designed to complement the modern households. The need right now is to continuously innovate and come out with product variations across categories to meet the expectations of a varied class of customers. Consumers are now looking at products which are not only functional but have futuristic design and sleek looks. In such a scenario, it has become imperative for companies to take their product design seriously.
To conclude, our top priority in coming years will be to maximise customer satisfaction and heighten the competitive edge of our flagship products. Though the recent global recession has had its effect across sectors, we at LG believe that ups and downs in the economy are a usual feature and follow each other. That’s how the economic cycle works. After this entire US sub‐prime crisis, which has also affected the Indian businesses to a great extend, there has been a considerable slowdown in the industrial growth. But we acknowledge that this is a temporary phase and the economy will boom soon.” 4
S.Jagannathan, Head of Technology Innovations, Tata Elxsi holds the view that “With India emerging as the fastest growing telecom market, it is not surprising that chipmakers are honing their skills in this space. India’s electronics industry is growing five times faster than the global electronics communication market, and as the demand for technology increases each day, India’s design engineers are well set to embrace this opportunity. However, Indian engineers need to apply their knowledge of chip and embedded system design to benefit society at large, especially the poor, and in application areas such as agriculture, flood control and medical services. The vast
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talent that India has embedded system must move beyond merely finding application in cars and mobile handset, for instance and be use in lives of common people.
The Indian industry should concentrate on the domestic recruitments for ICT and IT application, ranging from training and education, health care to e‐governance. Presently companies are too involved with export market for IT and ICT services. Development of application in local language could be one area and IT‐based education delivery could be another. The debt‐to‐GDP ratio in the USA, the UK, and the European country is in the range of 200to 250 pc while in India its just 60 pc. This makes us pretty immune to the crisis of similar nature that western country is facing. Another point here in India is the increasing give‐take‐ratio between cities and rural areas.” 4
George Paul, Executive Vice President, HCL Infosystems holds the view that “ The past has been momentous to the electronics industry in India. If we move three decades back and compare the scenario, we realise how the industry has behaved against the different market forces. Over these years, the industry has seen the emergence of many brands in the market and what used to be popular in the years gone by is seen no more. The components for radio‐broadcasting, telephone and telegraphic communication, which were the earlier focus of the electronics industry, experienced a great growth in the nineties when the Indian government started opening doors to liberalisation and globalisation.
Undoubtedly, the in‐house manufacturing activities have improved in the past few years. HCL itself has contributed a lot of these activities. Even companies such as Nokia have set up their manufacturing plants in India. These are the indications that the trend will pick the pace. The move will ultimately bring the prices of gadgets such as laptops and mobile phones down, making the market more competitive. We, through our detail project analysis see no reason why India cannot emerge as a manufacturing hub in the coming years. There are a few areas that need focus‐from building infrastructure to availability of raw material –we at HCL believe that the things are moving in the right direction.” 4
PROJECT ECONOMIC INSIGHT TO ELECTRONIC
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METHODOLGY:
For the purpose of establishing various facts about electronics industry and its trend both in back years and upcoming years, we went through different literary works done by the said authors, different magazines based on electronics industry. Moreover we derive some of the conclusions from the statistical data released both by national and international community for electronics such as World Electronics Circuit council as well as data acquired from the Economic surveys of India which proves the relevancy of the facts. In addition to that we browsed out data and facts from web based services and various abstracts available to us. We also got the survey report from Electronics For You magazine; which considered 60 companies for purpose of conducting the survey and the sample was based upon microcosmic representation of India’s electronics sector. They asked six standard questions from Senior technical executives regarding:
1. Impact of the global economic meltdown on their organization. 2. Intensity of the impact 3. Their counter‐strategy 4. Areas of cost‐reduction 5. Ways to increase sales 6. Expansion plans
We would like to present the current scenario of the current status of the electronic industry in highlight with some of the major companies that dominate the world market and the Indian territory.
CASE STUDY, FINDINGS AND ANALYSIS: Market Overview: The global electronics industry is growing rapidly. From an estimated size of US$ 950 billion in 2005, it is estimated to grow to nearly US$ 2100 billion by 2010. The market is dominated by Asian countries such as China, Taiwan, Singapore and South Korea. The industry is characterized by rapid innovation and speed to market, short product life cycle, highly automated manufacturing to give consistent quality at low cost, high volume production, continuous improvement in capabilities for reducing costs and profit accrual through volumes. India’s electronics industry is nascent by global standards. Despite a population of over one billion, India has a relatively small electronics market. It is ranked twenty‐sixth worldwide in terms of sales and twenty‐ninth in terms of production. The total size of the industry in 2004‐05 was US$11 billion.5,6,9.
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Bharat Electronics Limited13
Bharat Electronics Limited (BEL) was established at Bangalore, India, by the Government of India under the Ministry of Defence in 1954 to meet the specialised electronic needs of the Indian defence services. Over the years, it has grown into a multi‐product, multi‐technology, multi‐unit company serving the needs of customers in diverse fields in India and abroad.
BEL offers products and services in a wide spectrum of technology like Radars, Military Communications, Naval Systems, Electronic Warfare Systems, Telecommunications, Sound and Vision Broadcasting, Opto‐Electronics, Tank Electronics, Solar Photovoltaic Systems, Embedded Software and Electronic Components. With its expertise developed over the years, the company also provides turnkey systems solutions. Defence continues to be BEL’s prime focus but the Company has also diversified into civilian areas. Some of the successful civilian products include the Electronic Voting Machines, Solar Powered LED‐Based Traffic Signal Lights, Simputers and Set Top Boxes.
BEL offers contract‐manufacturing services for both domestic and international customers. It has automated assembly, inspection and testing facilities as also precision machining capabilities. It adheres to strict process and manufacturing standards, producing world‐class products.BEL has its corporate office at Bangalore and manufacturing units at nine locations in India. A network of marketing and customer support centers across India completes the vertically integrated company profile. Two offices, one in New York and the other in Singapore mark the company’s current international presence.
Bharat Electronics Limited (BEL) is an electronics company with about nine factories, and few regional offices in India. It is owned by the Indian Government & primarily manufactures advanced electronic products for the Indian Armed Forces.BEL is one of the eight PSUs under Ministry of Defence, Government of India. It has even earned the government's Navratna status.
Corporate Profile:
BEL is a PSU under the Government of India Enterprise. ces products for It mainly deals and produ
1. Defence Organisation
2. ISRO and Ministry for Information Broadcasting.
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Historical background and Milestones
The growth and diversification of BEL over the years mirrors the advances in the electronics technology, with which BEL has kept pace. Starting with the manufacture of a few communication equipment in 1956, BEL went on to produce Receiving Valves in 1961, Germanium Semiconductors in 1962 and Radio Transmitters for AIR in 1964.
In 1966, BEL set up a Radar manufacturing facility for the Army and in‐house R&D, which has been nurtured over the years. Manufacture of Transmitting Tubes, Silicon Devices and Integrated Circuits started in 1967. The PCB manufacturing facility was established in 1968.
In 1970, manufacture of Black & White TV Picture Tube, X‐ray Tube and Microwave Tubes started. The following year, facilities for manufacture of Integrated Circuits and Hybrid Micro Circuits were set up. 1972 saw BEL manufacturing TV Transmitters for Doordarshan. The following year, manufacture of Frigate Radars for the Navy began.
Under the government's policy of decentralization and due to strategic reasons, BEL ventured to set up new Units at various places. The second Unit of BEL was set up at Ghaziabad in 1974 to manufacture Radars and Tropo communication equipment for the Indian Air Force. The third Unit was established at Pune in 1979 to manufacture Image Converter and Image Intensifier Tubes.
In 1980, BEL's first overseas office was set up at New York for procurement of components and materials.
In 1981, a manufacturing facility for Magnesium Manganese Dioxide batteries was set up at the Pune Unit. The Space Electronic Division was set up at Bangalore to support the satellite programme in 1982. The same year saw BEL achieve a turnover of Rs.100 crores.
