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The Indian Semiconductor Association (ISA) in association with market research firm IDC recently conducted a study on the Indian semiconductor and embedded software design industry, called India Semiconductor and Embedded Design Service Industry (2007-10): Market Technology and Ecosystem Analysis.

Besides statistics on the industry size and projections, the report throws up some key challenges that could later become a bottleneck, including lowering design and production costs, faster time-to-market, tapping quality talent, and developing multiple product models with rapid innovation to ensure steady growth.

To discuss the findings of the study and the major issues, ISA and Dataquest brought together prominent members of the Indian semiconductor industry at a roundtable discussion held in Bangalore.

Members of the panel included S Janakiraman, president and CEO, R&D Services, Mindtree Consulting; Poornima Shenoy, president, ISA; Vasudevan A, VP, Semiconductor and System Solutions, Wipro; Subash Bal, country director, Synopsys; Sanjeev Keskar, country sales manager, Freescale; and Kapil Dev Singh, country manager, IDC. Ibrahim Ahmad, group editor, Dataquest, moderated the discussion.

The panelists delved in detail on the current challenges, issues, and overall state of the Indian semiconductor industry. Semiconductor design is the spirit and soul of technology today, and it has a huge impact in the lives of both consumers and enterprise. India is going to play a major role in semiconductor technologyies in the future, said Ibrahim Ahmad of Dataquest, throwing the discussion open.

Members of the ROUNDTABLE discussion (L-R): S Janakiraman, president & CEO, R&D Services, Mindtree Consulting; Poornima Shenoy, president, ISA; Vasudevan A, VP, Semiconductor and System Solutions, Wipro; Subash Bal, country director, Synopsys; Sanjeev Keskar, country sales manager, Freescale; Kapil Dev Singh, country manager, IDC. and moderator, Ibrahim Ahmad, group editor, Dataquest

The Evolution
The Indian semiconductor and embedded design industry has come of age and is moving up the value chain. The members started their discussion by throwing light on how the semiconductor industry has evolved in the country over the years. The panel stressed on how the Indian software industry has helped in the growth of the semiconductor industry and the role of software, assembly language, and operating systems. India has reached an optimum level and companies are thinking of end-to-end development of solutions from India.

Earlier the semiconductor industry was hardware-centric, but things are now changing. The main reason is that software has become important in the product arena and a key differentiator in the semiconductor industry.

According to A Vasudevan, VP, Semiconductor and System Solutions, Wipro, The semiconductor industry has evolved into building expertise and new technologies. It is becoming more solution driven.

The semiconductor design industry is highly technology, knowledge, and innovation driven. Earlier, about 90% employees in a semiconductor company were IC designers and only around 10% software professionals. But today this is 50-50. Traditionally, India has been good in software, and this has really helped in value addition to the industry, said Janakiraman, president and CEO, R&D Services, Mindtree Consulting.

The growth of the industry depends highly on attracting youngsters and talented engineers. The Indian semiconductor design industry is in a growth trajectory. IP and Indian laws are more significant for the growth of the industry. We are focusing on bringing more electric and electronic engineers in the industry, said Poornima Shenoy of ISA.

Creating the Talent
The availability of highly skilled talent and cost effectiveness are the two major factors that make companies focus on India. On this Shenoy said, Research and availability of highly skilled talent is the core of the design industry. We need to bring prestige back to post-graduation and research. If we fail to increase the PhDs in India, in the long run, we are going to lose.

From Editor to Moderator: Ibrahim Ahmad of Dataquest	Stressing on the Needs (L-R): Subash Bal listens while Sanjeev Keskar talks at length on the needs of the Indian semiconductor industry

Most engineers and graduates lack practical knowledge, said Subash Bal adding, Academia-industry participation in the education program can help to overcome this issue. Deferring on that Vasudevan said, The industry is fast growing and new technologies are coming up frequently, so keeping pace with the changes is a big challenge for existing engineers. It is very important to induct new talent.

Talking about the talent crunch faced by the industry, Kapil Dev Singh of IDC said that the industry needs to be positioned in such a way that it attracts talent. And there is going to be pressure because a lot of other areas are fighting for quality talent also. This area lacks visibility, high-profile names, and the kind of glamor that Microsoft or Intel have, said Singh.

Educational institutes have to play a prominent role in grooming the talent. According to Subash Bal, The government can have schemes for students to go in for PhDs and higher research, after which it will be mandatory for them to be in India. Similarly, the industry needs to do more.

The Governments Role
The government has a prominent role to play in the growth of the semiconductor industry. The government should provide incentives and support to small and medium companies to leverage the market.

Janakiraman suggested the government to provide tax holidays under the STPI policy for the industry for another five years because it is still at an early stage as compared to the software industry.

Challenges
Chinas fast growth creates a huge challenge for the growth of the Indian semiconductor industry. China has started manufacturing and designing semiconductors, and the industry is growing drastically. Earlier, they were concentrating only on designing but now innovations are also taking place. The availability of huge manpower is an advantage, said Subash Bal.

As much as we believe that the players are growing and the market is growing, I have a feeling that we may be too comfortable with the thought of India becoming big in semiconductor. Other countries such as China are fast building on that. Today, China has 400 fabless companies. So much more and something drastic needs to be done, and if we dont do it, we will fall further behind, he added.

However, Janakiraman believes that growth of China is not a big challenge as India has the advantages of English-speaking talent and IP protection. The kind of investments done in the manufacturing sector, semiconductor policy, and development of SEZs will make a difference, but the result of all these can only be witnessed in the future.

The global slowdown is also a challenge for the booming semiconductor design industry in the country. The global slowdown will impact the industry adversely but in the long run, it will be an advantage for Indian companies.

Keskar of Freescale doesnt think the US slowdown will have much impact on India. There is so much of new product design and development work happening, and emerging markets like India are becoming big, he said.

Supporting Sanjivs view, Subhash said that there might be a knee-jerk reaction in the beginning, but afterwards the US and European companies will come back and India will come out stronger.

In Conversation: Ibrahim Ahmad and Kapil Dev Singh exchange notes in between discussions

According to Singh of IDC, Under slowdown times, Indian players will be forced to do things which will greatly benefit them in the long run. They will look at new technologies, explore new markets and products, and also review their business models.

Way Forward
Semiconductor companies in India are now concentrating not only in designing but also manufacturing. The industry in India is projected to cross over $11 bn by the end of 2011.

Semiconductor manufacturing is important but electronic manufacturing is even more important. India can be the test bedif you succeed in India, you are likely to succeed in other emerging Bric or Apac markets, said Janakiraman.

He points that as electronic consumption in India is high, the electronic and semiconductor industry will thrive. One or two successful companies in semiconductor manufacturing will help other players to come up.

Keskar of Freescale says that India has developed credibility in VLSI, embedded hardware, and embedded software but the way to grow, capitalize, and strengthen our position in the design industry is becoming complex.

The panelists agreed that in the future, the semiconductor industry would be more high profile but the challenges will also grow. It is important that all stakeholders ensure that the right ecosystem is created for the growth of the industry.

Pradeesh Chandran and Shikha Das
pradeeshc@cybermedia.co.in

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