Realizing the ESDM Potential in India
(ESDM - Electronics System Design & Manufacturing)
Dr. Sundar Kamath, Senior VP (Technology)
Sanmina Corp., San Jose CA
IESA Visions Summit – Feb 4 2014 Bangalore
Global Electronics HW Manufacturing
A Trillion$ Industry that keeps growing
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Electronics Manufacturing: 2013 - 2017
CAGR for Some Industry Verticals
$B
2013
2017
CAGR
Cellular Handsets
143.6
190.6
7.6%
Cellular
Infrastructure
45.7
58.2
6.4%
Other Phones
9.5
11.8
5.9%
Enterprise LANs
19.8
24.4
5.8%
WLANs
4.8
6.1
6.5%
DSL/Cable Modems
6.6
8.7
7.2%
PBX/Other CPE
15.2
19.4
6.4%
Carrier-Class
Equipment
34.2
43.2
6.4%
Other
7.6
9.5
5.6%
Total
287.0
371.9
7.0%
$B
Flight
Navigation
2013
2017
CAGR
18.8
26.6
7.2%
C3
18.3
23.4
6.3%
Weapons
In-Flight
Entertainment
16.96
21.5
6.4%
10.2
13.3
6.9%
64.3
84.9
6.7%
Total
$B
$B
2013
2017
CAGR
Servers
31.1
44.1
9.1%
Storage
12.7
17.8
8.8%
Workstations
9.1
11.5
6.2%
52.9
73.5
8.5%
Total
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2013
2017
CAGR
Diagnostics
Monitoring &
Surgical
28.1
35.7
6.1%
20.6
23.7
4.6%
Therapeutics
12.8
14.5
4.0%
61.59
73.9
5.1%
Total
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OEM – EMS - ODM: who does what…
EMS ($250B)
OEM ($700B)
Eg. IBM, GE, AMAT, NSN,….
Own the Design, IP,
Brand & Product Liabilities
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Market & Sell the
product, carry product
inventories
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Highest margins
Often use outsourced
manufacturing partners
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Eg. Sanmina, Flextronics
Foxconn, Jabil, ….
ODM ($150B)
Eg. Quanta, Compal
Wistron, Inventec, ….
Offer Design / IP /
Product Roadmap for
OEMs to pick from
May co-design with OEM
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Manufacturing Services,
Supply chain, Post-manf
services , repair,…
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Lowest margin, highly
competitive, Outsourcing
common in Comms,
Computing, Consumer,
Multimedia,….
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OEMs will Brand & Sell,
ODMs Carry Inventory,
TTM benefit to OEM
Generally better marg
ins than EMS model; ODM
owned by Taiwan Inc.
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Top 10 EMS Companies (2012)
Plexus $2.3B
Benchmark $2.5B
Kaifa Technology $2.6B
Universal Scientific $2.1B
Celestica $6.5B
Sanmina $6B
Kinpo Group $6.6B
Jabil $17.5B
Flextronics
$24.6B
Foxconn $132B
CY 2012 Market Share
Foxconn
Flextronics
Jabil
Kinpo Group
Sanmina
Celestica
Kaifa Tech
Benchmark
Plexus
Universal Scientific
Top 10 Worldwide
China
N America
Singapore
Source: MMI March 2013
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China
Singapore
USA
China
USA
Canada
China
USA
USA
China
$202.7B
71%
17%
12%
China rules the EMS market
5
Sanmina Overview
from Silicon Valley startup in 1980
to $6B global company today
25 countries, 44K employees
Integrated Manufacturing Services
Logistics & Repair Services
Design Engineering Services
Component Technologies
Products
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Key Markets: Long-term Focus
50% sales
#1 EMS
SCI Technology
Complete Design, Technology & Services Solutions
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Sanmina: Diversified, Strong Customer Base
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8
Sanmina: Focus on Technologies, Products & Services
Collaborative
Design and
Engineering
Interconnect
Mechanical
Systems
Design &
Engineering
Services
Optical , RF
Components
Manufacturing
Services (EMS)
Interconnect
Systems (Printed
Circuit Boards,
Backplanes,
Cables)
Optical
Components,
RF & MicroElectronics
(DRAM, Flash,
SSD Solutions)
PRODUCT
TECHNOLOGY
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metal, Precision
Machining, Die
Castings, Plastics)
Viking
Technology
Newisys Data
Storage
(JDM / ODM)
SCI
Technology
(Defense &
Aerospace)
Logistics and
Direct Order
Fulfillment
COMPONENT
TECHNOLOGY
Mechanical
Systems (Sheet
Sanmina Global
Services (Repair
& Logistics)
PRODUCT
TECHNOLOGY
Products and
Services
COMPONENT
TECHNOLOGY
COMPONENT
TECHNOLOGY
PRODUCT
TECHNOLOGY
