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Semicon industry must be prepared to face challenges in new era: Lip-Bu Tan

November 16, 2010

Day 1, CDNLive India 2010, kicked of with Lip-Bu Tan, president and CEO, Cadence Design Systems Inc. delivering the main keynote.

Lip-Bu Tan, president and CEO, Cadence Design Systems Inc.

Lip-Bu Tan, president and CEO, Cadence Design Systems Inc.

This is a new era of an application driven platforms and products that have very short time to market. The global semiconductor industry needs to be ready and prepared to face and take on the upcoming challenges.

Talking about the global economy in general, Tan said that there has been gradual GDP growth, and that the semiconductor growth has exceeded GDP growth this year.

Healthy semicon industry
Tan said: “There is cautious investment as well as government engagement. There have been seasonal adjustments in the industry. I see 5-7 percent growth over the next five years. It is a healthy semiconductor industry.”

There has also been some improvement in major capital investment, especially in China and India. The IPO market has also been encouraging, especially in semicon space.

He added that India, especially, is coming up very strong. The domestic market has been coming up quite strong as well. “I am excited about the whole of investment over the next five years.”

Tan advised that various national governments are realizing that the semiconductor is critical, and hence, it is now becoming a significant industry. “China realized that they import more semiconductors than oil. India will realize this fact sooner, rather than later. I am sure that India will also mark semiconductors as a key area.”

On globalization, he added that all companies were now moving toward globalization. Some major companies, such as TI, ST, etc., have experienced tremendous growth in Asia Pacific.

On organizational matters, Tan expressed excitement regarding the amount of innovation and IT education happening in India. “India has all the brains and innovation. Now, the challenge is how to come up with products and market them globally. Tejas is doing very well, so is Cosmic Circiuts. So is Ittiam Systems.” The capital efficiency structure is also gaining in importance.

According to him, the M&A activity is also gaining in importance. “Some of the major system companies are moving into semiconductors, such as Apple,” he observed. A similar pattern was also visible with Oracle. “So, the system guys are starting to move into silicon. The next five years will be exciting as there will be a sea change.

Key market drivers
Coming on to technical aspects of the global semicon industry, some major drivers include the explosion of applications, green technology, cloud computing, mobility, 3D, high definition.

Tan said: “Application development is becoming very important. Also, how do you drive low power across products is very significant. Cloud computing is another big area. VCs are investing in this area. Next, mobility is major. It is no more just about a phone.” On mobility, he further added that India had recently auctioned some wireless spectrum. There will be opportunities in that area.

Social media is changing the game. Video is yet another big piece. You have HD video. There has been lot of proliferation in video. Tan cited an instance where Cisco’s John Chambers had advised that in five years, 80 percent of the company’s traffic will be video. Tan added that 3D is also growing. Smart grid has emerged as a major driver in the Asia Pacific as well.

Global transformation all around us!
On the social front, there is a need for continuous connectivity, while crowd sourcing is significant. Significantly, global transformation has been happening right in front of us. All of these changes require innovation. There are several challenges before designers today. Some would be related to hardware and software design integration, or how can you use the IP? For instance, some chips are said to have 68 different IP blocks. How do you integrate them?

Next, there are SoCs and mixed signal — they are also becoming complex blocks. Some of Cadence’s customers are taping out 28nm chips. Some others are working on 20nm designs. All of these can be very complex and expensive.
Consequently, innovation continues to be extremely challenging, along with technological challenges. The time to market is becoming shorter and shorter as well. That’s a major challenge for all engineering leaders.

Jaswinder Ahuja, corporate VP and MD, Cadence Design Systems (I) Pvt Ltd.

Jaswinder Ahuja, corporate VP and MD, Cadence Design Systems (I) Pvt Ltd.

The industry is now witnessing application driven platforms. Also, there is a growing need for semicon companies to deliver application driven hardware and software platforms. The growth of mobile platforms serves as a good example of platforms and software.

Further, there is increasing collaboration with the ecosystem. Tan said: There are areas to focus on. “How can we collaborate more to serve our customers? Testing is going to be a very critical tool. That’s why we have come out with the EDA360 vision.” Cadence’s EDA360 comprises of system realization, SoC realization and silicon realization.

Earlier, welcoming the delegates, Jaswinder Ahuja, corporate VP and MD, Cadence Design Systems (I) Pvt Ltd, highlighted the technical tracks to be held during CDNLive India. He said: “We have over 140 abstracts submitted. After rigorous review, 45 papers have been selected to be presented across five different tracks.”

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