In 1983, an ailing Andhra Scientific Company (ASCO) was taken over by BEL as the fourth manufacturing Unit at Machilipatnam. In 1985, the fifth Unit was set up in Chennai for supply of Tank Electronics, with proximity to HVF, Avadi. The sixth Unit was set up at Panchkula the same year to manufacture Military Communication equipment. 1985 also saw BEL manufacturing on a large scale Low Power TV Transmitters and TVROs for the expansion of Doordarshan's coverage.
1986 witnessed the setting up of the seventh Unit at Kotdwara to manufacture Switching Equipment, the eighth Unit to manufacture TV Glass Shell at Taloja (Navi Mumbai) and the ninth Unit at Hyderabad to manufacture Electronic Warfare Equipment.
In 1987, a separate Naval Equipment Division was set up at Bangalore to give greater focus to Naval projects. The first Central Research Laboratory was established at Bangalore in 1988 to focus on futuristic R&D.
1989 saw the manufacture of Telecom Switching and Transmission Systems as also the setting up of the Mass Manufacturing Facility in Bangalore and the manufacture of the first batch of 75,000 Electronic Voting Machines.
The agreement for setting up BEL's first Joint Venture Company, BE DELFT, with M/s Delft of Holland was signed in 1990. Recently this became a subsidiary of BEL with the exit of the foreign partner and has been renamed BEL Optronic Devices Limited.
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The second Central Research Laboratory was established at Ghaziabad in 1992. The first disinvestment (20%) and listing of the Company's shares in Bangalore and Mumbai Stock Exchanges took place the same year.
BEL Units obtained ISO 9000 certification in 1993‐94. The second disinvestment (4.14%) took place in 1994. In 1996, BEL achieved Rs.1,000 crores turnover.
In 1997, GE BEL, the second Joint Venture Company with M/s GE, USA, was formed as also the third JVC with M/s Multitone, UK, BEL Multitone. The same year, USA imposed supply restrictions on BEL.
In 1998, BEL set up its second overseas office at Singapore to source components from South East Asia. The same year, US and European sanctions were imposed on BEL. The Company was able to overcome the effects of the sanctions and insulate Indian defence forces from the fall‐out of denial regimes by finding technical solutions to circumvent the denials and by keeping up the promised deliveries to customers.
The year 2000 saw the Bangalore Unit, which had grown very large, being reorganized into six Strategic Business Units (SBUs). The R&D groups in Bangalore were also restructured into Specific Core Groups and Product Development Groups. The same year, BEL shares were listed in the National Stock Exchange.
In 2002, BEL became the first defence PSU to get operational Mini Ratna Category I status. In 2003, the Company's turnover crossed the Rs.2,500 mark. And in 2005, BEL achieved a turnover of Rs.3223.6 crores.
BEL achieved a turnover of Rs. 3,561 crores (provisional) in 2005‐06. Following this BEL, in 2007 was conferred with prestigious Navratna status based on its consistent performance.
BEL Products:
BEL designs, develops and manufactures products in the fields of:
• Electronic Voting Machines • Radars‐ BEL Weapon Locating Radar • Defence Communications and Telecommunications • Sound and Vision Broadcasting and Opto‐electronics • Solar systems • Semiconductor • Sonar and Naval systems • CCS and FCS • Radar
Research & Development
Research & Development started in 1963 at BEL and has been contributing steadily to the growth of BEL’s business and self-reliance in the field of Defence Electronics and other chosen areas of professional electronics. BEL’s R&D Policy is to enhance the company’s pre-eminence in Defence Electronics and other chosen fields and products through Research & Development. Major R&D objectives of BEL is development of new products and enabling technology modules to meet customer requirements ensuring that the developed products are commercially viable, state-of-the-art, competitive and of highest quality of design.
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Comparison of company’s Status
Before 1990‐91,indian economy being a closed economy had little provision to import or expots good. Even if goods were imported taxes upto 300% was imposed. Fisseablitiy of foreign good to have market in India was practcally impossible. BEL being a PSU has no restriction to make their own goods and expand their market in the country but it did not make anything for the public use then. Mainly its product was made for defence and other government organisation. So the company did not make much of profit. Moreover as the technology we had were a bit less advanced than that of the other developed country, the product produced were not very realible. Labour were a bit less productive As balance sheet of the company states where the company stands in the particular year, we with the help of this balance sheet would like to show how the company has growth in the past 18 years. We would like to highlight the company status in the year 2003‐04, when the Indian econaomy was at boom.
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Due to the major change in the economic policy in the year 1990‐91, many changes took place in term of productivity (method of the production), market and the most important the technology. The first thing that comes into the mind seeing the balance sheet comes is the profit. The profit rouse to 484.3 crore in year 2003‐04 from 34.1 crore in 1990‐91. This comes out to be almost 34% per annum which is commendable. Second thing is the company’s asset which rouse to 1368 crore from 475 crore in 1990‐91. Second thing is the company’s asset which rouse to 1368 crore from 475 crore in 1990‐91. This tremendous increase in the asset and profit is due to the adoption of new technology and foreign market.
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The year 2004‐05 was a boom period for the Indian economy. This was the period when the company showed the maximum growth. The next five years other showed the moderate growth rate in but BEL encountered a tremendous growth. The company’s asset grew from 1368 crore in 2003‐04 to 3234 crore in 2008. This is approximately two and a half fold in just a period for four years. The profit grew to 1171.8 crore in 2008 from 484.3 in 2003‐04. The BEL produces new products in collaboration with DRDO, Defence Research Development Organization and ISRO, Indian Research Development Organization for defence and space technology. Moreover they produce various products for radio communication for Ministry of Information and Broadcasting, government of India Enterprise. The company is the backbone for the government but recently the government sold its 49% percentage of the stack. Still government is the owner of the company keeping the company’s 51% of the stack.
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Hindustan Computers Limited13
Historical background and Milestones
HCL was founded in 1976 and focused on addressing the IT hardware market in India for the first two decades of its existence with some sporadic activity in the global market. In 1981, HCL seeded a company focused on addressing the computer training industry, NIIT, though it has currently divested its stake in the company. In 1991, HP took minority stake in the company (26%) and the company was known as HCL HP for the five years of the joint venture. On termination of the joint venture in 1996, HCL became an enterprise which comprises HCL Technologies (to address the global IT services market) and HCL Infosystems (to address the Indian and APAC IT hardware market). HCL has since then operated as a holding company.
At earlier stages, HCL focused on addressing the IT hardware market in India for the first two decades of its existence with some sporadic activity in the global market. The focus of the company was design and manufacturing of scientific calculators. The venture provided its founders money to start a company that focused on manufacturing computers. The company was renamed as Hindustan Computers Limited (HCL) and received support from the Uttar Pradesh government to setup their manufacturing in Noida. The founders put together Rs 2 million in the venture. In 1981, NIIT was started to cater to the increasing demand in computer education. By early 2000s, Nadar divested his stake in this venture.
Hindustan Computers Limited, also known as HCL Enterprise, is one of India's largest electronics, computing and information Technology Company. Based in Noida, near Delhi, the company comprises two publicly listed Indian companies, HCL Technologies and HCL Infosystems.
Corporate Profile:
HCL started up with addressing the IT hardware market and now it has its two branch.HCL Technologies (to address the global IT services market) and HCL Infosystems (to address the Indian and APAC IT hardware market).
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Government policy shaped HCL, as was the case with all Indian companies of those eras. In 1977, due to the policies of Indian industries minister George Fernandes, global giants like IBM left India creating a major void in the computers industry (even Coca‐Cola left India during this timeframe as it opposed those policies). HCL designed and shipped microcomputers to address this gap (around the same time Apple Inc. introduced personal computers in USA). HCL had many more accomplishments in the next half decade like introducing 16 bit processor computer in 1981 and relational data based management system, networking operating system and client server architecture solutions by 1983. In the last days of Indira Gandhi government, a radical policy shift changed the landscape of the computer industry by permitting the import of technology. HCL utilized the opportunity to launch its first brand of personal computers ‐ Busybee. By 1986, HCL became the largest IT Company in India. When Manmohan Singh opened the Indian economy in 1991 as the Finance minister, HCL entered into a partnership with HP to form HCL HP Limited. HP picked up 26% stake in the company to leverage on HCL's sales and distribution channels to sell its products in India as well as utilize the R&D team of HCL to customize its products to the Indian environment. In 1994, HCL HP looked beyond PCs and tied up with Nokia for mobile phone distribution and Ericsson for telephone switch distribution.