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Vertically Integrated Manufacturing Services
Optical, RF
Microelectronics
Printed Circuit Boards
Backplane Fabs
Memory Modules
Storage Arrays
PCB & Backplane
Assembly & Test
Injection Molded Plastics
Aluminum die castings
Precision
Machining
Design &
Engineering
Cable
Assemblies
Enclosures
Racks, Chassis
System Integration
BTO / CTO
New Production
Introduction
Test Services
Manufacturing
Logistics &
Repair
One IT system worldwide
Manufacturing systems that drive quality and operational excellence
10
Global Operations: Built Around Our Customers
North America
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Austin, TX
Carrollton, TX
Costa Mesa, CA
El Paso, TX
Foothill Ranch, CA
Fort Mill, SC
Fremont, CA
Huntsville, AL
Kenosha, WI
Laredo, TX
Louisville, CO
Manchester, NH
Newark, CA
Ontario, Canada
Ottawa (Kanata), Canada
Owego, NY
Salt Lake City, UT
San Jose, CA
Toronto, Canada
Turtle Lake, WI
Europe
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Basingstoke, UK
Brno, Czech Republic
Fermoy, Ireland
Gunzenhausen, Germany
Haukipudas, Finland
Ma’alot, Israel
Miskolc, Hungary
Örnsköldsvik, Sweden
Port Glasgow, UK
Salo, Finland
Tatabánya, Hungary
Latin America
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Bogota, Colombia
Buenos Aires, Argentina
Campinas, Brazil
Guadalajara, Mexico
Juãrez, Mexico
Mexico City, Mexico
Monterrey, Mexico
São Paulo, Brazil
Africa
 Johannesburg, S. Africa
Asia
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Batam, Indonesia
Chai Chee, Singapore
Chennai, India
Depot Close, Singapore
Hong Kong, China
Kunshan, China
Melbourne, Australia
Pathum Thani, Thailand
Penang, Malaysia
Penjuru, Singapore
Shenzhen, China
Suzhou, China
Wuxi, China
Yasu, Japan
Close to our Customers: Engineering, Product Launch & Production
75 Sanmina Facilities Extend Your Global Reach
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Communications Networks: End to end solution
Passive
Components
Modules
Full system
Integration
Active
Components
Subsystems
Blades
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Leadership in Communications Equipment Manufacturing:
Wired, Optical, Wireless
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Medical Systems: Domain & Product Competencies
Mobile/Portable
“Core” Medical
Large Systems
Invasive, Implanted,
Disposable Products
Patient Tables
Blood Glucose Meters
Dermatological
Laser Systems
Ultrasound
Blood/Molecular
Diagnostics
DEVICES AND DISPOSABLES
• RF Urinary Incontinence
• RF Bowel Therapy
• GERD Disposables
Portable
Monitoring
• Electronic Injectors
Middle Ear
Infections
• Infusion Devices
• Components and CRM
In Home
Monitoring
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Cosmetic &
Therapeutic
Blood Separators
Respiration
Systems
CT & Nuclear Medicine
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Industrial, Capital Equipment, Cleantech
X-Ray Baggage Inspection
Biotech Instrumentation
LED Lighting
Industrial Printing
Semiconductor Fab
Planarization Tool
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Gas Analyzer
Oil & Gas industry
Semiconductor Process
Chamber
Solar Inverter Cabinets
Wind Turbine Pitch Control
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Defense & Aerospace Products
Broad Products Capabilities and Mix
Aircraft Systems
Processors
Data concentrators
Communications
Tactical Communications
C4ISR
Radiological Detection
Advanced radiation
Detection and monitoring
Fiber Optics
Dispensers
I/O bus technology
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Newisys: Computing & Storage
Rack Scale Computing & Storage
PCBS & Backplanes
 Complete Storage Products
Servers, Processors
 Enterprise, Cloud
datacenters - Backup and
High Performance Products
 Turnkey Product Design
Complete Solutions
Fan Trays, Cooling
 Racks and Enclosures
 Product Certification
 Functional Testers
 BTO/CTO, Repair
Power Supplies
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Viking: High Performance Memory Modules
Non-Volatile memory, DRAM and
SSD technologies
Full Custom Design Solutions
Advanced Packaging Technology
Network Switches
Servers
Enterprise, Network
Infrastructure, Embedded, and
Defense & Aerospace markets.
