Here are highlights of the Union budget 2013-14 presented by P. Chidambaram, union Finance minister, Government of India. Also, is there finally, some hope for the Indian semiconductor industry?
* Doing business with India should be easy, friendly and helpful.
* Foreign investments must be encouraged.
* Accelerating growth is the main goal.
* Need to encourage FDI in consonance with economic priorities.
* To target $1 trillion in infrastructure in the 12th plan.
* There are incentives for semiconductor wafer fab manufacturing.
* There will be appropriate incentives for the semiconductors industry, including zero customs duty on plants and machineries.
* To increase allocation for science and atomic departments.
* Indian Institute of BioTechnology to be set up at Ranchi.
* Non-conventional wind energy sector needs help.
* Will encourage cities to take up waste-energy projects through PPPs.
* Plan being developed for Chennai-Bangalore industrial corridor.
* Preparatory work started for Bengalooru-Mumbai Industrial Corridor.
* To launch two new industrial cities in Gujarat and Maharashtra.
* Propose to continue with the Technology Upgradation funds scheme for the textile sector.
* India’s first women’s public sector bank to be set up.
* Woman’s bank license to be in place by October, 2013.
* All PSU banks branches to have ATMs by March, 2014.
* Zero customs duty for electrical plants and machinery proposed.
* Higher customs duty on set-top boxes.
* To provide more than Rs 4200 crore for medical studies.
* To allocate Rs 1106 crore for alternative medicine industry.
* To allocate 100 crores to AMU, BHU, TISS-Guwahati and INTACH.
* Government to set up National Institute of Sports Coaches in Patiala.
* To expand private FM radio to 294 cities.
* To auction 839 licenses for FM network to cover all India.
* Government to construct power transmission system from Srinagar to Leh at the cost of Rs 1,840 crore, Rs 226 crore provided in current budget.
* Mobile phones priced more than Rs. 2,000 will see duty raised by 6 percent.
* Extend tax benefit to electrical vehicles.
* A company investing Rs 100 crore or more in plant and machinery in April 1, 2013 to March 31, 2015 will be allowed 15 percent investment deduction allowance apart from depreciation.
* SEBI to simplify KYC norms governing foreign investors.
* SEBI will simplify procedures for entry of foreign portfolio investors to invest in India.
* Higher outlay on waste management.
* Government to monitor cost of doing business in India.
* Zero customs duty proposed for electrical plants and machinery.
* Proposal to provide Rs. 800 crore for the Ministry of New & Renewable Energy for generation-based incentive for wind energy projects as the non-conventional wind energy sector deserves incentives.
* Government will provide low interest bearing funds from the National Clean Energy Fund (NCEF) to IREDA to on-lend to viable renewable energy projects. The scheme will have a life span of five years.
* Proposal to set apart Rs. 2,000 crore and asked the National Innovation Council to formulate a scheme for the management and application of the fund.
Coming to semiconductors, the world today is discussing the viability of 450mm fabs. I am well aware that Malcolm Penn has been pushing for 450mm fabs across Europe. I believe that one such fab will cost in the excess of $25 billion, if not more. So, who will invest that kind of money in India? Do we have clean water and 24-hour electricity supply in any state that’s required for such a fab? What will this so-called 450mm fab manufacture? Does the fab have a blueprint in place? Well, have we even addressed any of these questions?
Recently, the India Semiconductor Association (ISA) signed an MoU with East of England International (EOEI) to promote and develop the semiconductor industries in their respective domains.
On August 31st, which is early next week, the ISA and the UK-TI will be signing an MoU to extend this relationship further.
My colleague, Usha Prasad and I met up with Chandrika Anil, Manager – Membership Services, ISA, to hear more about the MoU.
Elaborating on how the MoU between the ISA and UK Trade & Investment (UK-TI) is going to help in encouragement and development of Global Value Chain Partnerships, Chandrika said that the ISA and the UK-TI share a mutual interest to promote and develop the sector semiconductor industries in their respective domains. The MoU between ISA and UK-TI entails promotion of the concept of Global Value Chain Partnerships.
As part of the MoU, the two organisations have agreed that:
- Global Value Chain Partnerships are of mutual benefit in the ongoing development of the Indian and UK semiconductor industries and the relationship between them.