HCL Technologies
HCL Technologies is India’s fourth largest Indian IT Services companies, providing software‐led IT solutions, remote infrastructure management services and BPO. Having made a foray into the global IT landscape in 1999 after its IPO, HCL Technologies focuses on Transformational Outsourcing, working with clients in areas that impact and re‐define the core of their business. The company leverages an extensive global offshore infrastructure and its global network of offices in 16 countries to deliver solutions across select verticals including Financial Services, Retail & Consumer, Life Sciences Aerospace, Automotive, Semiconductors, Telecom and MPE (Media Publishing & Entertainment). For the quarter ending 31 December 2007, HCL Technologies, along with its subsidiaries had revenue (TTM) of US $ 1.6 billion and employed more than 47,000 professionals.
HCL Infosystems Ltd
HCL Infosystems Ltd., a listed subsidiary of HCL, is an India‐based hardware and systems integrator. It claims a presence in 170 locations and 300 service centres. Its manufacturing facilities are based in Chennai, Pondicherry and Uttarakhand .Its headquarters is in Noida.
HCL Peripherals (a unit of HCL Infosystems Ltd.), founded in the year 1983, has established itself as a leading manufacturer of computer peripherals in India, encompassing Display Products, Thin Client solutions, Information and Interactive Kiosks and a wide range of Networking products & Solutions. HCL Peripherals has two Manufacturing facilities, one in Pondicherry(Electronics) and the other in Chennai(Mechanical).The company has been accredited with ISO 9001:2000, ISO 14001, TS 16949 and ISO 13485.
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India has the potential to capture more than 50% of this opportunity and generate export revenues of approximately $60 billion by growing at 25% year‐on‐year till 2010," believes Noshir Kaka, partner, McKinsey & Co. The Indian firms have significant presence in the local market, argues HCL chief strategy officer. Its India arm, HCL Infosystems, TCS subsidiary CMC and Tata Infotech are competing with HP and IBM in the domestic market. They says, We have bagged more total outsourcing contracts similar to the HDFC deal. Balance sheet of the company is compared for year 2003‐04 with that of 2008. Whereas the Indian economy was at boom in the year 2004, its performance has been decreasing in the years that follows.
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Looking to the balance sheet we find that the company’s profit had increased from 121 crore in 2004 to 1101 crore in 2008. Software and outsourcing major HCL Technologies reported 49.1 percent growth in its net profit for the quarter ended Dec 31 at Rs.3.98 billion (Rs.398 crore/$80.7 million) as against Rs.2.67 billion a year ago. The company’s net profit for the half-year period ended Dec 31 was up 22.7 percent at RS.65.18 billion as against Rs.53.11 billion in the corresponding period last year.
The company’s total income during the October-December period rose to Rs.13.05 billion from Rs.11.3 billion a year ago.
“The last quarter has been significant for us. First, HCL has inked contracts worth $1 billion in the last quarter, the biggest in its history. We have successfully integrated Axon as part of HCL,” company chief executive Vineet Nayar said.
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ARRAY TECHNOLOGIES INCORPORATED13
History
In 1985, ATI was founded as Array Technologies Incorporated by Kwok Yuen Ho, Benny Lau and Lee Ka Lau. Working primarily in the OEM (Original Equipment Manufacturer) field, ATI produced integrated graphics cards for PC manufacturers such as IBM and Commodore. By 1987, ATI had grown into an independent graphics card retailer, introducing EGA Wonder and VGA Wonder graphic card product lines under its brand that year. In May 1991, the company released the Mach8, ATI's first product able to process graphics without the CPU. Debuting in 1992, the Mach32 offered improved memory bandwidth and GUI (Graphical User Interface) acceleration performance. In 1994, the Mach64 accelerator debuted, powering the Graphics Xpression and Graphics Pro Turbo, offering hardware support.
ATI Technologies Inc. (ATI) was a major designer and supplier of graphics processing units and motherboard chipsets. In 2006, the company was acquired by Advanced Micro Devices (AMD) and was renamed the AMD Graphics Product Group or ATI Technologies ULC, although the ATI brand was retained for graphics cards. The AMD Graphics Product Group is a fabless semiconductor company conducting in-house research and development and outsourcing the manufacturing and assembly of its products.
Corporate profile:
ATI produces integrated graphics cards for PC manufacturers. It produces following products
• Multimedia and Digital TV products • Personal computer platforms and chipsets • Console graphics products • Handheld chipsets • ATI graphics drivers • Computer graphics chipsets
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Products
In addition to developing high‐end GPUs (Graphics Processing Unit) for PCs, ATI also designs embedded versions for laptops (Mobility Radeon), PDAs (Personal Digital Assistant) and mobile phones (Imageon), integrated motherboards (Radeon IGP), and others.
Some of the products are as follows :
• Multimedia and Digital TV products • Personal computer platforms and chipsets • Console graphics products • Handheld chipsets • ATI graphics drivers • Computer graphics chipsets
ATI’s Professional Series products and solutions provide real benefits:
• Lower support costs/Workplace consolidation • Longevity/Future‐Proofing Stability • Stability and Availability
These advantages contribute directly to reduced total cost of ownership for organizations deploying client PCs and notebooks with ATI Professional Series chipsets and ATI graphics.
ATI components, graphics and software have the pedigree to supply the demands of the enterprise because ATI is also a major supplier of custom computing and graphics solutions for industrial applications. Many of these embedded solutions require mission‐critical functionality in extreme environments.
In the third quarter of 2008, AMD had revenue from continuing operations of $1.797 billion, including process technology license revenue of $191 million, a net loss of $127 million, income from continuing operations of $23 million and operating income of $122 million. In the fourth quarter of 2007, AMD had revenue from continuing operations of $1.737 billion, a net loss of $1.772 billion, a loss from continuing operations of $1.298 billion and an operating loss of $1.187 billion.
Fourth quarter 2008 gross margin was 23 percent, including a negative impact of 20 percentage points due to a $227 million incremental write down of inventory due to weak market conditions. Third quarter 2008 gross margin was 51 percent, 45 percent excluding process technology license revenue. In light of the current macroeconomic conditions, very limited visibility and continued corrections in the supply chain, AMD expects first quarter 2009 revenue to decrease from the fourth quarter 2008.
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PROJECT ECONOMIC INSIGHT TO ELECTRONIC
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INTEL CORPORATION13
It is the world’s largest semiconductor chip maker, based on revenue. They develop advanced integrated digital technology products, primarily integrated circuits, for industries such as computing and communications. Integrated circuits are semiconductor chips etched with interconnected electronic switches. They also develop platforms, which we define as integrated suites of digital computing technologies that are designed and configured to work together to provide an optimized user computing solution compared to components that are used separately. They are the preeminent provider of semiconductor chips and platforms for the worldwide digital economy.
Intel Corporation is the world's largest semiconductor company and the inventor of the x86 series of microprocessors, the processors found in most personal computers. Intel was founded on July 18, 1968 as Integrated Electronics Corporation and based in Santa Clara, California, USA. Intel also makes motherboard chipsets, network cards and ICs, flash memory, graphic chips, embedded processors, and other devices related to communications and computing. Founded by semiconductor pioneers Robert Noyce and Gordon Moore, and widely associated with the executive leadership and vision of Andrew Grove,
The 2007 rankings of the world's 100 most powerful brands published by Millward Brown Optimor showed the company's brand value to number 25.
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MAJOR PRODUCTS :
They strive to design and manufacture computing and communications components and platforms with improved overall performance and/or improved energy efficiency. Improved overall performance include faster processing performance and other improved capabilities, such as multithreading and multitasking. Improved energy‐efficient performance is achieved by balancing performance factors with lower power consumption. They offer products at various levels of integration, to allow our customers flexibility in creating computing and communications systems
1. Components: A) Microprocessors: During 2008, they also introduced the Intel® Atom™ processor family.
These low‐power processors are specifically designed for embedded solutions, MIDs, consumer electronics, and two new classes of simple and affordable Internet‐focused computers called netbooks and nettops.