Innovation & IP:
ArxCis-NV™DIMM, DDR3; non
volatile, power fail safe
Storage
SATADIMM™, SSD in a DIMM.
Enterprise SSD with 75% of a
traditional 2.5-inch SSD
ATM’s, Kiosks
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Military Electronics,
Flight Recorders
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What we offer in India:
World class manufacturing
Product design services
Muthu Sivan, MD Sanmina India
Chennai Plant - Oragadam SEZ
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Sanmina INDIA - An Overview
Market Sectors
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Medical
Communications
Aerospace & Defense
Automotive
Multimedia
Clean Tech
Industrial
Storage & Computing
Sanmina India Design Center
MEPZ Tambaram Chennai
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Industry
Certifications
100 acres ORAGADAM SEZ CHENNAI
MANUFACTURING CAMPUS
EN ISO 13485
TL 9000
EN/AS 9100
ISO 9001
ISO 14001
ANSI/ESD -S20.20
OHSAS 18001
Design & Engineering Services
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Turnkey Product design
Electrical, Mechanical, Thermal
PCB Design, Signal Integrity
Software / Firmware
Test Engineering
Value Engineering
Regulatory Compliance
ISO 9001, AS9100, ISO 13485
Manufacturing Capabilities
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PCBA & Test
System Integration
Configure-to-Order (CTO)
Build-to-Order (BTO)
New Product Introduction (NPI)
Component Engineering
Supply Chain Localization
Repair and After Sales Service
Sanmina ESDM Model in India
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Examples of Design projects from Chennai team
for the Global market
Domain
Customer
Location
Design Project / Type of Engagement
Networking
USA
Networking
France
Networking
USA
Design & Manufacture of 10GigE Top of the rack SDN switch
Telecom
Italy
Design & Manufacture of high speed 38 layer backplane
Owego NY (PCB Fab)
Kunshan CHINA (BPA)
Storage
USA
Design & Manufacture of I-O module for Storage Appliance
Guadalajara MEXICO
Aerospace
France
Aerospace
Design & Manufacture of 100GigE-loop Back tester PCBA ,
& thin client PCBA
Design & Manufacture of IP secure gateway product
Sanmina
Manuf. Plant
Shenzhen CHINA
Patum Thani THAILAND
San Jose CA (NPI)
Singapore (PCB), Penang MAL
Reengineer & Manufacture of aircraft seat actuation controller
Patum Thani THAILAND
USA
Redesign of in-flight entertainment media controller
Patum Thani THAILAND
Medical
USA
Automatic Functional Tester for neonatal monitoring device
Huntsville AL
Medical
USA/INDIA
Automatic Functional Tester for MRI system boards
Chennai INDIA
Medical
USA
Automatic Functional Combo Tester for infant bed warmer
Multimedia
USA
Design and manufacture of Set top box (turnkey)
Guadalajara MEXICO
Industrial
Holland
Design and manufacture of LED lighting product
Guadalajara MEXICO
Industrial
Austria
Turnkey development of Digital Stamp (turnkey)
Chennai INDIA
Semiconductors
USA
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Chip testing & evaluation boards, reference designs (multiple)
Penang MALAYSIA
San Jose CA (Fab & Assembly)
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Sanmina India Manufacturing: Product experience
 Radio Front-end Filters
 BTS Radios & System Modules for GSM/EDGE , WCDMA & LTE
 Optical systems
 High Performance Blade Servers
 Storage systems
 POS Terminals
 PCBA’s for Biometric Scanners
 Infant Care Products
 PCBA for MRI Scanners
 PCBA’s for Microwave Receivers
 PCBA’s for Microwave Transceivers
 In-Flight Entertainment Servers
 In-Flight Passenger Units
 Energy Meters
 Equipment Efficiency Controllers
 Elevator Controllers
 PCBAs for Wind turbine Controllers
 PCBA’s for Green Energy Generators
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Sanmina India: Supply Chain Localization
Connectors
Keypads
Machined
Components
Cables
Fasteners
Injection
Molding
Tools
Plastic
Components
Rubber
Parts
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Labels
Die Castings
Pallets
Cushions
& Foams
Sheet Metal
Enclosures
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Recognition for Quality & Export Excellence