- ISA and UK-TI will co-operate with each other in the following activities to encourage and develop Global Value Chain. Partnerships between Indian and UK semiconductor firms. This allows for:
- Promoting the concept of Global Value Chain Partnerships amongst the Indian and UK semiconductor industries in the most appropriate manner
- This may include website, newsletters, conferences and direct discussion with firms.
- Identifying, through ongoing research and discussion, areas of potential business opportunity which could be addressed by Indian and UK firms working together
- These areas could form a set of themes around which ISA and UK-TI may wish to focus on seminars and other activities to raise awareness, understanding and interest.
- Encouraging firms in the two industries to register (free of charge) their interest in exploring relevant partnerships and business opportunities in the identified areas
- This would involve inviting firms to provide information about their interests and capabilities, periodically reviewing identified opportunities which may be relevant
- Facilitating meetings between firms and groups of firms to take forward discussions with a view to formation of Global Value Chain Partnerships
The MOU will create a synergy between India and the UK in the areas of design, device and applications.
You can read more on ISA’s website. Thanks for the interaction, Chandrika, and well done, Usha!
Yes, looks like it!
First, on August 31, the India Semiconductor Association and the UK-TI would be signing an MoU. The next day, September 1, there is a presentation by Ministry of New and Renewable Energy and key officials on the government of India’s policies to the industry!
Next, on September 4, the DIT Secretary R. Chandrasekhar and the Additional Secretary, will be interacting with semiconductor companies in Bangalore.
Further on, September 16 is the day when the Union Minister for New and Renewable Energy, Dr Farooq Abdullah, will be interacting with a small group of industry leaders at a solar PV conclave in Hyderabad!
That’s quite a lot, within a span of 15-odd days! Must say, this augurs well for the Indian semicon and solar/photovoltaics industry.
Interestingly, a lot of the big events are focusing on solar. So, my hunch is that the Indian solar industry may have some serious announcements to make in the coming weeks. Should that happen, I hope to bring those to you, time permitting.
TI bids for Qimonda’s tools
Oh, by the way, there’s news all over the Internet about Texas Instruments (TI) placing a bid of $172.5 million for Qimonda’s 300mm production tools from its closed DRAM fab. While this highlights TI’s focus on building the world’s first 300mm analog fab, I can’t stop wondering, what would have happened had an Indian investor really bought Qimonda!
Anil Gupta, Technovation 2010 and UK CIG Convener, India Semiconductor Association (ISA), also needs no introduction. As former managing director, ARM Embedded Technologies Pvt. Ltd, he has been a prominent figure in several industry events. Here, he presents his views on what needs to be done for the Indian semiconductor industry.
An interesting fact being brought up time and again within the industry is the requirement of a robust entrepreneurial spirit and the need for much more sources of funding for semiconductor product companies. Also, renewable energy, healthcare and security are some of the verticals where the Indian industry believes there is a lot of value to be added from the Indian market/need perspective.
Further, local products/systems design and development activity needs to be encouraged and kick-started in a big way in India, for the industry to really succeed big time!
What does Indian semicon need?
We have discussed several times in the past regarding what needs to be done with the Indian semicon industry. So, what really needs to be done, given the current slowdown? What can be done boost chip designing activities in India.
According to Anil Gupta: “The Indian story has always been a story of a lot of potential, but most often this potential is never realized.
“The software industry has done well and has gone far, perhaps, somewhat farther than the hardware or chip-design industry in India. However, you still don’t see a software product conceptualized, designed and developed in India that is worth mentioning.
“The Infosys’es and the I-Flex’es can do a phenomenal job of executing software projects for their customers, but they are all a far cry from the league of the top consulting firms that define the problem to be solved and the software solutions to be built.
“The Indian software industry is still plagued with the “revenue per head” model and is unable to grow beyond it. The Indian software companies clearly bring a significant value to their customers but this is NOT strategic value, it is merely an execution value.
“Compared with the software industry, the embedded systems industry in India is puny today. However, the opportunities are phenomenal because there is so much automation potential in so many verticals. However, once again, the lack of significant products/solutions development in India is a very big hindrance.”
From a technical expertise perspective, there is a lot of engineering talent available, but the expertise is in general quite shallow. Even in the open source space like Linux, there aren’t many noteworthy contributions to date from the Indian engineering community.
Is the Indian fab story truly dead and buried?
In the past, we have extensively discussed whether the Indian fab story was dead and buried. Do you see any change in the current situation?
