More ‘fabless IC billionaires’ in 2010, says IC Insights! Is India listening?

December 22, 2010

Brilliant! There’s no other word to describe the first part of this headline!

As per IC Insights’ forecast of 2010 billion-dollar fabless IC suppliers, excerpted from a ranking of top 50 fabless IC suppliers in its ‘ 2011 edition of The McClean Report’, as many as 13 fabless IC suppliers are tipped to cross the $1-billion mark in sales in 2010! As per IC Insights, this is a significant step up — from 10 companies in 2009 and eight in 2008.

Leading fabless IC suppliers. Source: IC Insight, USA.

Leading fabless IC suppliers. Source: IC Insight, USA.

Just sit back and admire this table. There are nine firms from the US — Qualcomm, Broadcom, AMD, Marvell, Nvidia, Xilinx, Altera, LSI and Avago, three from Taiwan — MediaTek, Novatek and MStar, while ST-Ericsson is Europe’s lone representation in this stellar list.

In this august club of IC billionaires, no surprises, but Qualcomm retains the top place for the third consecutive year. Broadcom moves up a place. AMD should become the world’s third largest player.

Broadcom at 53 percent, Marvell at 34 percent, Xilinx at 39 percent, Altera at 63 percent, Avago and Novatek at 40 percent each are top performers. However, MStar of Taiwan steals the show with an estimated 75 percent growth in 2010.

Qualcomm, Nvidia and LSI have performed well, especially  the last two – coming pff a difficult 2009. Taiwan’s MediaTek has seen the biggest slip — down to 3 percent in 2010 from 22 percent in 2009.

There is no representation from Japan in the fabless IC billionaires club. IC Insights has indicated that the fabless/foundry hasn’t caught on in Japan and is unlikely to do so in the near future. However, Taiwan and China based firms should sooner or later find their way into this club.

I will now come to India!


Where is India in all of this?

I am among those many ‘few’ who say India’s semiconductor industry is doing great. Yes, indeed, it is doing great — courtesy, the presence of the Indian arms of these fabless IC billionaires.

However, there is no Indian representation in this list of fabless IC billionaires! Will there ever be one? Only if the fabless model is seriously pursued! That is, if the powers that be think this to be of any importance at all!!

Some years ago, there was this debate of fabs vs. fabless in India! While discussions about ‘fabs’ are dead and buried, there are hardly any discussions regarding fabless. However, there are several talks about re-igniting the Indian electronics industry and adopting a “Made-in-India, Made-for-India” mantra.

Now, all of this makes great reading! Please ask these questions of yourself: who are the chip providers going to be for all of these great electronics products that will be built in India? Who all will provide the necessary IP and other building blocks? From where are the necessary components going to be sourced?

If most or all of these still continue to be provided by the MNCs, then who is benefitting in the end? Definitely not India and the Indian semiconductor industry! MNCs will continue to grow their markets in India, which is why they enter markets in the first place! So, where are the Indian companies? Where exactly is India in all of this?

All this talk about ESDM simply won’t help in the long run if it is not even helping develop, nurture and grow a robust local semiconductor industry.

The mantra of the Indian semicon industry should be ‘Made in India and Made for India by Indian companies’! Unless this happens, one wonders how will the local industry ever grow!

So, will these issues ever be addressed? Or, will others continue to point out — ‘Keep dreaming! There won’t ever be an Indian company in the global fabless iC suppliers list!’

The forthcoming ISA Vision Summit 2011 is a great opportunity to address these issues. Are you listening, ISA and the Indian semiconductor industry?

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  1. Shilpa
    December 23, 2010 at 10:43 am

    Hey,

    Read your article. Interesting, as always. Can you not write something on CSP? I know its not your focus area. But it holds a great promise of future. Many serious players. Why not, huh?

    • December 23, 2010 at 10:27 pm

      CSP? Certainly! Do let me know what exactly do you have in mind! 😉

  2. Hillol Sarkar
    December 23, 2010 at 10:13 pm

    Pradeep, last post was good. You can see from the analysis that it is not possible to create a chip company in India and make reasonable money. As you know without system experience it will be difficult to make a business case.

    • December 23, 2010 at 10:28 pm

      Yes sir, agree! It is time that the local Indian semicon companies were offered help!

  3. Dr. MP Divakar
    December 28, 2010 at 8:40 pm

    Pradeep, you probably saw my comment at EE Times (the table was also shown), where I make a simple point: money is where ever innovation happens:

    http://www.eetimes.com/electronics-news/4211659/13–fabless–chip-firms-to-top–1B-in-sales?cid=NL_EETimesDaily

    If a large majority of the so called ‘fabless’ Indian companies are doing a service (which seems to be the case), they will get paid for their service, not for the products. Compare this to the play book adopted by the Chinese on the Silicon fabs. For much reduced labour cost, they got the fab technology in return and today the whole world’s chip needs (pretty much) are served by fabs in China; they did not adopt the ‘service’ models. They did not just want to be a low-cost manuf center providing a service, they want to own significant portions of the value chain. They are well on their way to catchup with India on design services.

    So the question you pose is a deep one and I have to partially agree with my learned colleague Hillol here; without system-level experience, it is difficult to advance to a ‘products’ company. How ever, I disagree with his assertion that it is not possible to create a chip company in India (& we are not talking about the next generation technology-based companies, which, India has already missed by oceans now!). The product innovations to come in fabless companies will be largely based on existing and older (hence cheaper) technologies to serve ubiquitous needs which tend to be higher volume based. We will perhaps some of these taking shape in 2011, given what I know from my involvement with GSA & SEMI standardization efforts.

    Other countries don’t seem to be faring a whole lot better either, in the above table. So have you looked into reasons as to why they haven’t fared any better than India?

    By the way, what the heck is CSP (cited by Shilpa above)? It would help if people bother to expand the abbreviations (as a backend specialist, CSP always meant Chipscale Package to me!).

    Best wishes for 2011.

    Dr. MP Divakar

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