realizing the esdm potential in india

Dr. Sundar Kamath, Senior VP (Technology)

Sanmina Corp., San Jose CA

IESA Visions Summit – Feb 4 2014 Bangalore

Realizing the ESDM Potential in India (ESDM - Electronics System Design & Manufacturing)

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Global Electronics HW Manufacturing

A Trillion$ Industry that keeps growing

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$B 2013 2017 CAGR

Diagnostics 28.1 35.7 6.1%

Monitoring &

Surgical 20.6 23.7 4.6%

Therapeutics 12.8 14.5 4.0%

Total 61.59 73.9 5.1%

Electronics Manufacturing: 2013 - 2017 CAGR for Some Industry Verticals

$B 2013 2017 CAGR

Flight

Navigation 18.8 26.6 7.2%

C3 18.3 23.4 6.3%

Weapons 16.96 21.5 6.4%

In-Flight

Entertainment 10.2 13.3 6.9%

Total 64.3 84.9 6.7%

$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%

Total 52.9 73.5 8.5%

$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%

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OEM – EMS - ODM: who does what…

OEM ($700B)

Eg. IBM, GE, AMAT, NSN,….

Own the Design, IP, Brand & Product Liabilities

Market & Sell the product, carry product inventories

Highest margins

Often use outsourced manufacturing partners

ODM ($150B)

Eg. Quanta, Compal Wistron, Inventec, ….

Offer Design / IP / Product Roadmap for OEMs to pick from

OEMs will Brand & Sell,

ODMs Carry Inventory, TTM benefit to OEM

Generally better marg ins than EMS model; ODM owned by Taiwan Inc.

EMS ($250B)

Eg. Sanmina, Flextronics

Foxconn, Jabil, ….

May co-design with OEM

Manufacturing Services, Supply chain, Post-manf services , repair,…

Lowest margin, highly competitive, Outsourcing common in Comms, Computing, Consumer, Multimedia,….

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Top 10 EMS Companies (2012)

CY 2012 Market Share

Foxconn

Flextronics

Jabil

Kinpo Group

Sanmina

Celestica

Kaifa Tech

Benchmark

Plexus

Universal Scientific

Foxconn $132B Flextronics $24.6B

Jabil $17.5B

Sanmina $6B

Celestica $6.5B

Kaifa Technology $2.6B

Plexus $2.3B

Universal Scientific $2.1B

China Singapore USA China USA Canada China USA USA China

Top 10 Worldwide $202.7B China 71% N America 17% Singapore 12%

Kinpo Group $6.6B

Benchmark $2.5B

Source: MMI March 2013

5 China rules the EMS market Skamath02’14

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

Complete Design, Technology & Services Solutions

50% sales #1 EMS SCI Technology

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Sanmina: Diversified, Strong Customer Base

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http://www.us.schindler.com/sec_index

http://picsdigger.com/image/eceb239a/

Logistics and Direct Order Fulfillment

Manufacturing Services (EMS)

Optical , RF Components

Collaborative Design and Engineering

Interconnect Mechanical Systems

Products and Services

Sanmina: Focus on Technologies, Products & Services

Design &

Engineering

Services

Interconnect

Systems (Printed

Circuit Boards,

Backplanes,

Cables)

Mechanical

Systems (Sheet

metal, Precision

Machining, Die

Castings, Plastics)

Optical

Components,

RF & Micro-

Electronics

SCI

Technology

(Defense &

Aerospace)

Newisys Data

Storage

(JDM / ODM)

Viking

Technology (DRAM, Flash,

SSD Solutions)

Sanmina Global

Services (Repair

& Logistics)

PRODUCT

TECHNOLOGY

PRODUCT

TECHNOLOGY

PRODUCT

TECHNOLOGY

COMPONENT

TECHNOLOGY

COMPONENT

TECHNOLOGY

COMPONENT

TECHNOLOGY

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Vertically Integrated Manufacturing Services