Well, it is dead for now! Gupta added: “Its day will come ONLY when the economics works out in its favour. Today, it doesn’t!”
He said: “It is interesting that many point out to the success of the solar fab investments. However, it should be noted that there is no solar wafer manufacturing activity worth mentioning. Only modules are being assembled in India as there seems to be a global glut in wafer production. Thus, wafer fabs in India is a pipe dream for now since the economics doesn’t work out.”
Does India have entrepreneurs committed to product development and willing to take that risk? How can they be encouraged?
Gupta said that there are not that many who are willing to come out and take the risk, and the lack of funding is a very big handicap. The lack of prior successes that could be emulated is probably the biggest handicap.
In that case, what needs to be done in India to move up a higher level, beyond design and verification?
He said: “Clearly, a willingness to take risk, strong stomach to face failure, and strong will to learn from that failure to rise again from the ashes!”
The Union Budget 2009, detailed today by Honourable Pranab Mukherjee, Minister of Finance, Government of India, really has nothing much to speak about for the Indian technology sector, or what many would like to call as the Indian IT industry, barring the setting up of the Unique Identification Authority of India (UIDAI).
Some of the budget highlights include:
* Customs duty of 5 percent to be imposed on set-top boxes for TV broadcasting.
* Customs duty on LCD panels for manufacture of LCD TVs to be reduced from 10 percent to 5 percent.
* Full exemption from 4 percent special CVD on parts for manufacture of mobile phones and accessories to be reintroduced for one year.
None of these proposals will significantly boost manufacturing in the country. There is also a great need to boost home-grown companies!
Among the good points, the minister said that he will urge his colleagues in Central and State Governments to remove policy, regulatory and institutional bottlenecks for speedy implementation of infrastructure projects. The infrastructure projects include telecommunications, power generation, etc. This is some good news!
The IT industry has pointed out that it is facing difficulties in the assessment of software which involves transfer of the right to use after the levy of service tax on IT software service. To resolve the matter, the minister has proposed to exempt the value attributable to the transfer of the right to use packaged software from excise duty and CVD. Perhaps, this is some good news as well.
The minister also noted that the setting up of the Unique Identification Authority of India (UIDAI) is a major step in improving governance with regard to delivery of public services. The first set of unique identity numbers will be rolled out in 12 to 18 months. Rs. 120 crore has been provided for this project. This is also good news.
One other point to note is the feduction in respect of export profits available under sections 10A and 10B of the Income-tax Act. The deduction under these sections would not be available beyond the financial year 2009-2010. To tide over the slowdown in exports, the minister has proposed to extend the sun-set clauses for these tax holidays by one more year, i.e., for the financial year 2010-11.
Semicon, solar seem neglected this time!
The budget has missed out in helping develop the semiconductor and solar/PV industries. These sectors require the full backing of the government. Even local telecom manufacturing seems to have been bypassed. Nor is there any mention of how foreign direct investment (FDI), can be enhanced in these critical sectors.
Especially, solar photovoltaics holds a lot of promise. A couple of months ago, SEMI India, in its paper on solar PV in India, had highlighted the need for more action from the government of India, a more closer industry-government collaboration, as well as the need for financial institutions to pay more attention to the solar/PV segment in India.
I also didn’t see any proposal in the budget that would help strengthen India’s semiconductor ecosystem. How can India become an even more attractive destination for foreign investors? There are companies, especially some Indian technocrats, who would probably like to return to India and set up semiconductor product companies. Would the VC community finance semicon start-ups? What would excite these folks?
Recently, BV Naidu, chairman, India Semiconductor Association, (ISA), mentioned in a discussion, that it would be appropriate if the Government of India could provide seed and start-up capital for new ventures and set up a focused venture fund of about Rs 200 crores.
According to him, the technology development board could administer these funds and the fund may provide up to 80 percent of the approved project cost with equity balance being brought in by entrepreneur. The Government can also subsidize the acquisition of EDA tools by start-ups and other SMEs in this sector.
None of these points have been addressed in today’s union budget!
Someone recently questioned me whether India will ever have a fab. Frankly, I don’t know! Having a good, strong local semiconductor industry does require a huge support from the government.
This could’ve been a much more braver and bolder budget. Perhaps, future budgets will address points given a miss in this edition.
