ISA, UKTI sign MoU – to build complementary semicon capabilities

The India Semiconductor Association (ISA) and the UKTI today signed a historic memorandum of understanding (MoU) at the residence of Sir Richard Stagg, British High Commissioner in New Delhi, India

The MoU was signed between B.V. Naidu, chairman, ISA and Jane Owen, director UKTI.

In attendance were the board members of the ISA, senior executives from the Indian semiconductor industry and officials from the UKTI ICT sector.Source: ISA

Sir Richard Stagg touched upon the long history and tradition of India-UK trade with rich social and cultural bonds, which has continued strongly with new generations of industries as the global economy has reshaped, in so small part through technology.

He said: “IT, and semiconductors, in particular, has played a key role in determining how international trade happens. It has already done much, and has the potential to do much more.

“The next phase as far as India and the UK are concerned will undoubtedly be about more collaborative efforts, building on deep strengths of each country’s semiconductor industry.”

Sir Stagg expressed his happiness that the ISA had chosen the UK as one of its three key country partners. He was especially pleased to see such enthusiastic commitment to the UKTI’s India ICT GVC (Global Value Chain) program.

The UKTI’s GVC program is a unique initiative, which matches Indian businesses with the best UK technology firms to seize new business opportunities together.

Jane Owen added, “Through the GVC program, we want to build on the complementary capabilities of our two industries to develop and implement new solutions around the big issues today and tomorrow.”

Poornima Shenoy, president, ISA, highlighted the fact that there can be areas, as well as geographic areas that can be of interest to India. The data being provided by the UKTI has also helped the Association to do enhance this aspect. “You (UKTI), have the opportunity to be the first mover,” she said.

She added: “The focus on the three verticals -- healthcare, energy and automotive from both sides is of relevance. This will bring about focus to interactions and help drive business by the respective verticals.”

B.V. Naidu, chairman, ISA, said that the UKTI is top priority for the ISA. He added: “We are really on a growth path. This year, the government of India has also set up a task force – for the India Semiconductor Vision 2020 Document. A lot of innovation and co-operation is being driven by the government of India. Companies in the UK and India can tap this opportunity in a major way.”

Full report follows later.

ISA lauds positive signals of Union Budget

BANGALORE, INDIA: The India Semiconductor Association (ISA) today applauded the government’s step in extending the STPI tax holiday for technology export firms from March 2010 to March 2011. It would be of special relevance to SMEs.

Addressing the issues of transfer pricing and removal of fringe benefit tax were the other positive steps. These steps would attract talent to the knowledge sector and improve the competitiveness of India.

Weighted deduction of 150 percent on in-house R&D expenditure available to all manufacturing businesses will provide a boost to domestic R&D efforts and is a welcome move. Upgradation of polytechnics could create employment opportunities in the manufacturing sector with a pool of qualified and trained talent.

Basic customs duty of 5 percent applicable on import of set-top boxes is an incentive for domestic manufacturing. Reduction of custom duty on LCD panels and exemption of CVD on parts for mobile manufacturing will also help the manufacturing industry.

Commenting on the budget, ISA Chairman B.V. Naidu, Group CEO Vanpic Projects said, "These are positive developments and a signal that the government is committed to the growth of the sector and addressing its issues in this tough economic environment."

Global semi to dip by 28pc in 2009; Indian semi to grow at 13.4pc by 2010! Don't get carried away!!

Contrasting numbers, isn't it!

Let's start! Yesterday, Malcolm Penn, CEO and founder of Future Horizons, said at the International Forecast Seminar (IFS) in London that the global semiconductor market will fall by 28 percent in value and by 26 percent in unit shipments in 2009 after the unprecedented collapse of Q4 2008.

Penn has added that Q2 2009 will be the bottom of the dip, with a 15 percent increase forecast for 2010 and 28 percent in 2011.

This afternoon, the India Semiconductor Association (ISA) released the ISA-Frost & Sullivan report update 2008-10", the third report on the subject and the second update, which stated that the total revenues of the Indian semiconductor market are likely to grow from $5.9 billion in 2008 to $7.59 billion in 2010 at a CAGR of 13.4 percent. The total available market (TAM) revenues are anticipated to climb from $2.53 billion in 2008 to $3.24 billion in 2010 with a CAGR of 13.1 percent.

Be aware that these numbers do not include India's strength in embedded and design services. This will be covered in a separate report. Nor do these numbers include any potential growth for India in the solar photovoltaics space, which also has its separate report.

Now, these ISA numbers should make anybody wonder: the Indian semiconductor industry is in for a boom time! Far from it!! India's contribution to the global semiconductor industry is still quite small for it to really make an impact.

Some other points to note!

First, according to the ISA-F&S update, the decline in CAGR, from 26.7 percent, in the earlier report of 2007, to 13.4 percent, in the current report, is on account of revised investment and manufacturing scenario seen in the second half of 2008.

Also, as Ms Poornima Shenoy, president, ISA, indicated: "India is a story of growth and this is important in such times though growth may be below past projections. The current slowdown will impact manufacturing investment prospects. A low manufacturing index for electronic products leads to higher imports and thus lowers the local potential for semiconductors, their key component."

Next, India's electronics industry manufacturing index of just 0.39 forecast for 2010 will result in an opportunity loss of $4.35 billion for semiconductor sales in India.

I haven't seen many new start-ups and Indian product companies. While IT/office automation (IT/OA), wireless handsets and communications segments are going to define the semiconductor market growth, it remains to be seen how much of these come out from Indian, home grown companies. Perhaps, Indian entrepreneurs are averse to risk taking in semiconductors. We also have India's wafer IC fab story, which didn't really take off as expected.

It would be advised not to overlook these points and rejoice in the numbers for the Indian semiconductor industry. We still have many, many miles to go!

I would personally be much more pleased, and am sure, most of you will agree, if all of these numbers for the Indian semiconductor industry came more from the Indian based companies, rather than the Indian arms of multinationals. Besides, I am still waiting to see what sort of steps are being taken to incubate such companies.

I will be writing more about the global and Indian scenarios in depth, especially, the Indian scenario, in separate posts.

Seeking jobs in embedded! Can anyone help?

Ever since I have blogged about embedded companies in India, I've received a few messages, regarding jobs in the embedded segment in India. Some others have dropped hints about companies who haven't made my list!

It seems the companies are not hiring, or they've put hiring on freeze. Does it mean that not many projects are going on currently? Or, is there a way for freshers to make a start somewhere? For starters, those who want their companies listed in any top 10 list, are they even trying to help freshers or those looking for better jobs in the embedded space? What is their policy for hiring?

