Increase in consumer electronic goods sales, telecom and networking market apart from growth in portable and wireless products have emerged as the big drivers of semiconductor design industry.

Indian semiconductor industry that comprises of very large scale integration (VLSI) design, embedded software development, hardware and board design is estimated to grow 17.3 per cent year-on-year to reach $10.2 billion by 2012, said India Semiconductor Association (ISA).

Consumer electronic products contributed the highest at 34.43 per cent to demand for chip design projects. Telecom and networking products at 30.77 per cent and portable and wireless products at 15.07 per cent were the second and third highest contributors respectively.

As per an ISA study on semiconductor design, embedded software and service industry, the industry was estimated at $ 7.5 billion in 2010. The Indian semiconductor design industry also employed workforce of 1.60 lakh in 2010. From that, largest number of jobs was created by embedded software space at around 82 per cent. Telecom and information technology minister Kapil Sibal released the industry study on Monday in the capital.

Technologies such as light-emitting diode (LED) screens, 3G, WiMAX also led to increased demand for semiconductor designs. Automobile electronics in passenger and industrial vehicles are increasingly getting ‘smarter’ with on-board computer systems used to enhance safety and customer experience, the report said.

But, lack of product conceptualisation and management skills, analog design skills are some talent related challenges.

However, with support from government (department of information technology, ministry of communications and technology), ISA has certain goals that it expects to meet.

“We have more talents and skills coming up now, especially with the set up of national skill development corporation (NSDC) and more companies investing in this technology and design of semiconductors. If we could fix the issues of sector specific skill and quality, India could become world leader in this space,” president, ISA, Poornima Shenoy told reporters here.

She said India should build on its favourable intellectual property (IP) protection image and make it among the top five destinations for IP creation in the semiconductor design industry.