B.V. Naidu, Group Chief Executive Officer, Genexx Enpower Corp. Pvt. Ltd, and currently Vice chairman Of Matrix Enport and Group CEO, VANPIC Projects, recently took over as the chairman of the India Semiconductor Association (ISA). He brings over 23 years of experience in developing the IT industry across India as part of the Department of Information Technology/Software Technology Parks of India (STPI).
Naidu’s tenure at ISA’s helm should turn out to be a very interesting one, given that India now has a new Union Government and Union Cabinet in place, and the latest Union Budget is likely to be announced soon. In this interview, Naidu also talks about the industry’s expectations from the Central Government, on the fabs vs. fabless debate, and on the need for building a system for incubating Indian start-ups, respectively.
A very interesting development would be the ISA’s proposal of the India Semiconductor Vision 2020 Document for the country. When this document is tabled, it should interest those countries, and companies, looking to invest in India — as the document would lay out all of the clear, long term goals for the Indian semiconductor industry. Exciting times seem to be ahead for the Indian semiconductor industry. Excerpts:
Main goal for ISA
Naidu said that the ISA needs to get adopted to the changing dynamics in the industry with the increasing domestic market. It is necessary for India to enhance the product design capabilities — which are made in India for India. In view of this, the ISA is enhancing its scope to cover the embedded software and systems companies.
“As a result of the new semiconductor policy, there has been spurt of the growth of the solar PV industry in the country. ISA has spearheaded the semicon policy, ISA is also covering the solar PV industry. Thereby, ISA is spreading its reach to cover the embedded software, electronic products as well as photovoltaic sectors,” he said.
Top five points on ISA’s agenda
BV Naidu: According to ISA, these should be:
i. ISA would work along with industry, academia and the Government, and formulate the strategy for the growth of fabulous design companies, product design companies, ecosystem companies and solar PV companies.
ii. ISA would also propose the India Semiconductor Vision 2020 Document for the country.
iii. ISA would enhance its activities focusing on increased product desired companies.
iv. ISA will put up a plan for working along with entrepreneurs, mentors, venture capitalists and academic institutions to enhance entrepreneurship and IP creation.
v. ISA will work with the Union Government to enhance the growth of the solar PV sector, its visibility and Government incentives to make this industry viable for growth in India.
Building semiconductor ecosystem in India
BV Naidu said that the ISA is taking several steps. These are:
ISA will strive to enhance the strategic value to its member companies — semicon, systems and solar — by creating balanced eco system around the its stakeholders — industry, government and academia.
ISA should be accepted as a tier 1 industry body and think tank/advisory body for influencing policy for the Central and State governments. ISA would also encourage an entrepreneurship ecosystem focus in innovation and design. As for talent, ISA will aim for 100 PhD enrollments in research in medical and energy over the next five years.
With regard to what ISA would be doing in the coming year and in the current economic scenario, it would include the following:
For the government:
* Aim to remove anomalies in duty structure for semicon companies (Mo Fin/Com).
* Grow further fabless design companies in India (DIT).
* Roadmap for electronic manufacturing in India (NMCC).
* Take forward recommendations of SPV report (MNRE).
* Take forward the Semicon Policy implementation.
* Strengthen ties with state governments.
* Create platforms for mentoring & funding interaction with VCs.
* Make the ISA website a resource centre on the Indian semicon industry.
Market facing activities:
* Increase domestic market.
* Made in India for India.
* Increase competitiveness of product design, mfg & market reach.
* Position India as solar PV hub.
* Publish market sales data on a quarterly basis.
* Aim for at least 20 PhD enrollments in research in medical and energy over the next 12 months.
Education and research perspectives
BV Naidu added that the participation of education and research would be as follows:
* Aim for 100 PhD enrollments in research in medical and energy over the next five years.
* Close working partnership between ISA and VSI to drive research agenda.
* Strong existing commitment to this agenda from VSI through corpus.
* Need each ISA member to sponsor at least one full time PhD student each year over the next five years.
* Commitment to be financial (Rs 25,000 pm), mentoring and test chips.
* Sponsorship amount will also cover international paper presentation, faculty support, kits, etc.
* ISA will work with DST to potentially match the aid from industry.
* VSI will work with universities and sponsoring companies to identify and mentor the scholars.
* All fundamental IP from the research will be available to the pool of sponsoring companies.