B) Chipsets C) Motherboards D) Wired and Wireless Connectivity: They have also developed wireless connectivity products
for both mobile and fixed networks based on WiMAX, a standards‐based wireless technology providing high‐speed broadband connectivity, which links users and networks up to several miles apart.
2. Platforms
3. Microprocessor and Platform Technologies
4. Additional Product Offerings
A) NAND flash memory
B) Communications infrastructure products
C) Network and server storage products
D) Software products
STATISTICAL ANALYSIS OF COMPANY’S STATUS:
The following table sets forth information on our geographic regions for the periods indicated:
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Intel’s net revenue for 2003 was $30.1 billion, an increase of 13% compared to 2002.Their Asia‐Pacific region’s revenue made up the largest portion of our total revenue and increased 21% in 2003 compared to 2002,reflecting growth in local consumption and Asia’s continued growth as a global manufacturing and design center. Revenue in Europe improved, increasing 12% in 2003 compared to 2002. Japan experienced substantial improvement with increased revenue of 42%. Revenue from the Americas region continued to decrease as a percent of our total revenue and declined 3% in 2003 compared to 2002. In 2003, they continued to experience growth in emerging markets in Asia and Europe, and began to see some evidence of higher technology infrastructure spending in mature markets in Europe and the U.S. Their overall gross margin percentage increased to 56.7% for 2003 from 49.8% in 2002. Their financial condition remains strong. At December 27, 2003, cash, short‐term investments and fixed income instruments included in trading assets totaled $15.9 billion, up from $12.2 billion at December 28, 2002. At December 27, 2003, total short‐termand long‐term debt was $1.2 billion and represented 3% of stockholders’ equity. At December 28, 2002, total debt was $1.4 billion and represented 4% of stockholders’ equity.
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Now if we look at the financial status of the company after the period of five years, so as we can ascertain the impact of recession. Intel has a major loss due to the recession.
Their net revenue was $37.6 billion in 2008, a decrease of 2% compared to 2007. Higher revenue from the sale of microprocessors and chipsets was more than offset by the impacts of divestitures and lower revenue from the sale of motherboards. Revenue from the sale of NOR flash memory and cellular baseband products declined approximately $1.7 billion, primarily as a result of divestiture of these businesses. Revenue in the Americas region decreased 4% in 2008 compared to 2007. Revenue in the Asia‐Pacific, Europe, and Japan regions remained approximately flat in 2008 compared to 2007. Although net revenue for 2008 declined only slightly from 2007, net revenue for the fourth quarter of 2008 declined 19% from the third quarter as customers reduced inventory levels to keep pace with the dramatic decline in end‐user demand that occurred over the course of the quarter. It is unclear when a turnaround may occur, and there remains a high degree of uncertainty around demand, which may continue to decline.
The current uncertainty in global economic conditions makes it particularly difficult to predict product demanded other related matters, and makes it more likely that our actual results could differ materially from our expectations. In addition to the various important factors discussed above, a number of other important factors could cause actual results to differ materially from our expectations.
Their expectations for 2009 are as follows:
•Total Spending: Expected spending on R&D, plus marketing, general and administrative expenses, in 2009 to be between $10.4 billion and $10.6 billion. This expectation for our total spending in 2009 is lower than our 2008 spending by approximately 6% due to targeted spending reductions, lower spending for revenue and profit‐dependent items, and the standard shift between R&D and cost of sales spending as we ramp our new 32nm process technology.
•Capital Spending: They expect capital spending in 2009 to be flat to slightly down from capital spending in 2008 of $5.2 billion. They expect capital spending for 2009 to primarily consist of investments in 32nm process technology.
•Depreciation: Approximately $4.8 billion, plus or minus $100 million.
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VIDEOCON INDUSTRIES LIMITED13
Consumer electronics: In India the group sells consumer products like Colour Televisions, Washing Machines, Air Conditioners, Refrigerators, Microwave ovens and many other home appliances, selling them through a Multi‐Brand strategy with the largest sales and service network in India. Videocon Group brands include Sansui, Toshiba, Electrolux, Kenstar, Next etc.
Colour picture tube glass: Videocon is one of the largest CPT Glass manufacturers in the world, operating in Mexico, Italy, Poland and China.
Videocon is an industrial conglomerate with interests all over the world and based in India. The group has 17 manufacturing sites in India and plants in China, Poland, Italy and Mexico. It is also the third largest picture tube manufacturer in the world.
Corporate profile
The Videocon group has an annual turnover of US$ 4.1 billion, making it one of the largest consumer electronic and home appliance companies in India. Since 1998, it has expanded its operations globally, especially in the Middle East
Today the group operates through three key sectors:
1) Consumer electronics
2) Colour picture tube glass
3) Oil and Gas
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Oil and Gas: An important asset for the group is its Ravva oil field with one of the lowest operating costs in the world producing 50,000 barrels of oil per day.
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ANALYSIS REPORT FOR THE YEAR 2002‐2003:
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There has been steady growth in the financial and operational performance of the Company during the year under review. The Sales and other income for the financial year under review, were Rs.33,627 Million as against Rs.46,574 Million for the previous financial period. The Profit before tax (after interest and depreciation charges) was Rs.5,721 Million and Profit after tax of Rs.1,049 Million for the financial year under review as against Rs.7,101 Million and Rs. 1,708 Million respectively for the previous financial period of 18 months
The year 2004 started on an encouraging note for the Indian electronic Industry. The
Government reduced the customs duty on raw materials and inputs used for manufacturing electronic components to nil for most items, while duty on capital goods for manufacturing electronics hardware reduced to nil. The special additional customs duty of four percent got abolished. The peak rate of customs duty reduced which means, lower production cost for electronics manufactures, and competition ensured lower prices to consumers. The increase in disposable incomes and increase in penetration level primarily drived this market size. The largest increase in the segment was coming from the first time buyers.
For 2008 :
The Largest segment in the Electronics Industry is Consumer Electronics Segment. The Consumer
Electronics segment is growing at a fast pace.
The Consumer Electronics Industry continued its growth path during the year. The Consumer Electronics and Home Appliances segment in India is estimated to have achieved levels of around Rs 230 Billions in 2007‐2008. For the period 2008‐2009 it is expected to achieve levels of Rs.260 Billion.
The Consumer Electronics Industry has been witnessing a remarkable growth over the past few years. The fast growing segments during the year were Colour Televisions, Air Conditioners, DVD Players and Home Theater Systems. The Other segments of Consumer Electronics and Home Appliances have also shown positive growth.
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Profit for the year of the Company decreased to Rs. 8,542.95 million from Rs. 8,552.19 million for the previous year ended September 30, 2007 representing decrease of 0.11% in Net profit.
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NOKIA CORPORATION13
As of December 2008, Nokia had R&D presence in 16 countries and employed 39,350 people in research and development, representing approximately 31% of the group's total workforce. The Nokia Research Center, founded in 1986, is Nokia's industrial research unit, consisting of about 500 researchers, engineers and scientists. It has sites in seven countries: Finland, China, India, Kenya, Switzerland, the United Kingdom and the United States. Besides its research centers, in 2001 Nokia founded (and owns) INdT – Nokia Institute of Technology, a R&D institute located in Brazil.
Nokia Corporation is a Finnish multinational communications corporation, headquartered in Keilaniemi, Espoo, a city neighbouring Finland's capital Helsinki. Nokia is focused on wireless and wired telecommunications, with 128,445 employees in 120 countries, sales in more than 150 countries and global annual revenue of EUR 50.7 billion and operating
profit of 5.0 billion as of 2008.
It is the world's largest manufacturer of mobile telephones: its global device market share was about 37% in Q1 2009. Nokia's subsidiary Nokia Siemens Networks produces telecommunications network equipment, solutions and services. Navteq is part of Nokia's strategy of focusing on mobile navigation
Nokia has sites for research and development, manufacture and sales in many countries throughout the world.
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HISTORY:‐
Pre‐telecommunications era
The predecessors of the modern Nokia were Nokia Company ,Finnish Rubber Works Ltd and Finnish Cable Works Ltd .