Or, are they too dependent on design services, so much that they do not have enough products to work on or develop! Or, maybe, they don't have many ongoing projects? I have had so many people tell me "India should do product development in semiconductors!" So, is that really happening? Or, is it merely a statement?

I did come across this web site called Dev Seeker, which is said to list jobs in embedded. DevSeeker also has a page that lists some of the embedded companies in India.

I also came across a blog on Monster, which lists several posts from some freshers, as well as some others who have actually asked folks to send in their resumes.

There is another web site from KBS Consultants, which has listed some jobs in the embedded segment. Another site, called GotAChance, also has links to jobs in the embedded space. Another search led me to a site called ITJobs.

By the way, I've no way of knowing whether any of the sites are updated, or, if they are, how frequently are those getting updated with the latest information. Sincerely hope that all of these sites are getting updated frequently!

Whenever I speak with semiconductor professionals, they don't stop raving about India's might in embedded. If that's the case, why are so many talented people not being able to find jobs? Or even worse, how do freshers get to make a start? I am not sure if companies offer freelance work for embedded software engineers. However, it is an option that could be considered.

There are several companies in China and Japan who are seeking fresh and good talent in the embedded space. A Japanese delegation visited India last August for the India-Fukuoka (Japan) IT, Embedded Software and Semiconductor Business Workshop 2008. Some of companies are:

* Daichi Institution Industry Co. Ltd
* DISCO (Dai Ichi Seitosho Co. Ltd) Corp.
* Inoueki Co. Ltd
* JETRO (Japan External Trade Organization)
* Kyushu Economic Research Center
* CLAIR (The Japan Council of Local Authorities for International Relations), Singapore

Prior to that, last May, the India Semiconductor Association (ISA) and the UK Trade & Investment and Science & Innovation Network launched a study titled "Scope for collaboration between India and the UK in semiconductor driven industry 2008.

I am also aware that China and Taiwan require lot of talent in embedded software and systems. They can surely make use of the talent available in India.

I am sure that all of these folks would be able to help out at least some of those looking to make a career in embedded systems and software. Otherwise, what's the end result of making such trips to India and talking about India's talent in embedded! Freshers need to make a start somewhere, so please help as many as possible.

To all of those freshers starting out to make a career, try and get the relevant experience, and the money will follow. Do not pursue it the other way round.

This is a request to the global embedded systems and software fraternity -- there are quite a lot of talented and fresh engineers in India in the embedded systems and software segment, who are also seeking jobs. Give them, or at least, some of them, a chance! Can you kindly help them?

Why solar/PV is good for India? An ISA perspective!

Recently, the India Semiconductor Association (ISA) held an educative briefing session on the potential of the solar PV market in India, which was conducted by Rajiv Jain, Director, Government Relations, ISA.

This meeting was held well before iSuppli issued a warning that there could be global solar sunburn in 2009! I am sincerely hoping that most of the points mentioned by ISA's Jain still hold good in the coming year, and that India really does well and takes off in solar photovoltaics.

The ISA's vision: To help make India an attractive global destination for PV manufacturing and a world leader in solar energy.

Starting with the basics of photovoltaics, he said that it is a package of solar cells used to convert energy from sun to electricity. In simpler words, photons from sunlight knock electrons into higher state of energy, thus creating electricity. The electricity can be used to power equipment or recharge a battery. A typical PV system mainly consists of a PV module, battery, inverter, controller and junction box.

Focusing on the technological landscape, he touched upon the two key technologies for solar: crystalline and thin film.

Crystalline silicon is said to be the most mature Si wafer technology, with the largest market share. Though, high on cost, it has a typical efficieny of 14-18 percent. Crystalline silicon is said to suitable for rooftop applications.

Thin film is nothing but thin layers of photosensitive materials on glass. It is currently on high growth due to silicon shortage, and very low on cost due to low material consumption. The efficiency is about 6.5-8 percent.

A third technology, nanotechnology, is the future technology for cost reduction. It is more in the R&D space as of now.

Present scenario for solar
So what's the present scenario? In 2007, of $71 billion invested in new renewable energy (RE) capacity globally, 30 percent was in solar PV. It is the fastest growing area in the energy sector, with a CAGR of 47 percent over the last five years.

Grid-connected solar PV has been high growth market segment in 2007 (50 percent increase). Also, 86 percent of the PV installations are largely in four countries, with Germany at 47 percent being the outright leader.

Market drivers are said to be attractive feed-in tariffs, national PV market development and acceptance, RE obligations through solar PV, access to cheaper mode of finance, manufacturing incentives as well as strong R&D.

Why solar for India
I have addressed this in an earlier blog post. Here's what Jain had to say, and it is mostly in line with the earlier discussions.

First, India has among the highest solar irradiance globally. It also has the best quality reserves of silica in Orissa and Andhra Pradesh. India has also established itself low cost producer and assembler of solar PV cells and modules.

The major challenges include attaining scale and integration for cost reduction, and, R&D for development of the industry.

Solar insolation in India
To start with, the daily average solar energy incident varies from 4-7kWh per m2. Next, we have multiple sites with solar irradiation >2000 hours per year. In contrast, Germany has 900-1,200 hours per year. Further, most parts of India have 300-300 sunny days in a year translating into a potential of 600GW. Also, potential in some states like Rajasthan is 35-40 MW per m2.

It is well known that the Indian semiconductor policy of 2007 has triggered off the now well publicized efforts in solar initiatives. The government of India has received 16 applications with investments envisaged at app Rs. 1,55,000 crores.

The investments in solar PV manufacturing exceed Rs 1,25,000 crores. Generation based incentives (GBI) are going to be key.

Potential market segments in India
There are quite a few, actually. In rural electrification, the government of India's target is to achieve 'Electricity for all by 2012'. About 18,000 remote villages will likely be electrified through RE. About ~25 percent of the remote villages, i.e., 4,500 villages, form a very viable market.

Next comes telecom back-up power! PV is a cost effective alternative to diesel generators (DG) for back up power for shorter duration, as DG based systems suffer from several disadvantages.

Another key market could be grid connected solar PV based generation. Current tariffs do not provide attractive IRR to developers. Decreasing system prices are however, likely to improve the economics.

Finally, roof based BIPV is said to be an alternative to reduce the cost of power procured by commercial buildings.

ISA's recommendations
The ISA has also made salient recommendations via its report on the industry. These include areas such as manufacturing: with an aim to encourage companies investing in 'Scale and integration', provision of capital subsidy to larger number of units, availability of funds at a cheaper rate, and an emphasis on R&D.