ISA’s goal is to drive the fundamental pre-competitive semiconductor research in medical and energy in India.
Boosting semicon manufacturing
According to BV Naidu: India’s chip manufacturing has been restricted to captive centers for defense and aerospace to date. The announcement of the semiconductor policy 2007 is likely to see the opening of doors to global investors in both chip manufacturing and its ecosystem, and related hi-tech manufacturing.
The Government of India has announced a national semiconductor policy. It seeks to establish India as an attractive destination for global investors. The policy has financial subsidies and it is necessary that due diligence takes place before these benefits are sanctioned. The appointment of the Appraisal Committee and the setting up of guidelines to evaluate investments are the key for the long-term effectiveness of the policy and to build the sector.
The solar photovoltaic industry has received a real boost with the introduction of this policy and given India an opportunity to be a global player. It has also opened up opportunities for investments and employment.
Given the current economic climate, it would not be an uncommon request if the semicon policy is extended from 2010 to at least 2014/2015!
“ISA, particularly, will work along with the Government of India and various state governments to create manufacturing clusters around the country. The ISA also conducts the Excite exhibition to bring all the ecosystem players who could bring the manufacturing industry together,” he added.
Fabs vs. fabless
Fabs vs. fabless has been an interesting debate. What should be the way forward for the Indian industry?
BV Naidu said: “Currently, the Indian semiconductor companies mainly focus on IC design services comprising VLSI design, board design and embedded software and are mostly in services, with a small number of product companies. There is also some amount of board level fabrication and testing activity.
“India has the potential to become a global design centre and a leader in product design, development, testing, fabrication and distribution. As a strategy, one should focus initially on product design, development, assembly and test, while leveraging wafer fabrication capability from the most competitive sources in the region.”
We haven’t seen many start-ups in the recent past. How can the India industry go about trying to build a system for incubating Indian start-ups?
BV Naidu: It would be appropriate if the Government of India could provide seed and start-up capital for the new ventures and set up a focused venture fund of about Rs 200 crores. The technology development board could administer these funds and the fund may provide up to 80% of the approved project cost with equity balance being brought in by entrepreneur.
The Government can also subsidize the acquisition of EDA tools by start-ups and other SMEs in this sector.
Prototype development centers with adequate fabrication facilities can be set up as well. These centers can be managed by industry associations. Recurring costs could be met by charging user fees. ISA can be given a grant for this purpose.
The above steps will encourage entrepreneurship eco-system focus in innovation and design.
Finally, what are the industry’s expectations from the new Central government?
BV Naidu said that the key areas of focus include the following:
a) Semiconductor manufacturing
i. Extension of Semicon Policy
b) Semiconductor design
i. STPI extension
ii. Transfer Pricing
c) Solar PV
i. Duty structure (point no. 3 under chapter VII on Solar PV in our pre-budget memo).
We have also made the following requests with the Government of India:
* Significance of semiconductor industry – need to accord it National Agenda status.
* Government of India Semiconductor Policy 2007 – suggested amendments.
* Domestic electronics hardware manufacturing – proposals to enhance its competitiveness.
* Fabless design companies – recommendations for growth.
* Semiconductor related research – a focus area.
* Other key proposals
* Solar PV manufacturing – Recommendations to promote domestic industry.
Dr. Biswadip (Bobby) Mitra, Vice Chairman, India Semiconductor Association (ISA), and President and Managing Director, Texas Instruments India, really needs no introduction.
He has been actively involved with TI India since its inception, and is among the well known and respected stalwarts within the Indian semiconductor industry.
Dr. Mitra was recently nominated as the vice chairman, ISA.
Naturally, it was interesting to get into a conversation with him to find out more about ISA’s agenda in the coming year, and the impact it could have on the Indian semiconductor industry. I also quizzed him regarding the steps ISA be likely taking for building and strengthening a semiconductor ecosystem in India. Excerpts:
Key points in agenda
Let us start by finding out the key points on his agenda for the ISA in the coming year and why?
According to Dr. Bobby Mitra: The Agenda… “I believe, we have a once-in-a-generation opportunity to transform India from an emerging economy to an emerged economy through technology innovation. A robust technology infrastructure must be the foundation of the future Indian economy.
“We can leverage technology to make healthcare and education affordable and available to the masses. Technology can also play a pivotal role in the greening of the environment through a variety of highly energy-efficient solutions. The future of our security infrastructure can also be built on the foundation of technology innovation.