Nokia's history starts in 1865 when engineer Fredrik Idestam established a groundwood pulp mill on the banks of the Tammerkoski rapids in the town of Tampere, in southwestern Finland, and started manufacturing paper.In 1868, Idestam built a second mill near the town of Nokia, fifteen kilometres (nine miles) west of Tampere by the Nokianvirta river, which had better resources for hydropower production. In 1871, Idestam, with the help of his close friend statesman Leo Mechelin, renamed and transformed his firm into a share company, thereby founding the Nokia Company, the name it is still known by today.
The name of the town, Nokia, originated from the river which flowed through the town.The three companies, which had been jointly owned since 1922, were merged to form a new industrial conglomerate, Nokia Corporation in 1967 and paved the way for Nokia's future as a global corporation.The new company was involved in many sectors, producing at one time or another paper products, bicycle and car tires, footwear (including Wellington boots), personal computers, communications cables, televisions, electricity generation machinery, capacitors and aluminium. Each business unit had its own director who reported to the first Nokia Corporation President, Björn Westerlund. As the president of Finnish Cable Works, he had been responsible for setting up the company’s first electronics department in 1960, sowing the seeds of Nokia’s future in telecommunications.
Eventually, the company decided to leave consumer electronics behind in the 1990s and focused solely on telecommunications. Nokian Tyres, manufacturer of tires split from Nokia Corporation to form its own company in 1988 and two years later Nokian Footwear, manufacturer of rubber boots, was founded. During the rest of the 1990s, Nokia divested itself of all of its non‐telecommunications businesses.
Telecommunications era
The seeds of the current incarnation of Nokia were planted with the founding of the electronics section of the cable division in 1960 and the production of its first electronic device in 1962: a pulse analyzer designed for use in nuclear power plants. In the 1967 fusion, that section was separated into its own division, and began manufacturing telecommunications equipment.
Networking equipment
In the 1970s, Nokia became more involved in the telecommunications industry by developing the Nokia DX200, a digital switch for telephone exchanges. In 1982, a DX200 switch became the world's first digital telephone switch to be put into operational use. The DX200 became the workhorse of the network equipment division. Its modular and flexible architecture enabled it to be developed into various switching products.
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First mobile phones
The technologies that preceded modern cellular mobile telephony systems were the various "0G" pre‐cellular mobile radio telephony standards. Nokia had been producing commercial and military mobile radio communications technology since the 1960s. Since 1964, Nokia had developed VHF‐radio simultaneously with Salora Oy. In 1966, Nokia and Salora started developing the ARP standard (which stands for Autoradiopuhelin, or "car radio phone"), a car‐based mobile radio telephony system and the first commercially operated public mobile phone network in Finland.
It went online in 1971 and offered 100% coverage in 1978.In 1979, the merger of these two companies resulted in the establishment of Mobira Oy. Mobira began developing mobile phones for the NMT (Nordic Mobile Telephony) network standard, the first‐generation, first fully‐automatic cellular phone system that went online in 1981. In 1982, Mobira introduced its first car phone, the Mobira Senator for NMT‐450 networks.
Personal computers
In the 1980s, Nokia's computer division Nokia Data produced a series of personal computers called MikroMikko. MikroMikko was Nokia Data's attempt to enter the business computer market. The first model in the line, MikroMikko 1, was released on September 29, 1981around the same time as the first IBM PC. However, the personal computer division was sold to the British ICL (International Computers Limited) in 1991, which later became part of Fujitsu. MikroMikko remained a trademark of ICL and later Fujitsu. Internationally the MikroMikko line was marketed by Fujitsu as the ErgoPro.
Recent history
In April 2003, the troubles of the networks equipment division caused the corporation to resort to similar streamlining practices on that side, including layoffs and organizational restructuring. This diminished Nokia's public image in Finland, and produced a number of court cases and an episode of a documentary television show critical of Nokia. On November 16, 2005, Nokia and Intellisync Corporation, a provider of data and PIM synchronization software, signed a definitive agreement for Nokia to acquire Intellisync and development, to continue CDMA business in selected markets.
On August 8, 2006, Nokia and Loudeye Corp. announced that they have signed an agreement for Nokia to acquire online music distributor Loudeye Corporation for approximately US $60 million. The company has been developing this into an online music service in the hope of using it to generate handset sales. The service is expected to launch in late 2007 and would rival iTunes. Nokia completed the acquisition on October 16, 2006. In May 2007, Nokia announced that its Nokia 1100 handset, with over 200 million units shipped, is the best‐selling mobile phone of all time and the world's top‐selling consumer electronics product.
In November 2008, Nokia announced ceasing mobile phone distribution in Japan. Following early December, distribution of Nokia E71 is cancelled, both from NTT docomo and SoftBank Mobile. Nokia Japan remains tasks of global research & development programs, sourcing business, and an MVNO venture of Vertu luxury phones, using docomo's telecommunication network.
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Environmental record:
Electronic products such as cell phones impact the environment both during production and after their useful life when they are discarded and turned into electronic waste. According to environmental organization Greenpeace, Nokia has a good track record in limiting the amount of toxic chemicals in its products, supporting recycling, and reducing impact on climate change, compared to other large electronics brands. In the 11th Greenpeace Guide to Greener Electronics, Nokia stays in first place with an improved total score of 7.5/10.
In an effort to further reduce their environmental impact, Nokia released a new phone concept, Remade, in February 2008. The phone has been constructed of solely recyclable materials.The outer part of the phone is made from recycled materials such as aluminum cans, plastic bottles, and used car tires.The screen is constructed of recycled glass, and the hinges have been created from rubber tires. The interior of the phone is entirely constructed with refurbished phone parts, and there is a feature that encourages energy saving habits by reducing the backlight to the ideal level, which then allows the battery to last longer without frequent charges.
Research and development programmes
The foundations of Finnish technology programmes were laid in the early 1980s when a major reform of technology policy lead to the founding in 1983 of the Technology Development Centre (Tekes, renamed the National Technology Agency in 1999). The mission of Tekes is to promote technological expertise and industrial competitiveness and, by doing so, to contribute to economic progress and social well‐being. Towards this end, Tekes provides funds for applied technical research and guarantees loans for industrial RTD. Ever since its foundation, technology programmes have been one of Tekes’ key instruments. In the earliest programmes, e.g. the Semiconductor Technology Programme 1982‐1986, Finnish universities and research institutes conducted medium and long‐term research on topics that were regarded as particularly important for future industrial competitiveness. In 1988, for example, there were 16 ongoing national technology programmes; the duration of these programmes varied from three to six years and their total funding volume ranged from FIM 10 million to FIM 115 million with an average of FIM 39 million39.Companies also participated in the joint RTD work, but their role was often limited to the setting of programme goals and participation in the steering group work. In the early 1990s40, the systemic approach – which is based on a comprehensive understanding of the national innovation system – was selected as the basis for national technology policy. Currently, joint research ventures between companies, close collaboration between industry and research institutes and extensive participation of SMEs are central characteristics of Finnish technology programmes. In 1996, the Government took the decision to increase public RTD appropriations, whereby industry was encouraged to match this investment, so that by 1999 2.9% of GNP would be spent on RTD. Thanks to the rapid growth of the telecommunications sector, the total RTDexpenditure had already exceeded 3.0% of GNPin 1998.
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PRODUCTS
• Mobile phones
• Smartphones
• Multimedia computers • Networks • Digital television • ADSL modems • WLAN products • Telephone switches • GPS products • TETRA • Internet tablets • Security solutions • Software solutions • Military communications
Nokia has one class of shares. Each Nokia share entitles the holder to one vote at general meetings of Nokia. In 2008, Nokia issued 3 546 508 new shares upon exercise of stock options issued to personnel in 2003 and 2005. Effective March 27, 2008, a total of 185 409 913 shares held by the company were cancelled.
The issuance of new shares and cancellation of shares did not have an effect on the amount of share capital of the company. Neither the issuance nor the cancellation of shares had any significant effect on The relative holdings of the other shareholders of the company nor on their voting power. Nokia repurchased through its share repurchase plan a total of 157.4 million shares on NASDAQ OMX Helsinki at an aggregate price of approximately EUR 3 123 million during the period from January 25, 2008to August 7, 2008. The price paid is based on the market price at the time of repurchase. The shares were repurchased to be used for the purposes specified in the authorizations given by the Annual General Meetings of 2007 and 2008 to the Board.