Chennai plant recognized by Indian Government & Customers
Receives national awards for excellence in electronics manufacturing - Export
Excellence & Quality Excellence (Golden Peacock, Rajiv Gandhi)
Receives Customer awards for Delivery & Quality Excellence
Mr. Sam Pitroda, Advisor to the Prime Minister of India,
presents the Excellence in Export award to Mr. Muthu Sivan,
Managing Director of Sanmina India
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Customer Award for POS Quality
performance (Zero returns)
Rajiv Gandhi National Quality Award, April 2013
Customer Award for Successful Launch
of HPC Servers
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Sanmina has demonstrated
world class ESDM
is possible in India
What’s needed to
Grow ESDM in India?
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Climate in Tamil Nadu for ESDM
• Good Logistics connectivity to Eastern Asia
• Effective Single Window Clearance for FDI’s
• Uninterrupted Power Supply Committed to Investors under MoU
• Support for Industry – Labor Relations
• Infrastructure improvement projects - Metro, Airport expansion etc.
• Excellent pool of Professional and Educational Institutes
• Surplus skilled, English speaking workforce with strong work ethics
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Government Policies and Incentives for ESDM
 National Policy on Electronics 2012
 National Manufacturing policy
 Modified Special Incentive Package Schemes (M-SIPS) for ESDM
 Preferential Market Access for Domestically Manufactured Products
 Setting up Electronic Development Fund to promote R&D
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Stakeholders: Role of Government & Industry
Role of Government
Role of Industry
• Simplify tax/duty and provide
incentives to local manufacturing
• Build Robust system for Quality and
Manufacturing Processes
• Proactive Infrastructure
Development (roads, power, water,…)
• Reduce New Product Introduction
Time, & Time to Market
• Promote “Brand INDIA”
• Be highly cost conscious & competitive
• Accelerate Labor reforms
• Deliver with world class precision,
timeliness AND Quality
• Incentives for companies on skill
development / training expenditure
• Develop and Mandate standards to
curb inflow of sub-standard
and unsafe electronic products into
the country
• Enhance the competitiveness of local
suppliers
• Help customer to migrate into local supply
base
• Be socially responsible to boost Education,
Infrastructure, Technology, & Environment
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A MUST for ESDM success
Creating an Indian ODM Industry base:
A 7-Step Approach
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Typical ODM Products – Top Markets
Markets
Computing & Storage
Communications
(Telecom,
Networking)
Consumer
Components
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Typical ODM Products
Motherboards, Graphics & Networking cards,
Laptops, Tablets, Servers
Printers, Peripherals, Displays
Storage appliances
LAN switches, hubs, routers
WLAN cards, access points
WiFi products
NW security appliances
Handsets, Smartphones, Digital Cameras
USB drives, Memory cards
POS terminals, Set top boxes
PCB, actives/passives, chipsets,
HDD, SSD, memory modules, LEDs,
Chassis, connectors, power supplies, cabling
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Top Ten ODMs
$B
$B
Pegatron
Quanta
Compal
Wistron
Inventec
Qisda
Venture
Kinpo
Electronics
AmTRAN
Ability
Enterprise
Total
23.0
20.5
16.8
16.2
11.0
2.9
1.3
1.1
.7
.6
94.1
Taiwan
Taiwan
Taiwan
Taiwan
Taiwan
Taiwan
Singapore
Taiwan
Taiwan
Taiwan
Taiwan totally dominates the ODM business, no competitors
Billions
$25
$20
$15
$10
$5
$0
Pegatron
Quanta
Compal
Wintron
Inventec
Qisda
Venture
Kinpo
AmTRAN
Electronics
Ability
Enterprise
Nine-Month 2013 Results
Source: MMI Newsletter Dec. 2013
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STEP 1 – Learning from Taiwan’s success
Build a domestic ODM industry – become self reliant & self sufficient by 2025
Study Taiwan’s 30 year history in growing ODM
Takeaways / lessons for India model?