“A large number of system design and manufacturing OEMs in India, and a few large and many medium/small-sized companies, are at the forefront of driving this technology innovation in India, and other emerging economies. Semiconductor solutions are the engine behind such innovations.
“As part of the ISA, our focus will be to provide an impetus to these companies by developing an electronic design and manufacturing ecosystem that is globally competitive and efficient.
“As part of ISA, we will also focus on developing a technology research agenda in India that is targeted at seeding the right solutions for the emerging economies. This will require deep insights into the intricacies and characteristics of an emerging economy — and the technologies that can accelerate their growth. Through targeted research in healthcare, energy, education etc., we will develop future technologies that will drive the transformation of India from an emerging to an emerged economy.”
By working closely with other emerging economies and global industry associations and research bodies, we will also build a roadmap in thrust areas such as energy, healthcare, education and security.
…and the Opportunity to Impact:
Dr. Mitra added that the opportunity to impact is huge. According to the ISA-Frost & Sullivan report (2006):
* The direct impact of semiconductor driven industry will be $202 billion by 2015 contributing to more than 12 percent of country’s GDP.
* The induced impact will be $226 billion by 2015 contributing to additional 15.9 percent of the country’s GDP.
* The combined impact will be more than 27.9 percent of our country’s GDP.
* No single industry will have the ability to impact the nation’s economy in a similar manner.
* In India, direct impact of hi-tech driven industry will be $202B by 2015 contributing to more than 12 percent of the country’s GDP.
“For India, to seize this once-in-a-generation opportunity, we need to build a robust technology infrastructure as our foundation for the future. ISA with its member companies playing a defining role in developing and implementing this roadmap for the future.
“Most importantly, by maniacally driving this agenda, we can make a lasting difference to the lives of the millions of people in our country,” he noted.
Product development in India
What can be really done to trigger off more product development in the semicon space in India?
According to Dr. Bobby Mitra, the best trigger to more product development lies in building long-term credibility. Success in building world-class products and technologies, and doing so consistently over time, will go a long way.
He said: “As much as successes, we also need to be humble in learning more from our failures and scars. We also need to increase our focus on building deep competencies in designing complex semiconductor solutions, increasingly with a systems and applications mindset.
“I believe that we also have a major opportunity ahead of us in the electronic product development space in India. By having electronic system designers, and semiconductor design and test engineers working collaboratively, we can support our OEMs in developing the right products that are competitive. By anchoring semiconductor product innovations on our customers, we can win together.”
I was recently chatting with a friend at LSI, who asked my opinion on the Indian semiconductor industry. Interestingly, in one of my groups on LinkedIn, a member has started a discussion on ‘whether it is ripe for India to get a silicon IC fab’!
Complete contrast — an industry friend recently narrated an incident where this friend was asked by someone else — whether the Indian chip industry was dead! Wow!! Someone’s got to be kidding!
First, I can’t really determine what’s the expectation level among people regarding India’s semiconductor industry. It seems that the interest is starting to build up, at a very slow pace.
However, folks need to understand that the semiconductor industry is extremely complex. You can’t get away by making some sort of statement about this industry! There is much more to semiconductors than someone merely writing a headline — “recovery is in sight” or “recession hits semicon” or 32nm is a great process node”!
Why aren’t more headlines like “overcoming ASIC design productivity roadblocks,” or “What lithography tools are doing for the photoresist market” doing the rounds? Or even: “Are designers as conscious of yield as they should be?” If you can spot the difference, you can make some comment on the semicon industry!
Two, the Indian chip industry CANNOT BE DEAD! It never was, never has been and never will be! Most people would find it tough to answer when Texas Instruments first started operations in India! Why did it choose to start so early? Simply because it backed India as a center! Naturally, the Indian semiconductor goes back that early!
Some folks perhaps relate more to the semiconductor industry with the advent of the India Semiconductor Association. The Association is an industry body, fulfilling its need. However, a lot of work has been going on in semiconductors before ISA came into being. I wonder whether folks have really cared to track this industry in India. I do remember when I first starting covering semiconductors in India, in the early 2000s, there were lot of curious glances from others!
Coming back to the Indian semiconductor industry, from ‘Made for India’, it has moved on to ‘Made In India’. Isn’t that a significant shift?