Also, the ISA has recommended that GBI be given for a tenure of 20 years, with the present period being 10 years. Further, it has suggested an accelerated depreciation along with the GBI scheme, and the availability of GBI for an unlimited capacity for a period of five years. The ISA has recommended an enactment of the RE Law requiring utilities to progressively increase power purchase from RE.

On its part, the ISA has been working with the government of India and various state governments as well. It has a sound rapport with concerned ministries - MNRE, DIT and NMCC.

The ISA has also assisted in the technical evaluation of solar PV proposals received in Fab City, Hyderabad. It has also drafted a semiconductor policy for the government of Karnataka, which should be out early next year, hopefully. The ISA is also working with several other state governments to promote the industry in their states.

The second ISA Solar PV Conclave is scheduled for November 2009 at Hyderabad.

Very good intentions, all of these! Now, for the Indian industry and the government to deliver, and walk hand in hand!!

Solar/PV is just right for India

There have been significant investments in the solar/photovoltaic space in India in the recent past, and that does not look like ending any time soon.

Given the ongoing global financial crisis, and the state of the global semiconductor industry, it appears that India has bet quite successfully on the solar/PV segment. In fact, it seems that solar/PV is just right for India! In fact, it may just kick off the kind manufacturing activity India really needs.

Poornima Shenoy, president, India Semiconductor Association (ISA), says that solar/PV is right for India for a variety of reasons.

Firstly, India has among the highest solar irradiance, globally. Secondly, it is established as a low-cost producer and assembler of solar PV cells and modules. And thirdly, India has among the best quality reserves of silica in the states of Orissa and Andhra Pradesh.

She adds: "At present, solar PV may not seem to be an attractive option, primarily due to high generation costs. However, in the coming years, with increases in fossil fuel prices, rising environmental concerns, and a reduction in the cost of solar PV technology, it is likely to become a major source of energy."

The ISA expects 2015 to be an important year for the solar/PV industry. Around this time, the product cost of the Indian solar PV industry is likely to match the semi grid parity (peak power) globally, and also to match the grid parity within India.

The four major segments offering maximum potential in the coming years for solar PV in India are: rural electrification -- decentralized distributed generation (DDG); grid interactive solar PV power plants; backup power for telecom (base transceiver stations); and roof-based solar PV systems.

ISA-NMCC report on solar/PV
The ISA recently released a report on the solar PV market in New Delhi with NMCC (National Manufacturing Competitiveness Council).

According to the ISA-NMCC study, of the US$71 billion invested in new, renewable energy capacity globally in 2007, 30 percent of was in solar PV. Solar PV is the fastest growing area in the energy sector, with a CAGR of 47 percent over the last five years. The grid-connected solar PV segment saw 50 percent growth in 2007.

As per the report, the solar PV industry is likely to grow four-fold by 2011. However, there are various uncertainties in the short- to medium-term on both the supply and the demand side.

On the supply side, the main constraint is the lack of available polysilicon. The demand side is limited by the quantum of incentives for solar PV.

Gradually, there will likely be improvements in technology. The decreasing cost of manufacturing could drive the preferential tariffs lower, and ongoing demand for PV products could also attract significant investment.

As for the global solar PV supply chain. Thin-film production is one of the fastest growing segments in solar. The lack of available polysilicon is limiting growth, and this has led to the emergence of thin-film technology. This technology has enjoyed substantial growth since 2005: 80 percent in 2006 and over 100 percent in 2007.

BV Naidu quits SemIndia; what now of Indian fab story?

There's this report on DNA Money about BV Naidu, managing director of SemIndia Systems Pvt Ltd and SemIndia Fab Pvt Ltd having quit his job! This immediately begs the question: What now of the Indian fab story? Or, has it sunk without a trace?

There have been several questions raised in the past, as well as in the recent past, such as:

1. Is India's fab story going astray?
2. Why have fabs in India in the first place?
3. Can an Indian based fab take on the might of established global fabs? How will it be profitable in this climate?
4. What can an Indian fab produce unique, that other fabs cannot?
5. What has the Indian semicon policy achieved, when the Indian semicon industry was doing well, prior to the announcement of the policy?
6. What does India bring to the semicon world?
7. Why move to solar, when there's been no action of note for wafer IC fabs?
8. Why convert the Fabcity in Hyderabad, to Solarcity?
9. Solar/PV isn't exactly semiconductors, so why this hype about solar fabs? Is this being done to hide the lack of any success in semiconductor fabs?

Right! I am not here to provide the answers to such questions, nor am I qualified enough to address these! These are questions, if they are justifiable questions, to be answered by the industry! Rather, I will try and analyze what India has done and can do in semiconductors!

May I add here that according to the India Semiconductor Association, BV Naidu remains an active member of the Executive Council. BV Naidu himself informed me that he will be continuing at the board level at SemIndia, moving away from executive responsibilities. And, he will be continuing at the ISA. So that's good news!

Now back to the discussion!

First, yes, before and post the Indian semiconductor policy, India continues to do very well in semiconductors. Nearly every single MNC has its presence here; and no one that I know, has said that it has no plans to expand in India! Two, we have been traditionally very strong in design services and continue to remain so! Three, India is the emerging (or already emerged) embedded superstar!

Having a wafer IC fab isn't such a big deal, is it? So many folks have already moved on to fab-lite anyway! Yes, having one wafer IC fab would surely prop up India's image in the global semicon market, but well, not having one, won't sully India's image either!

If we do not get a fab, then let's just all accept that India was not ready for one, and let's move on! Life in semiconductors is much more than wafer fabs, as India's brilliant design services companies keep proving day in and day out!

I've said before in one of my blogs that doing product development is probably not India's strength! Design services surely is! Let's focus on our strength!

Will the moving out of BV Naidu from SemIndia effect the Indian industry? Why should it? Actually, far from it! Some companies in IP and other embedded areas are doing very well anyway. Let's give such companies their due credit! They've been present, much before the India Semiconductor Association was formed, or way long before the Indian semicon policy was born!

I interact regularly with the length and breadth of the Indian semiconductor industry. I've been covering this industry much before the India Semiconductor Association was even formed! If I remember correctly, I was among the three journalists present on the day the ISA was actually launched! Coming back to my point, I've yet to come across one person from the industry who does not understand the dynamics of this industry!

If a fab does not happen or someone leaves a company, that does not mean that there's been a failure. Maybe, it was a wrong choice to start off with! Perhaps, it just coincided with the turbulent global semiconductor industry. Or, simply, semiconductor was mistaken to be a commodity, which it is not!