One IT system worldwide

Manufacturing systems that drive quality and operational excellence

Design &

Engineering

New Production

Introduction Manufacturing Test Services

Logistics &

Repair

Cable

Assemblies

PCB & Backplane

Assembly & Test

Optical, RF

Microelectronics Printed Circuit Boards

Backplane Fabs

Precision

Machining

Enclosures

Racks, Chassis System Integration

BTO / CTO

Injection Molded Plastics

Aluminum die castings

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Memory Modules

Storage Arrays

Global Operations: Built Around Our Customers

North America 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

Asia 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

Europe 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 Bogota, Colombia

Buenos Aires, Argentina

Campinas, Brazil

Guadalajara, Mexico

Juãrez, Mexico

Mexico City, Mexico

Monterrey, Mexico

São Paulo, Brazil

Close to our Customers: Engineering, Product Launch & Production

75 Sanmina Facilities Extend Your Global Reach

Africa Johannesburg, S. Africa

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Communications Networks: End to end solution

Active

Components

Modules

Blades

Subsystems

Passive

Components

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Leadership in Communications Equipment Manufacturing:

Wired, Optical, Wireless

Full system

Integration

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Ultrasound

Blood Glucose Meters

Portable

Monitoring

Dermatological

Laser Systems

Blood Separators

CT & Nuclear Medicine

Middle Ear

Infections

In Home

Monitoring Cosmetic &

Therapeutic

Respiration

Systems

Blood/Molecular

Diagnostics

Patient Tables

Medical Systems: Domain & Product Competencies

Mobile/Portable

“Core” Medical Large Systems Invasive, Implanted,

Disposable Products

• GERD Disposables

DEVICES AND DISPOSABLES • RF Urinary Incontinence

• RF Bowel Therapy

• Electronic Injectors

• Infusion Devices

• Components and CRM

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Industrial, Capital Equipment, Cleantech

X-Ray Baggage Inspection

Industrial Printing

Semiconductor Fab

Planarization Tool

Gas Analyzer

Oil & Gas industry

Semiconductor Process

Chamber

Biotech Instrumentation

Wind Turbine Pitch Control

Solar Inverter Cabinets

LED Lighting

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Broad Products Capabilities and Mix

Radiological Detection

Advanced radiation

Detection and monitoring

Aircraft Systems

Processors

Data concentrators

Communications

Tactical Communications

C4ISR

Fiber Optics

Dispensers

I/O bus technology

Defense & Aerospace Products

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Complete Storage Products

Enterprise, Cloud

datacenters - Backup and

High Performance Products

Turnkey Product Design

Complete Solutions

Racks and Enclosures

Product Certification

Functional Testers

BTO/CTO, Repair

Newisys: Computing & Storage

Power Supplies

Fan Trays, Cooling

Servers, Processors

PCBS & Backplanes

Rack Scale Computing & Storage

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Non-Volatile memory, DRAM and

SSD technologies

Full Custom Design Solutions

Advanced Packaging Technology

Enterprise, Network

Infrastructure, Embedded, and

Defense & Aerospace markets.

Innovation & IP:

ArxCis-NV™DIMM, DDR3; non

volatile, power fail safe

SATADIMM™, SSD in a DIMM.

Enterprise SSD with 75% of a

traditional 2.5-inch SSD

Network Switches

Viking: High Performance Memory Modules

Servers

Storage

Military Electronics, Flight Recorders

ATM’s, Kiosks

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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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Market Sectors

Medical

Communications

Aerospace & Defense

Automotive

Multimedia

Clean Tech

Industrial

Storage & Computing

Sanmina INDIA - An Overview

Manufacturing Capabilities

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

Design & Engineering Services

Turnkey Product design

Electrical, Mechanical, Thermal

PCB Design, Signal Integrity

Software / Firmware

Test Engineering

Value Engineering

Regulatory Compliance

ISO 9001, AS9100, ISO 13485

Industry

Certifications EN ISO 13485 TL 9000 EN/AS 9100 ISO 9001 ISO 14001 ANSI/ESD -S20.20 OHSAS 18001

