Several Indian EMS companies have entered the OSAT segment in recent months, and another leading company in this segment has said they are assessing the possibilities.
"We are evaluating this very carefully," said Jasbir Gujral, MD, and Satendra Singh, CEO of Syrma SGS. "For us, it's primarily about what makes sense from a business perspective. We are well aware that many companies have initiated activities in this space, and we continue to evaluate these opportunities."
The company will provide updates after finalizing its strategy and resolving pending issues as it methodically works through the complexities involved in its decision-making process.
"To provide some context, the semiconductor business is entirely distinct from our current Electronic Manufacturing Services (EMS)," Gujral said. "It has no direct correlation or legal ties to our EMS phase. Therefore, it represents a separate vertical that needs to be evaluated independently. We are in the process of determining whether this venture is feasible or not, a decision that only time will reveal."
One clear aspect of this project is the limitation of a first-mover advantage. "Any involvement would likely mean partnering with a foreign company to integrate into their existing supply chain," Gujral added. "Hence, entering the market late or early doesn't inherently offer an advantage, except in production timelines. This requires a thoughtful approach to capital allocation and a thorough evaluation process."
Syrma holds a prominent place in the Indian market as one of the top players and the second-largest independent Electronics Manufacturing Services (EMS) company. Its key sectors—automotive, industrial, and consumer—contribute approximately 25 percent, 30 percent, and 35 percent of its revenue, respectively. These sectors make up 85 to 90 percent of Syrma's total revenue, with healthcare and railways smaller sectors comprising the remaining 10 percent.
Accelerating with India's Growth Plans
Recent years have seen a significant increase in the level of activity within the manufacturing sector in India. Syrma anticipates a trend toward integrating design and manufacturing processes, which could result in a broader array of product offerings, surpassing traditional manufacturing solutions in the Indian marketplace.
"Another important aspect is the shift in labor cost dynamics," Singh said. "Historically, Indian industries, including ours, have benefited from labor cost arbitrage. However, this is changing. Indian companies must now adapt to industry 4.0 standards, emphasizing automation and data analytics to enhance cost-effectiveness. This means improving our connectivity and information processing capabilities, allowing for real-time decision-making and greater automation. This is a key area of focus within our company and something I'm monitoring closely."
In the electronics sector, partnerships are vital as the company works with policymakers and industry groups to enhance India's electronics infrastructure, responding to the need for faster product development. Furthermore, the company is positioning itself in the global supply chain by securing long-term agreements and robust infrastructure to meet the stringent demands of multinational corporations, ensuring customer needs are met and design excellence is prioritized in every partnership.
Future Plans
Syrma's core business strategy focuses on expansion and diversification within the manufacturing sector. The company has outlined numerous ambitious growth plans bolstered by robust global economic trends, increased global attention on India, and encouraging government policies.
"Our growth has been steady at around 60 percent over the past three years, and we anticipate continuing this higher growth trend for the next three to five years, which will necessitate the development or enhancement of our infrastructure," Gujral pointed out. "With India's strategic position in global geopolitics, we are well-placed to become a major manufacturing hub for global companies. As the second largest EMS provider in India, Syma is looking not only to serve Indian customers but also to cater to global clients seeking to diversify their supply chains."
The company is exploring vertical integration opportunities and has recently initiated a new venture, Segmental Technical Services, to bolster its software delivery capabilities.
"We're expanding our design services and considering larger production facilities as part of our strategy to meet the needs of our local and international clientele," Singh added.
Conclusion
Syrma is exploring new growth avenues, reflecting the company's commitment to innovation and market adaptation. This strategic exploration, set against an evolving global economic landscape, highlights the agility of one of India's key industry players.
As India's manufacturing sector continues expanding, Syrma's steps into potentially new territories could mark a significant development in the nation's increasing role in the global technology arena.
