I received an interesting news alert from the Global Semiconductor Alliance (GSA), formerly, Fabless Semiconductor Association, which spoke about how fabless companies, only, were funded in July 2011. Well, it also led me to this feeling that each time there is any new electronics or related segment being talked about globally, it seems that the Indian semiconductor industry is slowly losing the plot! One surely hopes not!!
May I take your attention back to Pravin Desale’s speech during Mentor Graphics’ U2U conference of December 2009. He had cited some numbers during his speech, borrowing heavily from GSA. According to the GSA Dec. 2008 figures, distribution of fabless IC companies is: Canada 29, USA 606, Europe 151, Israel 61 and Asia 510 — China 222, Taiwan 196, Korea 47, Japan 16, Taiwan 16, Singapore 7, Malaysia 4, and India 2-28 (two fabless companies and 28 design services/IC providers).
Agreed that these numbers should have changed a bit, if not, a lot.
Now, when the India Semiconductor Association (ISA) was formed on Oct. 28, 2004, members at the BangaloreIT.com that November, dwelt upon the need for fabless companies.
Somshankar Das, e4e, had said that for building fabless semiconductor companies in India, the country had a major advantage, as Indian talent was a large part of the global semiconductor industry. Some other advantages in favor of India at that time (Nov. 2004), were: local IC design service firms, who were creators of selective IP as well. Development of smart chips with embedded software was ongoing. Next, the US-funded cross border semiconductor firms were setting up development centers in India. Dr. Bobby Mitra, TI, had cited the need for microelectronics as the national agenda.
Well, where are we today? Why hasn’t the fabless semiconductor industry grown in India? Just two months ago, I wrote on how, China’s fabless market was set to double by 2015. Is any such movement even happening in India? At least, I am not aware, in case it were!
The establishment of fabless semiconductor companies is one good way to drive the growth of the semiconductor industry in India.
I still have the photograph of the founding members of the ISA, which is pasted above. The original participants were: Dr. Ananda, Dr. Madhu Atre, S. Uma Mahesh, Rajendra Khare, Dr. Sridhar Mitta, Dr. Anand Anandkumar, V. Veerappan, S. Janakiraman and Dr. Satya Gupta. Today, the ISA only has Dr. Satya Gupta as a representative. One hopes the others have not been left behind in the run of events following the ISA’s formation!
By the way, why am I referring to the original ISA, and fabless companies? Perhaps, there is a very deep significance!
While speaking with the Fabless Semiconductor Association, USA, some time back, I quizzed them on the major movers and shakers (or slips) among the top 25, and what are the reasons for those.
Qualcomm has broken into the top 10 for the first time. It’s the first time in the history of semiconductors that such a thing has happened, and is probably a sign of the times ahead.
One reason for this growth has been — Increasing foundry orders. A Digitimes article reported that Qualcomm will increase orders by 15-20 percent in the September quarter to meet projections of strong 3G handset sales. According to the article, sources at Qualcomm suggest that wafer starts per month in the December quarter could surpass 30,000.
There have also been reports of strong June quarter for 2007. Qualcomm’s $2.32 billion in June quarter sales represents 19 percent year-on-year growth. Record chipset volumes of 65 million were at the high end of 62 million-65 million guidance. UMTS chipset shipments were noted to have increased by 127 percent year-over-year and 79 percent quarter-over-quarter, with the quarter-over-quarter growth rate roughly 4 times the market growth rate.
Finally, chipset ASPs increased by 2 percent year-over-year and quarter-over-quarter, and are likely to remain stable.
Situation in Asia
FSA quoted the Strategic Marketing Association’s Quarterly Spot Report – July. While there have been announcements in India by SemIndia, HSMC, Moser Baer, etc., for fabs, there is every likelihood of another fab in the eastern Indian state of West Bengal. The technology ministry announced plans for a yet to be named fab at the India Design Center. Another possibility is a fab in Kochi, South India, by the NeST Group.
In China, Strategic Marketing Association expects that eight new fabs will start construction this year. Two fabs have started construction in the first quarter (Hua Hong NEC and ProMOS), and two more have started construction in the second quarter.
Grace Semiconductor, now headed by former Infineon boss, Dr. Ulrich Schumacher, which opened its first fab in 2003, began moving equipment into the shell of Fab 2, which was built at the same time as Fab 1. The company is installing used equipment and plans to begin production in Q1 0f 2008. The company also plans to begin building a 300mm fab, perhaps as early as next year, although financing is said to remain an issue for such a project.
Also in China, IC Spectrum began building a 200mm fab in Kunshan, about 45km east of Shanghai. Using 0.35micron technology from Toshiba, the new foundry expects to begin volume production by the first quarter of 2009.
TSMC began production in the second phase of its 300mm Fab 14 in Tainan in the south of Taiwan. This $2.4 billion fab will start production at 65nm and move to 45nm in 2008. There are also plans for a 300mm Fab 14, Phase 3 at the same location.
Looking at capex
In 2007, companies with capital spending budgets of $1 billion or more (the Billion Dollar Club) will account for 77 percent of all capital spending. Most of these companies (13 out of 20) are memory companies. Nine of these companies are from Asia Pacific (South Korea, China, Taiwan and Southeast Asia). Together, they plan to spend $23 billion this year, more than half of what the Billion Dollar Club has budgeted for capital spending.