India has had several investments in solar. Two days from now, there'll be a major solar/PV conference in New Delhi. Solar is within the ecosystem units of the Indian semicon policy, and it has attracted major investments. Yes, solar has to do with energy security, and in that regard, India could well be on the right path. However, that's just one small part of the complete story of the semicon policy!

As to whether India should focus on semicon OR solar, I am not the right person to comment or judge! Nor am I qualified enough to comment on 'why convert Fabcity to Solarcity'. Maybe, solar is being hyped in India right now. If yes, like any other industry, once it matures, the solar bubble will burst and consolidation will happen.

There are several other ecosystem unit definitions in the semicon policy. Some may and will happen. For those who are not aware, the "ecosystem units" have been clearly defined as units, other than a fab unit, for manufacture of semiconductors, displays including LCDs, OLEDs, PDPs, any other emerging displays; storage devices; solar cells; photovoltaics; other advanced micro and nanotechnology products; and assembly and test of all products.

The Indian semiconductor industry, as I see it, remains strong as before, fabs or no fabs! I don't equate solar with semiconductors, and maybe I am wrong here, but I do believe the two should be treated separately. Not a single solar company will probably feature in India's top 10 semiconductor companies! At least, not in my list! And, if a top executive leaves a company, why should it hamper the overall industry?

Frankly, it is the Ittiams, the MindTrees, the Cosmic Circuits', the eInfochips, and the SoftJins who continue to remain India's pride, even though they may be quite small in comparison to the global giants! At least, they have done India proud in their own way! Doesn't matter if these companies do not make great media copy! These are among the Indian semiconductor companies that continue to matter!

The India semiconductor story is something like this: Lots of high-end designs are being done here. In fact, lot of key decisions are now being made out of India. The talent pool is very much intact and growing! We are leaders in design services and embedded, make no mistake.

Now, does all of this indicate a recession or depression in the Indian semiconductor industry? Or, is it an indication of India's growing success -- fabs or no fabs? You decide!

Bangalore not cowed down by serial blasts, ISA Excite a success

Friends, I am really pained to report that Bangalore has been rocked by eight-nine serial blasts of low intensity today! As per the TV channels, there have been two deaths and several people injured. This is extremely unfortunate!

Countrymen and women, please join me in condemning this dastardly act of the serial blasts in Bangalore today.

I would also like to add a message sent to me by a good friend, Xavier, which says: Bangalore, don't be cowed down!

This is a small gesture that goes out to send the right signal to those who are keen to take away our freedom, our right to live peacefully for whatever their ideology is!

"Let our thoughts and prayers be with the near and dear ones of those killed and injured in these blasts."

Those who indulge in such activities are cowards. While such acts are meant to create panic, Bangalore has stood firm! Yes, people across the city, in various offices and other establishments, left home early, more so as a precautionary measure, telephone lines were jammed for some time, and there were the usual traffic jams -- largely due to the rains. However, there has been little panic. Yes, there may have been panic in the affected areas for some hours post the blasts.

In fact, I wasn't even aware of the blasts as I was attending a wonderful event on semiconductors -- the ISA Excite -- with a colleague, Ravinder, at Leela Palace. We only learned of the blasts on reaching office! Interestingly, there were little signs of panic on the roads as we were driving back to the office! Well, I've had quite a few phone calls and messages, thereafter! Am sure, it's been the same for nearly everyone in the city.

The country has gone on high alert since the blasts, as these can actually happen anywhere! However, India is a strong country, made up of very strong-minded people. Such acts of cowardice will not stop the normal pace of life. At best, normal life could be disrupted for a few hours.

Of course, a lot needs to be done to secure the IT capital of India, and possibly the world. It is hoped that the security agencies in India would do everything within their capability to ensure that such acts are not repeated. The damage could have been far greater, and some even wonder, whether there is some sort of a hidden message behind today's serial blasts.

Going back to the ISA Excite event, organized by the India Semiconductor Association, it was really heartening to learn that the Karnataka state will soon have its own semiconductor policy. I will be blogging more on this later tonight or tomorrow.

I'd also like to mention that the ISA Excite event was a very strong indication that the Indian semiconductor industry is very healthy and doing well, although, we may not yet have a wafer IC fab, and there are infrastructure challenges to mount.

Nearly everyone from the Indian semiconductor fraternity was present at the show. I am sure, several people heard about the blasts, and expressed their disgust at the happenings. However, the show went on! When the going gets tough, the tough get going. It was a message from the Indian semiconductor industry that even in tough times, it will move forward.

The show must always go on! And successfully!

India leads world in semicon: S. Janakiraman

Irrespective of the debate raging within the semicon community regarding the IC wafer fabs in India, the strength of and the talent within the Indian semiconductor industry has never ever been in doubt.

Delivering the welcome note at the recently held ISA Technovation 2008 awards ceremony at the Indian Institute of Science, S. Janakiraman, the former Chairman - India Semiconductor Association, and President & CEO – R&D services, MindTree Ltd, elaborated the fact that India now leads the world through execution of most complex and latest technology designs.

Former president of India, Dr. APJ Abdul Kalam was the Chief Guest at the function.

Commenting on the ISA's role, Janakiraman said that it has been an industry driven body focused on the unique needs and progress of the semiconductor and related industries in India to make it vibrant and project India as a global leader. The ISA's journey began four years back, in late October 2004, in Bangalore, under the mentorship of Dr. Sridhar Mitta, when like minded industry leaders gathered together and debated how India can achieve leadership position in the semiconductor space similar to IT and software.

Janakiraman said: "We have come a long way since then and today ISA is recognized by everyone in the country and all such bodies outside, as the sole representation of the Indian semiconductor industry. This has been a significant achievement and made possible by all."

Today, there is a good presence of both Indian and MNC organizations, large as well as start-up companies, design, as well as manufacturing organizations, with the members of ISA now totaling 130! The ISA also works closely with central and state governments to give shape to the aspiration of our industry. It had played a key role in framing the semiconductor policy that enables larger investments in the semiconductor manufacturing ecosystem.

He added: "India has excelled in areas that are knowledge intensive. Semiconductor design is no exception, and today, we lead the world through execution of most complex and latest technology designs. The market size of the IC design and embedded software industry in India was $6 billion in 2007 and has the potential to grow into $43 billion by 2015. It currently employs around 130,000 engineering professionals."

ISA Technovation Awards
One of the primary charters of the ISA is the talent initiative. This initiative focuses not only on generation of quality talent aligned to the needs of the industry, but also to recognize innovation and research, that further nurtures talent.