The aggregate amount of shares repurchased in 2008 represented approximately 4.1% of the total number of shares of the company and the total voting rights at the end of 2008. These new holdings did not have any significant effect on the relative holdings of the other shareholders of the company nor on their voting power. In 2008, Nokia transferred a total of 4.2 million Nokia shares held by it under the Performance Share Plans and 1.4 million shares held by it under its Restricted Share Plans as settlement under the plans to the Plan participants, personnel of Nokia Group. The amount of shares transferred represented approximately 0.1% of the total number of shares of the company and the total voting rights. The transfers did not have a significant effect on the relative holdings of the other shareholders of the company nor on their voting power.
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SAMSUNG ELECTRONICS13
A synopsis of the humble beginnings and highlight’s of the Samsung illustrious history is given below:
• 1938: Lee Byung‐Chull founded his small business as 'Samsung Store' at Daegu • 1950: Lee Byung‐Chull founded Samsung trading company in Seoul (YPM) • 1953: Samsung starts sugar production, which has since been spun off into the CJ Corporation • 1954: Cheil Industries founded • 1958: Samsung starts insurance business • 1963: The first Shinsegae department store opens in Seoul • 1964: Samsung starts Tongyang Broadcasting Company (TBC), which later merged with KBS • 1965: Samsung starts the Joong‐Ang Ilbo daily newspaper, which is no longer affiliated with the
company • 1969: Samsung Electronics was founded • 1974: Samsung Petrochemical and Heavy Industries were founded.
Samsung Group is the world’s largest conglomerate of companies in terms of business revenues .It’s business interests lie in the three main sectors –Shipbuilding, Electronics and Construction,thereby reflecting the meaning of its name SAMSUNG meaning “TRISTAR” in Korean
Corporate profile
The Electronics venture of Samsung Samsung Electronics was founded in 1969 in Suwon, South Korea as Samsung Electric Industries originally manufacturing electronic appliances such as TVs, calculators, refrigerators, air conditioners and washers. By 1981, the company had manufactured over 10 million black and white TVs. In 1988, it merged with Samsung Semiconductor & Communications.
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• 1976: The company was awarded an export prize by the government as a part of the country's
development program. • 1977: As a result of this export prize, Samsung Construction emerged. In addition, Samsung
Shipbuilding is formed. • 1982: Samsung establishes a professional baseball team. • 1983: Samsung produces its first computer chip: a 64k DRAM chip.
Recent Developments:
Samsung is a top rated electronic & IT brand in various reports. In 2006, Business Week rated Samsung as 20th on the Top 100 global brands and the Number 2 in the electronics industry.[4] Business Week also ranked Samsung as #20 in a ranking of the "Top 100 Most Innovative Companies" in a special report published April 24, 2006. In January 2007, BrandFinance ranked the company as the Number 1 global brand in electronics.
The semiconductor division of Samsung Electronics is the world's largest memory chip and second largest semiconductor manufacturer worldwide. In particular this has been the case for DRAM and SRAM for over a decade. Samsung, the world's largest LCD manufacturer, plans to begin running its eighth‐generation manufacturing line to make 57‐inch panels during the second half of the year.
In 2007, Samsung became the world's second largest mobile phone manufacturer, surpassing Motorola, just behind Nokia.
KEY AREAS OF INTEREST:
Samsung Electronics focuses on four areas: Digital Media, Semiconductor, Telecommunication Network, and LCD Digital Appliance. [10] The main growing business areas related to LCD+Digital Media+Semiconductor at 2006. As of 2009 Samsung Print was established as a separate entity to focus on B2B sales and has released a broad range of Multi‐Functional Devices and printers. As with all major Print equipment manufacturers Samsung have developed and released supporting management software and utilities. The main Print‐Management software has been released as Syncthru WebAdmin Service.
• The Digital Media business area covers computer devices such as laptop computers and laser printers; video displays such as televisions and computer monitors; and consumer entertainment devices such as DVD players, MP3 players, digital camcorders, refrigerators, air conditioners, air purifiers, washers, microwave ovens, and vacuum cleaners.
• The Semiconductor business area includes semiconductor chips such as SDRAM, SRAM, NAND flash memory; smart cards; Mobile Application Processors; Mobile TV receivers; RF Transceivers; CMOS Image Sensors, Smart Card IC, MP3 IC, DVD/BD/HD‐DVD Player SOC and multi‐chip package (MCP); and storage devices such as optical disc drives and hard disk drives.
• The Telecommunication Network business area includes multi‐service DSLAMs and fax machines; cellular devices such as mobile phones, PDA phones, and hybrid devices called Mobile Intelligent Terminals (MITs); and satellite receivers.
• The LCD business area focuses on TFT‐LCD panels for laptops, monitors, and televisions.
As of 3Q 2008 Samsung Electronics has combined the Digital Appliance business with Digital Media.
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The recent audit and press release of final assessment
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Financial position has changed quite a bit in previous few quarters as can be judged from the data given above . it has increased from about 4.4 % in last quarter i.e from fourth quarter in 20008 to first quater in 2009. But, cash flow has decreased from about 6.65 to 5.7 in last quarter.
The sales and the operating profit has decreased as is expected due to recession in economy. Sales has decreased by about 1 5 % in the last quarter which is quite large.
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INTEGRATED DEVICE TECHNOLOGY13
Headquarters Greater New York City Area
Industry Telecommunications
Type Public Company
Status Operating
Company Size 2,400 employees
2007 Revenue
$2,013 mil
Founded 1990
Website http://www.idt.net
History
• Historically IDT manufactured MIPS processors developed by QED (Quantum Effect Devices) and also for a while its own x86 processor designed by its Centaur Technology subsidiary called the IDT WinChip. On September, 1999 IDT sold Centaur Technology x86 microprocessor design subsidiary to VIA Technologies.
• On April, 1999 IDT acquired Quality Semiconductor (QSI) a supplier of clock management and bus switch logic.
• On May, 2004, IDT acquired ZettaCom, Inc.
• On Jun, 2005 IDT acquired Integrated Circuit Systems (ICS) for about $1.5 billion in cash and stock.
• On October, 2005 IDT acquired Freescale Semiconductor's timing solutions business for $35 million.
• In July, 2006 IDT acquired the PC Audio division of Austin‐based company SigmaTel for $80 million.
• One current speciality of the company are devices for network processing, in particular packet (information technology) inspection products for firewalls (networking). In October 2002 IDT acquired Solidum Systems, a maker of network search element devices.
• Another high‐profile product is IDT's implementation of the Advanced Memory Buffer (AMB), an integral part of the Fully Buffered DIMM memory architecture.
• Company shares are publicly traded under the Nasdaq symbol IDTI and value the company at approximately 1 billion dollars at the beginning of 2005.
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Products IDT provides the industry’s broadest and most comprehensive family of PCI Express switching solutions. Through extensive collaboration with leading customers, IDT offers solutions optimized to maximize performance per watt for the most demanding server, storage, communications, embedded and consumer applications. With switching solutions optimized for System Interconnect and I/O Expansion, IDT is the right choice.
IDT System Interconnect Solutions :
Provides deterministic, non‐blocking, line rate performance and advanced support for inter‐processor communications and peripheral sharing in bladed and large‐scale embedded applications.
• Delivers high performance and scalability • Enables flexible system scaling and optimal resource utilization • Ensures high RAS and security
The table below sets forth the high and low sales prices for the common stock as reported by the New York Stock Exchange for the fiscal periods indicated Fiscal year ended July 31, 2007
High
Low
First Quarter Second Quarter Third Quarter Fourth Quarter
$14.89 $13.79 $13.87 $13.08
$12.34 $12.42 $11.01
$ 9.69 Fiscal year ended July 31, 2008 First Quarter Second Quarter Third Quarter Fourth Quarter
$12.58 $ 9.54 $ 7.07 $ 4.02
$ 7.67 $ 5.94 $ 3.38 $ 1.41
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Selected Financial Data The selected consolidated financial data presented below for the fiscal year ended July 31, 2008 has been derived from the IDT Consolidated Financial Statements.