100 acres ORAGADAM SEZ CHENNAI MANUFACTURING CAMPUS

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Sanmina India Design Center MEPZ Tambaram Chennai

Sanmina ESDM Model in India

Examples of Design projects from Chennai team for the Global market

Domain Customer Location

Design Project / Type of Engagement Sanmina Manuf. Plant

Networking USA Design & Manufacture of 100GigE-loop Back tester PCBA ,

& thin client PCBA

Shenzhen CHINA

Networking France Design & Manufacture of IP secure gateway product Patum Thani THAILAND

Networking USA Design & Manufacture of 10GigE Top of the rack SDN switch San Jose CA (NPI)

Singapore (PCB), Penang MAL

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 Reengineer & Manufacture of aircraft seat actuation controller Patum Thani THAILAND

Aerospace 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 Penang MALAYSIA

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 Chip testing & evaluation boards, reference designs (multiple) 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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Connectors

Cables

Injection

Molding

Tools

Plastic

Components

Rubber

Parts

Keypads

Fasteners

Pallets

Cushions

& Foams

Labels

Machined

Components

Die Castings

Sheet Metal

Enclosures

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Sanmina India: Supply Chain Localization

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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

Recognition for Quality & Export 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

23 Customer Award for Successful Launch

of HPC Servers Customer Award for POS Quality

performance (Zero returns)

Rajiv Gandhi National Quality Award, April 2013

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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

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• Simplify tax/duty and provide

incentives to local manufacturing

• Proactive Infrastructure

Development (roads, power, water,…)

• Promote “Brand INDIA”

• Accelerate Labor reforms

• 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

Role of Government • Build Robust system for Quality and

Manufacturing Processes

• Reduce New Product Introduction

Time, & Time to Market

• Be highly cost conscious & competitive

• Deliver with world class precision,

timeliness AND Quality

• Enhance the competitiveness of local

suppliers

• Help customer to migrate into local supply

base

• Be socially responsible to boost Education,

Infrastructure, Technology, & Environment

Role of Industry

A MUST for ESDM success

Creating an Indian ODM Industry base:

A 7-Step Approach

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Typical ODM Products – Top Markets

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Markets Typical ODM Products

Computing & Storage Motherboards, Graphics & Networking cards, Laptops, Tablets, Servers

Printers, Peripherals, Displays Storage appliances

Communications (Telecom, Networking)

LAN switches, hubs, routers WLAN cards, access points

WiFi products NW security appliances

Consumer Handsets, Smartphones, Digital Cameras USB drives, Memory cards

POS terminals, Set top boxes

Components PCB, actives/passives, chipsets, HDD, SSD, memory modules, LEDs,

Chassis, connectors, power supplies, cabling

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$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

Source: MMI Newsletter Dec. 2013

Top Ten ODMs

$0

$5

$10

$15

$20

$25

Pegatron Quanta Compal Wintron Inventec Qisda Venture Kinpo Electronics

AmTRAN Ability Enterprise

Billions

Nine-Month 2013 Results

Taiwan totally dominates the ODM business, no competitors

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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


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


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


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


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


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


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


It is as essential as defense or energy or steel or agriculture….

STEP 1

STEP 2

STEP 3

STEP 4

STEP 5

STEP 6

STEP 7

Learn from Taiwan’s 30 year path to total ODM dominance today.

Identify India’s consumption needs – products, applicable technologies

Define 10 year roadmap for establishing a world class ODM industry

Implement clear & simple incentives for aggressively encouraging ODM sector

Selectively partner with global ODMs who are genuinely interested in India

Create a large scale, well planned skills and infrastructure ecosystem for ODM

Create 6-8 ODM campuses across India, with distinct & complementary specialties

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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

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

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Product Development Ecosystem Needs for System Design & Manufacturing

Create PD Ecosystem in campus like setting so design & manufacturing

engineers can co-exist >> include Training center with prototyping facility

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realizing the esdm potential in india

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