Focus on Indo-Japan ties in embedded, design and automotive

Recently, the India Semiconductor Association (ISA), in collaboration with Japan External Trade Organization JETRO, recently took a business delegation to Fukuoka, Japan, on November 11-13, 2009, to promote the Indian embedded, automotive and design companies, and to attend the 9th International Workshop on Microelectronics Assembling and Packaging (MAP 2009).

Indian electronics industry
During the inaugural session, N. Krishnan, director, STPI, and leader of the Indian delegation, made a presentation on “Electronics Industry in India-an Overview”.

According to him, the Indian electronics industry is on a growth path. The domestic production is at $20 billion in 2008-09 and exports at $4 billion, representing a growth of 21 percent over the previous year. All the global top 10 fabless design companies have India operations and 22 of the top 25 semicon companies have design/development centers.

India is now emerging as a preferred destination for manufacturing. A good electronics ecosystem is building up and there is a shift to increased local value addition. He also touched upon the highlights of the Indian semiconductor policy. These include:

* The government will bear 20 percent of the capital expenditure during the first 10 years for units located inside SEZs and 25 percent for those outside it. Window open till March 2010.
* For semiconductor manufacturing (wafer fabs) plants, the policy proposes a minimum investment of $625 million and $220 million for ecosystem units, including ATMP.
* There is a ceiling of three fab units and 10 ecosystem units for incentives under the policy.
* Key benefit is the grant of the SEZ status.
* There has been an overwhelming response to the Government’s policy – 17 proposals have been received envisaging an investment of $35 billion, with 15 proposals received relating to solar PV manufacturing.
* Government of India has given in-principle approval to 12 proposals.
* There is a great opportunity to leverage the policy incentives for ATMP operations.

Advantages of outsourcing to India
Krishnan highlighted the SEZ incentives, which includes no license required for import, exemption from customs duty on import of capital goods, raw materials, consumables, spares, etc., exemption from central excise duty on procurement of capital goods, raw materials, consumable spares etc. from the domestic market, supplies from DTA to SEZ units treated as deemed exports, reimbursement of central sales tax paid on domestic purchases, etc.

What about the advantages of outsourcing to India? According to him, these include an overall 7-10 cost reduction compared to the current scenario, as well as assembling only when required and building products that are required, so there is no waste.

India is already a proven case for IP, embedded systems and IC design, besides boasting of a skilled employee base and strong R&D capabilities. All of these provide Japanese companies a major opportunity to reduce cost and improve customer satisfaction.

India rising on global stage
The second day of MAP 2009 featured a host of presentations from the ISA-led Indian delegation during the India Session.

Ms Poornima Shenoy, president, ISA, spoke at length about India’s status as a rising player in the world electronics design stage. She touched upon the strength of the country’s semiconductor design industry, which is increasing witnessing a growing role of the independent design companies (IDCs). These IDCs provide flexible business models for design engagement. They are involved primarily in front end design work, providing testing and verification-level services, and continue to mature in terms of experience and capabilities.

The growth in India’s IC design industry is being driven by global corporations who are establishing captive design centers or expanding their existing design capacity in India. The Indian design companies are therefore moving up the value chain. There is a high level of maturity in product engineering and development, and project management expertise. India’s IC design industry is particularly strong in important market segments such as wireless, automotive and consumer electronics.

Some challenges currently faced by India include a talent crunch at the middle-level technical and managerial level, resulting in attrition, rising cost of staff, competition from other design destinations such as Eastern Europe, the Middle East, China and Israel, and the absence of commercial semiconductor fabs in India.

She added: “India has the potential to address the challenges mentioned earlier and grow as the preferred outsourcing/off shoring destination for semiconductor companies. We invite Japanese companies to leverage India’s strengths and avail of this opportunity.”

India Semiconductor Vision – ISV 2020
Dr. Pradip K. Dutta, Corporate Vice President & Managing Director, Synopsys India, presented the India Semiconductor Vision – ISV 2020. This vision includes:

* Focus semiconductor and related enabling technologies on new growth markets critical to India’s needs such as healthcare, renewable energy.
* Lead in new technologies by focusing device manufacturing and ATMP on new component technologies, e.g., MEMS/PV and nanomaterials.
* Fund and guide research through industry/academia/government consortium, using market specific technology roadmaps.
* Some focus areas of the ISV2020 include promoting IP vendors, developing more fabless semiconductor companies, focus on ATMPs and material suppliers, and promote more of ODM/EMS and board design services. Dr Dutta also projected a forecast of India’s electronics industry by segment up to 2020 (see table below).

 

Forecast of India's electronics industry by segment up to 2020. Source: ISA, India

Kuttappa Bittiananda, Practice Manager – Semiconductor & System Design, Wipro Japan discussed how delivery challenges could be bridged in Japan. EAGLEWISION is Wipro’s design methodology for LSI, FPGA and board designs.The methodology aims to deliver cost effective and high quality designs through guidance, scrutiny, automation and re-use. The methodology focuses on prevention, detection and early correction.

Tetsuya Tsuruta, Patni Computer Systems Ltd, made a presentation titled: Exploring Business opportunities for Kyushu in collaboration with Indian partners. He spoke about the role of green embedded technologies (ET) in the semiconductor value chain. Green ET means a chance — where product re-engineering is required.

For instance, minimizing the form factor and components on the module helps in the reduction of PFC gas emission drastically. Also, ASIC/PFGA/SoC design and software/firmware are required for not only reducing the semiconductor pitch, but also re-engineering of the circuit.

Tsuruta added that re-engineering requires close communication with existing Japanese engineers at the first stage. The domain knowledge for new green devices is required as well.

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