Fiscal Year Ended July 31, (In thousands, except per share data)
2008 2007
REVENUES:
Prepaid Products Consumer Phone Services Wholesale Telecommunications Services IDT Telecom intersegment revenues IDT Energy IDT Carmel IDT Capital
$ 778,431 $ 971,804 87,963 148,773 262 1,062,573 1,220,633 400,472 575,497 248,890 190,751 45,651 5,434 54,954 50,841
TOTAL REVENUES 1,877,990 2,012,739
COSTS AND EXPENSES: Direct cost of revenue 1,468,784 1,615,047 Selling, general and administrative 445,979 483,483 525Depreciation and amortization 68,747 80,011 Bad debt 45,503 12,943 Research and development 11,567 5,232 Restructuring and impairment charges 66,187 33,404 TOTAL COSTS AND EXPENSES 2,106,767 2,230,120 Arbitration award income 40,000 — (Loss) gain on sale/disposal of businesses 9,569 44,671 Loss from operations 198,346 172,710 Interest income, net 4,766 18,069 Other (expense) income, net 17,309 28,980 Minority interests 1,370 10,180 (Provision for) benefit from income taxes 9,923 3,605 Loss from continuing operations 219,442 139,446 Discontinued operations, net of tax: (Loss) income from discontinued operations — 7,165 (Loss) gain on sale of discontinued operations 4,888 205,235 Total discontinued operations 4,888 198,070 NET (LOSS) INCOME $224,330 $58,624 Earnings per share: Basic and diluted:
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Loss from continuing operations $2.88 $1.70
Net (loss) income $ 2.95 $ 0.71 Weighted-avg no of shares used in calculation of basic & dilute earnings per share 76,171 82,165 Cash dividend declared per common share $ — $ 0.375 Stock-based compensation included in selling general and administrative expense $ 4,407 $ 7,726
As of July 31 (in thousands) 2008 2007 BALANCE SHEET DATA: Cash, cash equivalents, marketable securities And investments $ 343,339 $ 661,037 Working capital 51,450 301,176 Total Assets 1,002,975 1,360,333 Capital lease obligations—long-term portion 11,148 23,401 Notes payable—long term portion 100,150 82,847 Total Stockholders’ Equity 342,337 630,162
It is clearly seen that the there is quite large effect due to recession on this company as shown above. The net cash, cash investments, marketable securities and investments have fallen from $661,037 in 2007 to nearly its half i.e $343,339.also the working capital has increased so much .there also a drastic rise in the value of total assets, capital lease and total stockholders’ equity.
The total revenues of the company Prepaid Products ,Consumer Phone Services, Wholesale Telecommunications Services ,IDT Telecom intersegment revenues ,IDT Energy, IDT Carme, IDT Capital has decreased by about 130,000 in 2008 from its value in 2007.
The total cost and expenses are on the fair side , since it has decreased in 2008 to 2,106,767 . But, the net loss in income has increased by a factor of about 4 from its value in 2007. These effects are primarily due to recession.
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Electronics industry in India: A snapshot
India’s Electronics sector has six key segments: 1. Consumer electronics 2.Industrial electronics 3. Computers 4.Strategic electronics 5. Communication and Broadcasting equipment 6. Electronic components.
The consumer electronics sector dominates the industry with 33.8 per cent share and has benefited from a large and expanding market. The industrial electronics and computer sector each has a share of over 15 per cent. 6
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Consumer Electronics Consumer electronics consists of products that are directly consumed by end‐users, such as televisions, VCD/MP3 players, microwave ovens, etc. This segment has a large manufacturing base, and is quite competitive, with presence of several global players in India. Industrial Electronics The Industrial electronics segment includes products that are used by other industries, such as process control instrumentation, automation systems, Test and measuring (T&M) instruments and medical instruments. Computers This segment includes personal computers, servers, workstations, supercomputers, data processing equipment and peripherals such as monitors, keyboards, disk drives, printers, plotters, digitisers, SMPS, modems, networking products and add‐on cards. Strategic Electronics The strategic electronics segment covers Satellite base communications, navigation and surveillance, underwater electronics and infra red based detection, disaster management and GPS based Vehicle tracking systems. The segment has a number of manufacturing units both in the public and private sectors.
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Communication and Broadcasting Equipment The communication and broadcasting equipment segment includes digital exchanges (EPABX, RAX, TAX and MAX), Transmission equipment such as HF/VHF/Microwave trans‐receivers, satellite communication terminals, optical fiber communication equipment, troposcatter equipment, two‐way radio communication equipment, etc. Electronics Components The electronics components segment caters to the requirements of consumer electronics, telecom, defense and information technology sectors. The components in production in India at present include TV picture tubes (black & white and color), monitor tubes, diodes and transistors, power devices, ICs, hybrid microcircuits, resistors, capacitors (plastic film, electrolytic, tantalum, ceramic), connectors, switches, relays, magnetic heads, DC micro motors and tape deck mechanism, PCBs, crystals, loudspeakers and hard and soft ferrites. The consumer electronic sector in general and the color television (CTV) industry in particular is the growth engine for electronic components. India’s electronics industry has been growing at approximately 11 per cent CAGR over the past 5 years, and was worth US$ 11 billion in 2004‐05.6,9
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Contribution towards GDP:
India is the fifth largest economy in the world has the second largest GDP among emerging economies. Its middle class is 300 million strong and growing. In 2006‐07, the performance of the Information Technology Enabled Services–Business Process Outsourcing (ITES‐BPO) industry was marked by double‐digit revenue growth, steady expansion into newer service lines and increased geographic penetration and an unprecedented rise in investments by multinational corporations (MNCs). Total export revenues of IT‐ITES industry have grown from US$ 23.6 billion in 2005‐06 to US$ 31.3 billion in 2006‐07, a growth of 32.6 per Cent. A total of 90 Indian IT companies were certified at SEI CMM Level 5 by December 2006. Majority of the Fortune 500 and Global 2000 corporations are sourcing IT‐ITES from India. Over the last two‐three years, a number of reputed companies in electronics/IT/telecom hardware manufacturing like Nokia, Motorola, Foxconn, Flextronics, Aspocomp, Samsung, LG, Elcoteq, Ericsson, Alcatel, Tessolve and DELL have either set up their units or are in the process of investing in the country. India is rapidly becoming an R&D hub. All the top 10 global fabless design companies have operations in India and 17 of the top 25 semiconductor companies worldwide have a strong presence in India. The total number of professionals employed in the IT‐ITES sector grew from an estimated 12,87,000 in 2005‐06 to 16,21,000 in 2006‐07. In addition, IT‐ITES is estimated to have helped create an additional 60 lakh job opportunities through indirect and induced employment in telecom, power, construction, facility management, IT transportation, catering and other services.8,6,9.
Growth of production and exports in electronics industry
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Policy developments and new initiatives by Indian government:
The Government has played a supporting role in enabling the industry to realise the potential of the Indian electronics industry. India has made the transition from being a sort of controlled economy to a free market. Foreign investment up to 100 per cent is possible in the Indian electronics industry to set up units exclusively for exports. It is now possible to import duty‐free all components and raw materials, manufacture products and export it. Some of key initiative taken by the government is as:
• EHTP (Electronic Hardware Technology Park) is an initiative to provide benefits to companies
that are replacing certain imports with local manufacturing. EHTP benefits include export credits, no duties on imported components or capital equipment, business tax incentives, and an expedited import‐export process.
• Customs duty on ITA‐1 items (217 items) has been abolished from March 2005. All goods required in the manufacture of ITA‐1 items are exempt from customs duty.
• Customs duty on specified raw materials / inputs used for manufacture of electronic components or optical fibres / cables has been removed.
• Customs duty on specified capital goods used for manufacture of electronic goods has been abolished.
• Excise duty on computers has been removed. Microprocessors, hard disc drives, floppy disc drives and CD ROM drives continue to be exempt from excise duty.
• The Special Incentive Package Scheme (SIPS) to encourage investments for setting up semiconductor fabrication and other micro‐ and nano‐technology manufacturing industries was announced in March 2007. The incentives admissible would be 20 per cent of the capital expenditure during the first 10 years for units located in Special Economic Zones (SEZs) and 25 per cent for units located outside SEZs.
