The world embedded software market holds a "huge potential" for Indian companies, mainly in the semi-conductor value chain -- comprising designing, packaging and testing -- National Association for Software and Service Companies said in Mumbai on Thursday.

With non-computing equipment like cell phones and other hand-held devices poised to grow at around 16 per cent compounded annual growth rate, India would emerge as a hub for embedded software market, Nasscom chairman Arun Kumar told reporters.

The rising demand for software content, rapidly evolving hardware sector, lack of effective protocols and software skills across e-world were also expected to be beneficial to the Indian firms, he said.

Nasscom had identified product development partnerships, validation, maintenance and professional services as key drivers for growth in the semi-conductor market. For third party providers or offshore hubs in India, that was a tremendous opportunity, Kumar added.