Drop in US consumer spending and the impending market crisis , driven by high energy prices and the subprime turmoil, has started hitting the global semiconductor industry. But the Indian semiconductor industry is  taking  different path altogether. Since Chip growth is  ultimately dependent on consumer demand and , with a reduction in income-tax for the salaried classes in india and rise of salaries according to sixth pay commission   pushing  up spending power, there is bound to be  a surge in the uptake of consumer electronics like PCs spending power of consumers.Thus most verticals will remain unaffected by these market lows and hence the market for most multinational chip companies will shift to emerging countries like India, China and Brazil.

           Local manufacturing of electronic equipment in India  is bound to grow significantly, during the  period 2005 to 2015. According to the research  reports , the manufacturing growth rate of Indian electronics equipment, which was at 25 per cent in 2005, is poised to touch a growth rate of 50 per cent in 2010, and 34 per cent in 2015. A large part of the growth in local electronic equipment manufacturing will be driven by the growth in telecommunication equipment manufacturing, which will outpace the manufacturing growth rate in other application segments such as consumer electronics and information technology.

 The telecommunication equipment segment will be a strong growth driver for semiconductor onsumption, primarily due to the high semiconductor content of telecommunication equipment, and the sustained growth expected in the telecommunication services market in India. In 2005, the telecommunication segment had a share of 8 per cent in the domestic semiconductor industry's revenues; its share is expected to increase to 47 per cent by 2015.          There is hardly any manufacturing of semiconductors (ICs etc.) in India today. The EMS (electronic manufacturing services) companies in India source most of their requirements of ICs from other countries. In this respect, the Indian semiconductor industry has not been impacted much as a result of reduced American consumer spending. But  the reduced American consumer spending could possibly affect Indian companies engaged in the.