As for silicon IC wafer fabs in India, or for that matter, any fab in India — yes, it is still a good time to have one! Perhaps, the last time around, patience seemed to run out! And that’s a hard lesson to learn for those looking to invest in fabs — there is NO quick turnaround time in semiconductors!
Moshe Gavrielov, Xilinx’s President and CEO, recently said in EE Times that venture capital would not return to the semiconductor industry, even after this recession. If this does happen, it would be very unfair! Where would all the start-ups go?
Again, this statement brings clarity to the subject of semiconductors — this is a very complex industry, and definitely unlike IT/ITeS. We in India are so much into services that we fail to see the wood from the trees!
People love to compare China with India. Friends, do visit China or even Taiwan! Try to find out how they went about building their semiconductor industry, and manufacturing and R&D ecosystems. There are several lessons to learn, numerous role models to follow.
I strongly believe India can very well go the same route! We need some good startups in India as well. If and when those happen, please do not expect fast turnaround times. Please believe in India, and believe in its semiconductor industry. It needs your support.
This is a continuation of the previous post based on the recent India visit of Hanns Windele, VP Europe and India, Mentor Graphics, where he met key industry figures in a session organized by the India Semiconductor Association. Windele is standing sixth from left, and Poornima Shenoy, president, ISA is standing fifth from right.
Multimode, multicorner tools
Windele mentioned that in every likelihood, another new routing tool would be coming in once the industry enters the 45nm/32nm space. “There is an increasing static timing analysis signoff complexity. The explosive growth in complexity requires multimode and multicorner tools,” he said.
Multicorner and multimode (MCMM) and manufacturing variability will drive the next generation place and route technology. Even in the low-growth markets, technical discontinuities create opportunities for market share changes. For instance, 65nm brings along more than 21 corners/modes scenarios; while 90nm has 10 corners, and 130nm only has four corners.
Therefore, another place and route tool will cover the upcoming MCMM problem. Even in low-growth markets, technical discontinuities create opportunities for market share changes.
Companies cannot afford the growing cost of EDA. Even the cost of design is growing exponentially, especially, verification, as well as embedded software development costs. Even the EDA revenue has been a flat 2 percent of the IC revenue. However, productivity has been growing as the number of engineers don’t seem to be multiplying in a great way. For example, the transistors produced per electronic engineer has been hearly four-orders of magnitude since 1985.
Showing optimism in recession
Turning to the ongoing recession, which has impacted the semiconductor industry, Windele said that 2009 will be most likely turn out to be the worst recession in the history of the global semiconductor industry.
“It seems to be heading that way. There is also a lot of reason for optimism. I feel that 2009 will be a lot milder than 1985 and 2001,” he said. Even the electronics indsutry’s growth rates have been slowing, decade by decade as well.
Therefore, with this ongoing global recession, why should we remain optimistic? Simple! A crisis translates into opportunities!!
Betting on India
No prizes for guessing where the most opportunities lie — India! Significantly, the ‘middle class’ in urban India becoming a majority. There is likely to be $3 trillion of discretionary spending by 2010. “People who can afford electronic and consumer goods will be growing further,” he added.
Windele cited ISA’s figures, which says that India’s electronics consumption is headed toward $300 billion by 2015. India’s electronic equipment consumption will likely grow at a CAGR of 30 percent through 2015. It was around $28 billion in 2005, and is likely to increase to $127 billion by 2010, and to $363 billion by 2015.
Yet another reason is the growing number of new cell phone subscribers in China and India, which will be 2x larger than the total US subscribers until 2011. Asia is, by far, the most attractive market for new cell phone sales. India will grow fastest, he added.
Comparing the downturns of the recent years, Windele noted that 2008 and 2009 look different than the other downturns. “There is hardly any inventory left in the industry. One prediction is: as the price upswing comes, prices in the semicon industry will go up very quickly,” he noted.
Seeds already being sown for recovery in 2010. Already, the industry has experiecned two years of severe price declines in memory. Further, systems will be re-designed to take advantage of lower bit prices of FLASH and DRAM.
There will be consolidation and reduced investment in semiconductor capacity in 2008 and 2009. Ramp-up of new system designs will likely happen in 2010 during the period of reduced semiconductor supply.
Concluding, he added that Mentor Graphics became the number 1 EDA company in Europe as the company managed the crisis better than some of our competitors.