The Technovation Awards were created in 2007 to recognize excellence in Academia that has made us what we are today. These awards have been created to honour semiconductor research in India and to create role models in core technology areas.

The award categories are:
1. TechnoVisionary for life time achievement in the semiconductor area
2. TechnoShield for research entity, lab or a department for excellence in a semiconductor domain of interest
3. TechnoMentor for recognizing academician/researcher for contribution in the semiconductor area
4. TechnoInventor for individual excellence in doctoral/masters researchers

This year, ISA has created two special awards for recognizing researchers from Karnataka which have been instituted by VLSI 2007 committee, under two categories:

1. Best Faculty award
2. Best PG student award

The number of nominations went up multifold in this year and an able set of panelists had a tough task of selecting the award winners.

"Given the vibrant scenario of the industry and importance of the event, we have our great leader and visionary Dr. Abdul Kalam with us today evening to recognize the award winners in person'" added Janakiraman.

"Dr. Kalam had been a role model especially for the younger generation – who are the future of this country. Dr. Kalam has been a visionary and a great inspiration for the community present here. It is a great honour for ISA to have Dr. Kalam amongst us."

The Award Winners @ Technovation 2008

Technovisionary

Juzer M. Vasi, Deputy Director, Indian Institute of Technology, IIT Bombay

TechnoMentor

Bhargab B. Bhattacharya, Professor and Officiating Deputy Director, ISI Calcutta

TechnoShield 2008 (Rolling Shield)

Indian Institute of Technology, Madras -- Semiconductor Devices Circuits & Systems Group (SDCS)

TechnoInventors

(Ph. D category)

Debdeep Mukhopadhyay, Indian Institute of Technology, Kharagpur
Thesis : Design and Analysis of Cellular Automata Based Cryptographic Algorithms

BP Harish, Indian Institute of Science, Bangalore
Thesis: Process Variability –aware Performance Modeling in 65 nm CMOS

D. Mahaveer Sathaiya, Indian Institute of Technology, Madras
Thesis: Modeling of Gate Leakage in Aigan/Gan hemts and nitride oxides

(M Tech category)

Rakesh Gnana David J, Indian Institute of Science, Bangalore
Thesis: Adaptive Keeper Design for Dynamic Logic Circuits Using Rate Sensing Technique

Nayan Bhogilal Patel, Indian Institute of Science, Bangalore
Thesis: Performance Enhancement of the Tunnel Field Effect Transistor for Future Low Stand-by Power Applications

Former president of India, Dr. APJ Abdul Kalam, Chief Guest at the function, advised the Indian semiconductor industry to develop tailor-made chips so that electronic equipment could become more cheaper and competitive.

India fab story not disappearing: SemIndia

According to B.V. Naidu, managing director, SemIndia Systems, and Vice Chairman - India Semiconductor Association (ISA), the Indian fab story is well on track. Here, he speaks about the FabCity, the status of fabs in India and SemIndia's initiatives.

On the status of setting up of IC wafer fabs in India, he says that a couple of companies are in the process of raising the money for setting up the wafer fab in India. We still do not know the timelines for the same.

On India's fab story is disappearing, Naidu feels that it is always difficult to raise the money for such large capital-intensive projects, which are happening first time in the country. "One of the large industrial groups also announced their plans to set-up the fab. This shows that the fab story is not disappearing," he says.

The Andhra state government had recently sent notices to SemIndia and NanoTech over FabCity. Pertaining to the status of the project, he adds that any capital-intensive new projects of this kind will take some time. It is also quite natural that the government generally issues such notices more to put pressure so as to expedite the project implementation. It is good that the governments are closely monitoring the progress of the project implementation.

According to him, SemIndia's ATMP project construction has started. The FabCity has already come-up and many solar PV fabs are being set-up in the FabCity. This shows that efforts of SemIndia, ISA and the government of AP have yielded the successful results to make FabCity a successful project.

The India Semiconductor Association (ISA) can only indicate that such government communications are common for wherever there is government support. The ISA will continuously put in their efforts for attracting the new investments to India and work along with the governments to make sure that their efforts are fruitful.

"SemIndia's ATMP project construction has started and we are still looking for the investors for their fab project," says Naidu.

So, what sort of planning is now required from the Indian semicon industry? As per the SemIndia managing director, the Indian semicon industry should continuously work with the government to make sure that the government of India's semicon policy is successful and efforts are various state governments in attracting the new investments in this area are fruitful.

The ISA will continuously strive for creating the balanced eco-system for the semicon design industry, high-tech manufacturing and talent nurturing.

India's growing might in global semicon

It is no longer a secret that India is fast becoming the world’s destination, and increasingly the source too, for semiconductors. India also shows the most rapid growth potential among the BRIC countries.

Speaking at the recently held International Electronics Forum (IEF) 2008 at Dubai, organized by Future Horizons, S.Janakiraman, the outgoing Chairman - India Semiconductor Association, and President & CEO – R&D services, MindTree Ltd, touched upon India's growing might as a being the third largest country in terms of purchasing power parity, as well as its growing presence in the global semiconductor industry.

It is no surprise that the current market drivers in India happen to be mobile phone services, IT services/BPO, automobiles and IT hardware. Add to these are the facts that India is very strong in design tools, system architecture and VLSI design, has quite strong IP protection laws, and is quite strong in concept/innovation as far as the semiconductor industry is concerned.

Testing and packaging are in the nascent stage. While India lacks a semicon wafer fab, as of now, there have been several announcements regarding solar fabs by leading firms such as Videocon, Moser Baer, Reliance, etc.

In the electronics manufacturing domain, India's strength lies in hardware, embedded software and industrial design, OEMs, component distribution (includes semiconductor and box build), and end user/distribution channel, as well as more than moderate strength in product design and manufacturing (ODM, EMS).

India is likely to witness $363 billion of equipment consumption and $155 billion of domestic production by 2015. India’s electronic equipment consumption in 2005 was 1.8 percent. It is likely to grow to 5.5 percent in 2010 and 11 percent in 2015, as per a joint study conducted by the ISA and Frost & Sullivan.

The Indian semiconductor TAM (total available market) revenue is likely to grow by 2.5 times while the TM (total market) is likely to double revenues in 2009. The TAM is likely to grow at a CAGR of 35.8 percent and the TM is likely to grow at a CAGR of 26.7 percent, respectively, during the period 2006-09.

Telecom, and IT and office automation are currently the leading segments in both TM and TAM. Consumer segment occupies the third fastest growing area in the TM, while the industrial segment is the third fastest growing area in the TAM.

