The semiconductor design industry in India is evolving fast. The top 10 fabless semiconductor companies and 19 of the top 25 semiconductor companies have operations in India. Many of the design houses in India are well past the 90nm node, and have already completed 65nm and 45nm tapeouts. Most of these companies are doing cutting edge design work for large MNCs that now have an R&D footprint here. Rather than simply implementing in India products designed elsewhere, several MNCs are now designing products here. Indian demand for electronics products is also growing, which is driving the design of semiconductors for the local market.
With several well-respected engineering universities located in India, there is a large talent pool. With that pool, combined with cost-competitive salaries and a proven service model, India provides a particularly good environment for semiconductor design. As a result, numerous R&D centers, semiconductor start-ups, design services firms, electronic design automation software companies as well as electronic manufacturing services firms are rapidly expanding here, and for good reason.
India’s design industry vs. other countriesIn addition to India, countries in the Asia-Pacific region such as Japan, Taiwan and China are expected to contribute to the semiconductor industry growth in the coming years. Each country has identified its key strengths in this space and is leveraging them to the fullest. Taiwan’s focus is on advanced IC manufacturing, while China banks on its low-cost manufacturing for relatively low-end products.
But India has already established itself as a design hub. India’s design industry has been benchmarked with China, Taiwan, Israel, Czech Republic, the United Kingdom, the United States, and Canada, using a set of relevant parameters. India has the second largest pool of engineers employed in the semiconductor design sector (approximately 75,000). It also has the second largest supply of new talent, with about 133,000 engineering degrees being awarded every year in disciplines relevant to this sector. In quality of talent, India has been rated fourth on this factor after the United States, the United Kingdom, and Israel. In legal and IPR protection issues, India has been rated higher than China, Taiwan, and the Czech Republic. The World Economic Forum-funded Global Competitiveness Report 2006-2007 ranks India after the UK, Canada, the US, Israel, and Taiwan. The Report (ISA-EYI Study 2007) studied a total of 125 countries, among which India is ranked thirty fourth. In maturity of the semiconductor design sector, India has been rated sixth among the countries in the survey, ahead of the Czech Republic and China.
MNCs are changing the way they do business in IndiaWith the rapid growth of the semiconductor design ecosystem in India and the challenges of the current economic downturn, many MNCs are changing the way they do business here. Take Magma Design Automation as an example.
In 2003, Magma opened its first office in Bangalore. The focus then was on supporting US-lead product development and providing customer support. Today, Magma has offices in three cities in India, the most of any EDA company, and over 25 percent of its worldwide employees is located here. Operations here include R&D, product engineering, field applications engineering and sales.
In the past, Magma had R&D team members for all its product lines located all over the world, which created some communications issues. Now the development of entire product lines is being driven out of India. Product development for the Quartz physical verification products, which provide true linear scalability for DRC and LVS functions, is based here.
Magma’s India operations have also played a key role in the company’s recent entry into the analog/mixed-signal market, a market in which Magma sees a great opportunity for growth. Relying on the strong local talent and relocating some technical leads to India, Magma completed development of Titan, which accelerates analog/mixed-signal design without sacrificing performance.
Driven to continually innovate, Magma has leveraged the engineering talent pool in India for years. Today, Magma is working to foster the growth of the talent pool in the country. Magma India is working with 32 universities, regional engineering colleges, IITs and more to facilitate VLSI design programs.
India: Moving beyond outsourcingThe increasing reliance of MNCs, such as Magma, on their Indian operations and the strengthening of the semiconductor design ecosystem here is proof that the country’s role has evolved from mere outsourcing to enabling technological innovations. With operating margins getting slimmer and more companies moving to a “fab-lite” mode, India’s semiconductor design industry is poised for growth. India has great design expertise, fabs should be emerging soon and more MNCs will build larger operations here.
With more high tech jobs, the Indian middle class will continue to grow and will help drive consumer demand for phones, TVs, games and other electronics. This demand will help fuel the next-generation of semiconductors. Localization of product design and manufacturing from India will drive significant investments to the semiconductor industry. New technologies such as cloud computing, virtualization and alternative energy will create new opportunities. As a result, India will soon take a leadership role in the global semiconductor industry.
Author InformationVivek Raghavan is Managing Director and Vice President (CDBU), Magma Design Automation India. He can be reached at
raghavan@magma-da.com.