Business schools, Industry / Trade groups, Govt agencies
Work together on understanding the Taiwan success story
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STEP 2 – Identify market needs
Build a domestic ODM industry – become self reliant & self sufficient by 2025
Identify Product & Technology areas
critical to India’s consumption needs
India’s domestic market needs are not same as ROW
Cost, function, geography, culture, usage trends all matter
(IESA Product Needs report – Dec 2013)
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STEP 3 – The ODM Roadmap
Build a domestic ODM industry – become self reliant & self sufficient by 2025
Define a 10 year Roadmap for establishing
India’s world class ODM industry
Efficient collaboration & resource application, Market relevance,
Staying the course in reaching goals & achieving results
Review the roadmap on an annual basis
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STEP 4 – Offer Incentives
Build a domestic ODM industry – become self reliant & self sufficient by 2025
Put in place a clear & simple set of incentives for
aggressively encouraging the ODM sector
Apply lessons from past incentive programs & policies
Keep it simple, non-bureaucratic, easy to understand & implement,
Motivation is to create a new industry, achieve measurable results,
With tangible rewards for the ODM stakeholders
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STEP 5 – Bring in Successful Partners
Build a domestic ODM industry – become self reliant & self sufficient by 2025
Selectively partner with global ODMs who wish to
genuinely commit to creating this industry
Long term commitment is a pre-requisite
All participants must see financial gains – its not a charity drive
Large Industrial houses can take the lead in JVs, partnerships
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STEP 6 – Develop the ODM Ecosystem
Build a domestic ODM industry – become self reliant & self sufficient by 2025
Create a large scale, well planned skills and
infrastructure ecosystem to support ODM
Focus on Design, Supply chain, Manufacturing, Quality
Component industry is critical: Semiconductor devices,
Materials, Substrates, PCBs, Packaging, Assembly & Test
Automation, Equipment, Spares, Maintenance…
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World wide PCB Production: India needs to be a
global player, to support ESDM infrastructure
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STEP 7 – Create ODM campuses
Build a domestic ODM industry – become self reliant & self sufficient by 2025
Implement a national collaborative model:
create 6-8 ODM campuses across India
Each has a distinct specialty: avoid duplication & effort dilution
Promote best practices & healthy competition
Select locations purely on technical & business reasons
Infrastructure, access to trained skills, healthy industrial climate
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A Seven Step Plan for India’s ODM future
Build a domestic ODM industry – become self reliant & self sufficient by 2025
It is as essential as defense or energy or steel or agriculture….
STEP 1
Learn from Taiwan’s 30 year path to total ODM dominance today.
STEP 2
Identify India’s consumption needs – products, applicable technologies
STEP 3
Define 10 year roadmap for establishing a world class ODM industry
STEP 4
Implement clear & simple incentives for aggressively encouraging ODM sector
STEP 5
Selectively partner with global ODMs who are genuinely interested in India
STEP 6
Create a large scale, well planned skills and infrastructure ecosystem for ODM
STEP 7
Create 6-8 ODM campuses across India, with distinct & complementary specialties
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Product Development Ecosystem Needs for
System Design & Manufacturing
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Design & Development processes
HW, SW/FW, Electrical, Test,
ID, Mechanical, Thermal, Power
Life Cycle Management (PLM)
Design for manufacturability
Value engineering
Prototyping, New Product Intro.
Validation & Verification
Reliability, Regulatory Compliance
Sustaining Engineering
Environmental/Sustainability, EOL
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Supply Chain & Manufacturing
Component engineering
Manufacturing engineering
Process engineering
Test automation
Shop floor IT systems
Inventory management
Agility
Operations Excellence
Quality – Lean, six sigma
Logistics & Repair
Create PD Ecosystem in campus like setting so design & manufacturing
engineers can co-exist >> include Training center with prototyping facility
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