The major semiconductor categories include microprocessors, analog, memory, discrete and ASIC, while the major end use products include mobile handsets, BTS, desktops, notebooks, set-top boxes and CRT TVs.

Emerging base of EMS firms
India is also becoming an emerging base of EMS companies, thereby completing the electronics ecosystem. Five of the top 15 EMS companies globally have set up their manufacturing facilities in India. These include Celestica, Elcoteq, Flextronics, Jabil Circuit and Solectron. Two other large companies are in the process of setting up plants -- Hon Hai Precision Industry and Sanmina-SCI.

Nokia has set up its manufacturing facility as well. It has invested $210 million in the plant since January 2006. The India plant has set another benchmark of achieving the fastest ramp up across all Nokia facilities worldwide. Currently, approximately 50 percent of the production from the plant is consumed domestically and the rest is exported to other countries.

Indian embedded design industry
The Indian embedded design industry has been going from strength to strength. The recent IDC-ISA report puts revenues from India's VLSI, board design and embedded software industry to grow to $10.96bn by 2010 from the current $6.08bn in 2007.

As of 2007, embedded has 81.1 percent share, hardware board design 6.3 percent; and VLSI design 12.3 percent, respectively.Source: ISA.

The challenges and focus areas for the embedded design industry include manpower -- focusing on increasing productivity, creating readily deployable engineering workforce, and focusing on developing high-end skills.

Another area India is working on is moving up the semiconductor value chain. India is now focusing on end-to-end product development, investing in IP development, developing India specific products, and partnering with OEMs to understand the market needs.

The challenge is posed by the cost structure. India needs to better address cost management, i.e., increasing infrastructure and salary costs, as well as managing the dollar's impact.

India design inside
Several global products have been now developed out of India. Some recent examples are: Harita Infoserve Ltd is developing interior parts and conducting computer tests on components for General Motors Corp.

Next, Ittiam’s videophone design will become almost entirely an India story: part of the chip, the product design, the software and, finally, the manufacturing also done here. Plexion Technologies has worked on the interior design and windows for a DaimlerChrysler (DCX) bus.

Quasar Innovations designed and developed a dual SIM card — PTL910 mobile phone for Primus, to be launched in the European market. The mobile phone allows the user to have SIM cards from Primus for two countries, with the phone automatically choosing the correct SIM depending on the user’s location.

Finally, MindTree itself has designed a feature rich satellite handset with mobile handset form factor for a European company.

Attractive semicon policy
India's semiconductor policy is likely to attract investments of over $10bn. The government of India will bear 20 percent of the capital expenditure during the first 10 years for units located inside SEZs and 25 percent for those outside.

For semiconductor manufacturing (wafer fabs) plants, the policy proposes a minimum investment of $625mn. The same for ancillary plants would be $250mn.

The government's participation in the projects would be limited to 26 percent of the equity portion. The key benefit here is the grant of the SEZ status.

India’s evolving ecosystem is driven by the bottom of the pyramid (BOP) opportunity. Tata Motors announced the now famous Nano -- the Rs. 1 lakh (sub $2500) car -– said to be the world's cheapest car. This has been indigenously developed in India, for India, by Tata Motors.

Nano has passed all mandatory crash tests and Euro IV norms. It is likely to be commercially launched in the second half of 2008.

All of these make India the most happening semiconductor and electronics destination. Don't be surprised if companies not having an India strategy in place miss out on the action!

Indian design services to hit $10.96bn by 2010

This is a continuation of my previous blog on the Indian design services segment.

Revenues for the VLSI, board design and embedded software market in India are likely to touch US $10.96bn in 2010, according to an ISA-IDC study titled India Semiconductor and Embedded Design Market, 2007-2010. This market will grow from US $6.08bn in 2007 to US $7.37bn in 2008, on to US $8.97bn in 2009, respectively.

The total design services market in India is said to have grown at 21 percent year on year (y-o-y), as against a global growth of 6 percent y-o-y. According to Kapil Dev Singh, Country Manager, IDC (I) Ltd, the impending recession in US and sheer volume of work from US will put pressure on man-month rates and they will increase marginally. Currently there are close to 200+ companies active in India.

Touching upon the market trends for 2007 in the India semiconductor and embedded design market, he added that India will continue to be the preferred destination of choice for companies interested in embedded design and development.

There will also be an increased emphasis on IP development, as third-party design services companies look to move up the value chain. Next, localization of products design and manufacturing from India will drive significant investments by product and design services companies leading to a further fueling of growth.

However, he cautioned that the industry will continue to face significant challenges in managing the demand and workforce churn. The industry will also have to constantly evolve, upgrade and innovate, while keeping the costs down in order to stay cost competitive in the global market. Future trends in this industry will further witness the increasing proximity between the third-party service providers and OEMs for end-to-end product design.

Indan design services industry snapshot
The Indian VLSI design services contributed approximately 13 percent to the overall revenues and 11 percent to overall workforce. There has been an increase in consumer and portable/wireless segment, that has indirectly contributed to the growth of the VLSI design service industry in India. Spec to tape-out designs are gradually increasing as well, largely contributed to by the captive units. The IP development will continue to grow steadily during the forecast period.

The Indian hardware/board design industry contributed to 7.2 percent of the overall technical workforce in the design services industry. The trend of VLSI design houses transforming into one-stop design houses has increased the activity in the hardware/board design area. Growth is likely to come from consumer electronics and portable/wireless product segment in 2008. Product development activities for the Indian market will further boost growth.

The Indian embedded software industry is by and large, the most significant contributor. Embedded software contributed approximately 81 percent to the overall design services revenues and 82 percent to the overall workforce. Having a local manufacturing ecosystem will boost this segment with end-to-end product development and roll-out happening from India. Singh said that middleware/embedded applications along with testing will drive the growth in the market.

Two vectors for industry
Singh added that there were two vectors that the industry could go to. One, focus on export revenue and go closer to markets -- to their customers' markets and be part of product development. And two, focus on product development, as it would drive semiconductors and embedded design. He termed the growth achieved in the last three decades as version 1.0 and said India was ready to move on to version 2.0 in the coming years.

In version 2.0, the dynamics between the semiconductor industry ecosystem players would be transformed in the coming years. Also, there will be a disruption, which will see the entities shift their strategies, align and engage with each other within this ecosystem in a manner that will take them up one level in the overall product value chain.

E.K. Bharat Bhushan, director general, STPI, commented: "India is a very important destination. A wide range of design activities are now going on here. Semiconductor design has made rapid strides. India currently has strengths in areas such as IP development, and core advantages in terms of talent and local domestic market."