• Recently, government of India took a decision to stop the inflow of Chinese made electronic gadgets such as toys, cell phones etc. as researchers suggests that these low cost goods are very hazardous for health especially for children.7,8,9
Global impact of recession: Consumer demand for electronics, from computer to digital cameras is declining fast
amidst the global economics slowdown. Sales of mobile phone is shrinking at their fastest pace ever as consumer cut spending, a Reuters poll showed, with analysts increasingly concern about unsold phones pilling up in stores. On average, global market volume was shrinking at the rate of 6.6 per cent last year (April‐Dec 08) and 5.7 per cent during last quarter‐traditionally the strongest period for the industry due to holiday sales. Consumer electronics demand has slumped, triggering the loss of 16,000 jobs at Sony and profit warnings from Samsung Electronics and Texas Instruments Inc.
As a result of this slump in consumer electronics sales, chipmakers from giants such as Intel and Samsung Electronics to contract manufacturers such as Taiwan Semiconductors manufacturing all expect weak sales in the coming quarters.4, 8
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The global semiconductor revenue is expected to fall 16.3 per cent in 2009 to $ 219.2 billion
after a 4.4 per cent fall in 2008, due to the economic slowdown.3 Though high‐end luxury items are likely to suffer most ,especially in the consumer electronics space, the exceptions will be so‐called smartphones, including Apple’s iPhone and RIM’s Blackberry products. One noticeable trend here will be increased sales of mini‐note‐book computers, with a lot less processing power. Computer makers are estimated to have sold more than 11 million net‐books worldwide in 2008‐up from just around a million in 2007 and notebook sales could easily double in the New Year.4
According to ABI Research, more than 3.5 crore cellular modems for laptops and netbooks were shipped in 2008, 10 per cent of which were embedded in the computers. The market research firm expects the number of embedded modems to double to 70 lakh units in 2009, fewer than it had previously forecast, it said. Solis said, despite the positive picture for embedded modems, the global recession will inevitably have an impact on the market. "In light of the prevailing economic conditions and the resulting slowdown in laptop shipments, ABI Research has lowered its overall forecasts for the cellular modem market for 2009," Solis said. "However, shipment rates will continue to grow, albeit at a slower place, because this is an under penetrated market and because of subsidies and other incentives offered by mobile operators." Qualcomm and Ericsson have been targeting the embedded modem market directly, positioning their products very competitively against each other, according to ABI. Ericsson has scored some penetration with its embedded Mobile Broadband Module, while Qualcomm has also racked up design wins with its Gobi product line.10, 4.
INDIA, An Exception:
If we go by the words of Sabiha Kidwai, Marketing Manager, Panasonic India, the consumer electronics situation in India appears rather rosy. Kidwai says that the customer electronics industry is growing in India and has a lot more potential. The industry has witnessed significant growth in recent years due to several factors, such as retail boom, growing disposable income and finance schemes. High‐ticket items are selling mainly in metropolitan cities and low‐ticket items in tier‐2 and tier‐3 towns. Innovations are appealing and touching Indian customers through consumer electronics. Blu‐ray and full high‐definition are the new technologies attracting customers.
The consumer electronics industry will most likely grow in India at a rate of 10 per cent overall in value. With new excise duty structure, consumers will have more confidence in consumer electronics items. Products which are selling in India are all those which have low penetration or are nascent in category life‐cycle. Most selling are color TVs and refrigerators but growth is mostly seen in LCD TVs and expensive electronic items. High‐end
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refrigerators, microwave ovens and front‐loading washing machines are growing exponentially.
Recent 2 per cent cut in excise duty as well as 4 per cent cut in Dec‐08, modern retail distribution, 7 per cent GDP growth, and trend towards flat and slim category will be the key reasons behind this growth. Large companies even now are offloading the production to original equipment manufacturers. According to industry estimates, India’s electronic equipment consumption in 2005 was 1.8 per cent. This is likely to grow to 5.5 per cent in 2010. Similarly, India’s semiconductor total available market (TAM) revenues are projected to grow by 2.5 times, while the total market is expected to double its revenue in 2009.4,11
Moreover the companies in india are not so much effected due to the recession due to the some of underlying points :
• Booming entertainment sector has resulted in providing an impetus to the sector.
• Internet Retailing has great potential. Today, consumers are more than willing to purchase branded items over the internet. There are huge opportunities for the Company to expand and grab the benefits of retailing.
• Digital models scoring over analog controls. Digital techniques have slashed manufacturing times and costs have also reduced.
• The fast saturating urban markets are making the manufacturers turn their attention to morelucrative and largely untapped rural markets. Increase in rural income and prosperity, enhancedstandard of living, improved infrastructure have opened up the markets of B & C Class cities.
• There are opportunities to expand the range of components so as to reduce cost of products.
• There are opportunities to increase penetration in the Indian Consumer Electronics and Home Appliances Market; and domestic and global growth by launching innovative products.
• Organized retailing which now constitutes around 4% of total retail sector is likely to grow at a much faster pace thereby providing huge opportunities. There are opportunities to increase the sales of different range of products manufactured by Company by way of association/tie‐up with retail outlets; Super Market; Hyper Marts etc.,
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CONCLUSION:
Government of India and the Indian Electronics Hardware manufacturers have to work in tandem, and take some proactive initiatives. The initiatives to be taken by the Government of India in future can include:‐ • Identification of a vision and strategic growth plan; • Reducing operational costs of manufacturing and improving business attractiveness; • Promoting single manufacturing clusters (for example Motors Port Valley, Southern
England); • Promoting R&D activities and human resource development; • Promoting India as an ideal destination for Electronics Hardware manufacturing; • Promoting anchor investment in Indian Electronics Hardware industry; • Relaxation of Labor Laws; • Identification of thrust areas and development of incubators; • Skill development; • Pro‐active policies for development of entrepreneurship in hardware sector like
software; • Telecom Company could start up with 4G systems as it provides ultimate solution to
everyone. The slogan of three A’s i.e. anything‐anywhere –anytime
In addition to this, following points can also be considered: • Creating more hubs for rural distribution and make it more efficient. • More focus must be on designing and manufacturing global products and then reach
out to other emerging markets. • India should also leverage its strengths in software to build high‐complexity, medium‐
volume products for the developed markets. • Indian industry should focus on investing products that matter to rural and bottom‐
of‐the‐pyramid segments. • In cost‐cutting mode, firm should emphasis more on logistics and wastage reduction
than sacking skilled professionals. • Improving sales automation tools and by organizing focused training can be one of
the counter strategy to improve sales. We, through our detail project analysis see no reason why India cannot emerge as a manufacturing hub in the coming years and soon be known as another silicon valley.
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References:
1. 1987 Electronic Market Data Book, Electronic Industries Association, Washington D.C. 2. Net Profits in the domestic electronics industry 1991 ‐ 2001: “A comparative analysis of
the new and the old companies”, Nitin Kumar, Anand Pandey, August 2003. 3. Gartner survey website, ( www.gartner.com ) 4. Electronics For You, January 2009. 5. India Brand Equity Foundation (“IBEF”), ( www.ibef.org ) 6. Ministry of Communication and Information Technology, Government of India.
(www.mit.gov.in) 7. Trinity Economic Papers Series, Trinity collage Dublin, ( www.tcd.ie ) 8. Industry Association (SIA), Industry Facts and Figures, ( www.semichips.org ) 9. Electronics industry Information System, a software based to collect data base of
company, data bank and information division, Electronic Niketan, New Delhi. 10. EE Times India, (www.eetindia.co.in) 11. ISA and Frost & Sullivan survey website.
12. http://money.rediff.com/companies/
13. Official sites of the following companies:
• Bharat Electronics Limited
• Hindustan Computers Limited
• Array Technologies Incorporated
• Intel Corporation
• Videocon Industries Limited
• Nokia Corporation
• Samsung Electronics
• Integrated Device Technology 14. http://intc.client.shareholder.com/ 15. http://files.shareholder.com/ 16. http://www.moneycontrol.com/ 17. http://www.icicidirect.com/