India – The chip design business
01 February 2010
Back in May 2007 in my piece in EMT Worldwide (The Chip Business), I questioned the need for India to put huge investments into establishing new wafer fabs and instead advocating investments in Chip and embedded circuit designing, which has a much more favourable jobs created to investment ratio.
Later that same year, I got into an argument with a very senior Manager from a (then) very fancy Investment Bank now in somewhat of a disgrace, who was advising the Government of India to follow Jerry Saunders' dictum of “Real Players have fabs”, a comment he made when the industry (then predominantly vertically integrated independent device manufacturers) had not cottoned on to the advantages and economics of ‘fabless’. I repeated this line of thinking in my piece, The Indian Microprocessor.
It now appears that somehow I got this one right and the referred to Banker – well, mercifully we have not heard of him or his Investment Bank lately! Thankfully, the Indian chip and embedded design business has gone from strength to strength whereas we have not heard of any significant new wafer fab activity in the country.
According to the Indian Semiconductor Association (ISA) quoting the ISA – IDC Report of 2008, By that year the Semiconductor Design activity in India had a turnover of $ 7.37 billion employing over 150,000 highly qualified professionals. Embedded Software Design constituted a whopping 81% of this activity with VLSI design being 13% and hardware / board design being 6%. The growth rate of this sector is some 20% annually, so we can expect a turnover in excess of $ 12 billion by the end of Year 2010 (employing 180,000 plus professionals) of which embedded system design would have a turnover of $ 10 billion. It is believed that the global embedded design activity is worth some $ 25 billion annually. This roughly amounts to India producing a quarter of the world’s embedded design systems.
There are 130 plus companies in India involved in this activity, many of them multinationals, several others with overseas parentage and the number is growing every year. According to ISA, India based chip design entities are able to provide “mature, end to end designs, offering services from specifications to tape out, and the country has emerged as a destination for world class designs with excellence in both the front end as well as back end.”
There is of course the temptation to ascribe this growth in the design business to the rapid growth of the Indian electronics industry from $ 28 billion in 2005 to a
projected $ 363 billion by 2015 at a compounded annual growth rate of some 30%, accounting for 11% of the global market by 2015. Of this India’s own production of equipment was $ 11 billion in 2005, projected to grow to $ 155 billion by 2015.
I believe the growth in the Indian chip design business is more to do with the availability in the country of the human resource and its quality (not so much the cost) to carry out International level designing, and not just the growth of the Indian electronics industry. For a country that gave the world most of its modern mathematical concepts and tools, analytical skills and mathematical modeling is usually a given! An Ernst & Young report commissioned by ISA in 2007 highlights “ the quality and availability of a wide talent base, with a large pool of English speaking engineers; a favourable Intellectual Property Rights Regime (IPR) and years of design expertise in VLSI and embedded design and project management”. Clearly the IPR aspect is significant. To the best of my knowledge there has never been any IPR violation in the 20 years of the history of chip designing in India.
According to a Frost & Sullivan report, if the Indian chip design business continues to grow as per current trends, some 3 million professionals would be employed in the Indian Semiconductor business. So where is all this manpower going to come from? The initial lot of chip design engineers came from either the electronics vertical or were software engineers with some knowledge of electrical / electronics engineering, who pretty much learnt on the job. Responding to the need for formal training in chip designing many of the country’s leading institutes of technology and engineering colleges established well structured courses that by and large met the need of a nascent business.
Over the past few years of course training courses in chip / embedded system designing have really taken off with institutions outside of the main centres such as Bangalore, Hyderabad, Delhi etc., also offering courses. The DOEACC Society, which is an autonomous body established by India’s Ministry of Communications and Information Technology has now taken this further, by establishing formal training centres in Tier II & III towns of the country such as Calicut, Imphal, Srinagar, Jammu, Aurangabad, Gorakhpur etc., to provide an opportunity to bright, talented youngsters from small town India to become proficient in international level chip designing. A typical DOEACC training course for a diploma in VLSI designing runs for 24 weeks and has a fees equivalent to $ 600 whereas that for a diploma in embedded system design runs for 16 weeks with a fee equivalent of $ 400. Given that India is now set to graduate in excess of 400,000 engineers annually, the supply of manpower to the design business, at least theoretically, seems to be well assured.
As I have indicated above, the chip design business in the country has taken great strides, from just offering ‘plain vanilla’ logic implementation two decades ago to full end to end solutions currently. Given the increasing level of confidence in local capabilities as also being comfortable with the IPR controls and recourse, if at all required, under an independent judicial system, world leading companies such as NXP Semiconductors, ST Microelectronics, Freescale Semiconductors, Texas Instruments, etc. are now doing leading edge developments for the global markets at their Indian design centres.
For example, Freescale Semiconductor in India developed a family of 8 bit MCU’s with integrated LCD controller for heating, ventilation and air conditioning controls, with a 5 volt variant for very demanding modern automotive applications, and has helped in reducing costs of new vehicles. The Freescale India Design Centre has also developed a world class family of micro controllers for factory automation systems, industrial networking, building / lighting control and medical applications such as heart rate monitors.
TI’s Indian operation has come out with the 150 MIPS fixed point / 600 MFLOPS floating point performance PICCOLO controllers that are targeted at high end industrial control applications where real time control is critical. The TI centre has also developed the OMAP 35X processors that make it possible to have new applications at handheld power levels. The OMAP platform is able to provide a fantastic combination of laptop grade performance at hand held device power levels, all in a single chip.
The ARM India operation specializes in the implementation of high performance, low power ARM processors in advanced technology nodes. The ARM India operation is also involved in deploying EDA specific reference methodologies to global partners as also the development of a range of test chips.
NXP Semiconductors in India has developed a totally new global DTV platform (TV 550) that brings key features of IPTV to normal TV’s. The TV 550 combines front end video processing functions, such as DVB-T channel decoding for terrestrial broadcasts, MPEG decoding, analog video decoding, and advanced back end video picture improvements.
Even Indian owned entities are now doing world class designing. The Indian major, Wipro for example, has developed a complete iDTV reference design software for a Semiconductor company targeting the European market enabling it to be fully compliant for various target geographies. Wipro has also developed an in car digital TV solution for an automotive OEM targeting the Japanese market.
In the coming days, I believe, we will inevitably see many more such world class design solutions coming out of India. Watch this space!
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