Indian design services to cross $7.37bn in 2008

The Indian semiconductor and embedded design services market has grown consistently over the last five years and market is likely to cross the US$ 7.37 billion in 2008.

This was the key finding of the "India semiconductor and embedded design service industry (2007-2010): Market, technology and ecosystem analysis", a study jointly released today in Bangalore by the India Semiconductor Association (ISA), and IDC (India) Ltd.

Some key findings of this comprehensive report include:

* The total design market in India for 2007 was estimated at US $6 billion. Eighty-one percent of the revenues were in the area of embedded software, followed by VLSI design (13 percent) and hardware/board design (6 percent).

* The total workforce employed in the design services industry in India was estimated at 130,000 in 2007.Of this the bulk of the jobs were in embedded software 82 percent followed by VLSI design (11 percent) and hardware/board (7 percent).

* The industry was estimated to grow at a CAGR of around 21.7 percent between 2007-2010.

* The geographical focus of the industry indicates that US has a share of 70 percent; Europe at 30 percent; and the emerging economy is that of Japan.

Key factors that determine the growth of the design sector in India are: the growing expertise and capabilities in complex end-to-end design; strong IP development and talent. The Indian domestic market is one of the fastest growing in Asia as well as globally.

Commenting on the Indian design market, Poornima Shenoy, president, ISA, said: "The Indian semiconductor design industry, with over 200 companies, is on a strong growth trajectory. Our growth is nearly 22 percent which is three times the global growth rate of around 7 percent. We are looking eastward for business and collaboration heralding a new era in the future of the sector."

Announcing the findings of the ISA-IDC report, Kapil Dev Singh, added: "The Indian semiconductor and embedded design services market has grown consistently over last the five years and market is expected to cross the US$ 7.37 billion in 2008. The domestic semiconductor and embedded design services industry is all set to enter a new phase -– Ver 2.0, following on from where Ver 1.0 left off. To achieve this next phase of growth, the industry needs to focus on the availability of quality manpower, higher productivity and more value creation."

R&D innovation: nano-scale to tera-scale

Justin Rattner, VP and Senior Fellow CTO, Intel Corp., while speaking at the recently held CXO Forum organized by the India Semiconductor Association (ISA), highlighted the various innovations Intel has created over the years and continues to do so.

There are some hurdles to innovation. For instance, success brings conservatism and then, there is the curse of high-volume manufacturing. It led to Andy Grove's famous statement: "Only the paranoid survive". Obviously, massive inertia and innovation do not blend. Rattner mentioned certain external hurdles, especially, anti-Innovation policies and standards that hamper innovation.

Moore's Law drives innovation
Moore’s Law has been driving innovation at Intel. These have been in the form of high-K metal gate transistors at 45nm -- the first new transistor architecture in 35 years! There's more, in form of phase change memory (PCM) below 45nm, non-planar tri-gate transistor beyond 32nm, and carbon nanotube transistor

Some recent multi-disciplinary innovations include 45nm Core 2 Duo, Nehalem uArch, power management, quad core through package technology, Silverthorne/LPIA, USB/PCI Express, vPro, and WiMAX and 802.11n, respectively. Intel has made sustained Advances in silicon technology. In 2007, it developed 32nm SRAM with 1.9 billion transistors, with 32nm slated for 2009.

Sustained advances in micro-architecture include Intel Core -- new microarchitecture 65nm (2006), Penryn compaction/derivative at 45nm (2007), Nehalem -- new microarchitecture 45nm (2008), Westmere compaction/derivative 32nm (2009), and Sandy Bridge new microarchitecture 32nm (2010). "This shows our sustained microprocessor leadership," added Rattner.

There are plans to further reinvigorate Intel architecture -- by high throughput computing, IA programmability, ease of scaling for software, array of enhanced IA cores, and increasing teraflops of performance. Its 45nm Silverthorne is based on the Menlow platform and promises 'Full Internet in Your Pocket.'

Intel has also made advances in integration and packaging, such as multi chip packages, Wifi + WiMAX, processor + chipsets + accelerators, 60 percent smaller CPU packages, and 100 percent lead-free technology*. By 2008, Intel is committed to having all 45nm CPUs halogen free.

Innovations in memory, communications
Intel has also made innovations in memory technology. Robson Technology, which has NAND Flash cache, has 1.5X faster application load times, has 1.5X resume from hibernate, gives 0.4W average power savings, and is used in the Santa Rosa platform.

The other innovation is solid-state drives. These are embedded in a range of devices, from handhelds to servers. Compared to HDDs, these give 1/10th the power, >10X performance, and are 1,000X more durable.

Innovations in communication technology include things like adaptive antenna and front-ends, digital CMOS radio, and reconfigurable baseband. Intel has also developed the world’s 1st TeraFLOPS supercomputer on a die. It features 80 cores, 1TFLOP at 62W, and 256 GB/s bisection.

Intel has also unleashed the era of tera. These are in the form of tera bits –- Si Photonics and tera bytes –- 3D stacked memory. The latter includes 256KB SRAM per core, 4X C4 bump density, and 3200 thru-silicon vias.

Similarly, Intel's innovation in tera-scale software include RMS workloads, C++ for parallelism, Ct for nested data parallelism (race-free irregular parallel computation), and hardware assisted STM C transactional memory, which ensures concurrent access with no errors.

Intel has also done innovations for emerging regions. Rattner touched upon Research (at the Berkeley Lablet), which involves a long-distance WiFi solution: 6Mb/s at 100+ km. This has been tested at the Aravind Eye Hospital in Tamil Nadu. It has allowed doctor/patient videoconferences. Thirteen rural villages have been connected so far, going on to 50 villages. The impact has been tremendous -- 2,500 exams per month, over 30,000 so far; cataracts, glaucoma, cornea problems have been diagnosed; and 3,000 people have had their vision restored so far.

Intel has also been a champion in innovating through collaboration. These have been in form of academic open-collaborative (pre-competitive research) -- Carnegie Mellon, Berkeley, University of Washington; industrial partnerships (product differentiation) -- an example being the ciscointelalliance.com, and consortium (ecosystem benefit) -- via the ISA, Continua, Innovation Value Institute, Trusted Computing Group, etc.

Intel's focus areas for 2008 include:
a) tera-scale computing -- unleashing the next generation of applications.
b) Platform* on a chip (POC) -- 'Platform' integration on chip with IA.
c) Trusted services -- technologies for secure service opportunities.
d) Carry small, live large -- context aware usage models and platforms.
e) Ultimate connectivity -- connected 'all-ways' for future platforms.

Top 5 semiconductor trends in India during 2008

And what's in store for the Indian semiconductor industry during 2008? Well, expect the Indian semiconductor to grow at 25-35 percent in the coming year!

S. Janakiraman, president and CEO –- R&D Services, Mindtree Consulting, and chairman, India Semiconductor Association (ISA), said at a recent meeting that those questioning India's need for fabs would feel terrible on missing out on the opportunities currently being provided by India, by 2015.

Here are the top five trends you can get to see happening in India in the semiconductor space in 2008.

1. More growth for India

The Indian semiconductor industry has been forecasted to grow by 25-35 percent during 2008 by the ISA.

2. Increase in design activities

On the design side, we are seeing an increase in various activities. More complex analog and digital designs are happening. More of physical designs are happening, including taking those designs up to the foundries – those are also increasing.

3. More of ATMP initially

In 2008, we will be seeing more of the assembly, testing, marking and assembly (ATMP) happening in the country.

4. Fabs some time away

The fundamental fabs are still a little far away. Most companies likely to start off by initially testing waters by making some level of investments in ATMP before moving on to fabs. One cannot rule out prospect of some leading Indian company investing in fabs.

5. Product companies will emerge eventually

Product companies are likely to emerge, although, they may start off by first manufacturing electronics products, and later move on to the emergence of semiconductor product companies.

Outlook for Indian semiconductor industry in 2008

S. Janakiraman, president and CEO –- R&D Services, Mindtree Consulting, and chairman, India Semiconductor Association (ISA), is quite bullish on the advantages of India and the opportunities provided in the Indian semiconductor industry. Here are some notes on the outlook for the Indian semiconductor industry in 2008.

Indian semiconductor industry to grow 25-35 percent in 2008
There has been an increasing trend of an increasing brand value for semiconductors within India. MNCs, especially are looking at semiconductor related outsourcing from India. We are also seeing lot of traction, from third-party service providers, like us -- Mindtree, Wipro, Sasken, etc., as well as captive centers of MNCs like STMicroelectronics, NXP, etc.

In terms of growth plans, all leading MNCs, like NXP, Freescale, STMicroelectronics, etc., are planning to grow significantly from their India centers. They are strongly building partnerships with Indian designers.

From the design side, India is also seeing an increase in various activities, such as more complex analog designs and more complex digital designs. We are seeing more of physical designs happening, and even taking those designs up to the foundries are increasing as well. "We foresee 25-35 percent likely growth in the Indian semiconductor industry during 2008," said Janakiraman.

Software is very critical to succeed. Various Indian providers, including Mindtree, are developing software for semiconductor-related products that are being designed by the overseas semiconductor companies.

Fab policy -- More of ATMP
The fab policy announced by the government of India is really attractive and mostly on par with other countries. A semiconductor fab requires very high capital-intensive investment. In 2008, we will be probably seeing more of the assembly, testing, marking and assembly (ATMP) happening in India.

The fundamental fabs are still a little far away. Most companies are likely to start off by initially testing waters by making some level of investments in ATMP before moving on to fabs. One cannot also rule out the prospect of some leading Indian company investing in fabs.

Lot of the big MNCs have been moving to Fab-Lite, having already announced Fab-Lite strategies. They are moving to manufacturing to with people like TSMC, Chartered, etc. If manufacturing happens in the fabs, it would not be from any of the integrated device manufacturers (IDMs). It may also happen from Indian companies who are into manufacturing.

Electronics manufacturing has already moved on to the electronics manufacturing services (EMS) vendors. Similarly, chip vendors are also moving on to third-party providers. MNCs like TI, LSI Logic, etc., are moving away from manufacturing and moving that to Charter, TSMC, etc.

Fab companies will also look at India as the fab policy will look attractive to them. "Those questioning India's need for fabs would feel terribly missing out on the opportunities currently being provided by India, by 2015," said Janakiraman.

Product companies in India
Over the next one to two years, we are likely to see more product companies emerging from India. Companies like Tejas are already present in India. Down the line, this will percolate into semiconductors. Opportunities are bound to emerge. It means, first, there will be companies manufacturing electronics products, which will later move on to the emergence of semiconductor product companies.

As for Indian companies into manufacturing electronics products, the ISA chairman feels that there would be more of high-complexity, medium volume products. These would probably be manufacturing networking, automotive, navigation products, etc., which are more rich in software, but are medium volume in production.

Impact of semiconductor policy
According to Janakiraman, the interest in India has only increased since the announcement of the semiconductor policy. As per the announcement, the government of India will bear 20 percent of the capital expenditure during the first 10 years for units located inside SEZs and 25 percent for those located outside.

For semiconductor manufacturing (wafer fabs) plants, the policy proposes a minimum investment of US $625 million. The minimum investment for for ancillary plants is US $250 million. The government's participation in the projects would be limited to 26 percent of the equity portion. The key benefit is the grant of the SEZ status.

The Indian semiconductor policy is applicable for manufacturers of all semiconductors, displays – including LCDs, organic light emitting diodes (OLEDs), plasma display panels (PDPs), and any other emerging displays, storage devices, solar cells; photovoltaics; other advanced micro- and nanotechnology products; assembly and test.

Advantage India
India is now presenting a great opportunity to the world, in fact, offering triple advantages. India has a very rapidly growing domestic market, growing at a CAGR of 30+ percent. India has achieved global recognition for back-end services -– having become a proven case for IP, embedded systems and IC designs.

India is also an attractive destination for manufacturing investments. It further boasts of a highly skilled employee base, and a fast and upcoming modern infrastructure –- SEZs. India also enjoys proximity to the EU and the MEA markets. It also boasts of freight cost, said to be 20 percent cheaper than China, leading to faster delivery and lesser pipeline inventory.

Indian ecosystem maturing
India is aligning itself with the global semiconductor market by creating high value work in VLSI, and board design and embedded software. Companies with domain expertise are driving Indian businesses. India has become the world’s destination for semiconductor design and embedded software, and is increasingly becoming the source as well.

In terms of consumption, the India semiconductor total available market (TAM) revenues are likely to grow by 2.5 times, while the total market (TM) is estimated to double in revenues by 2009. India's semiconductor market share is likely to be 1.6 percent of the global market by 2009 in comparison to 1.1 percent in 2006.

Regarding the growth drivers for electronics manufacturing in India, telecom and IT & OA (office automation) segments will account for almost two-thirds of the semiconductor TAM by 2009. Telecom's share has been estimated to grow from 21.2 percent in 2006 to 41.1pc by 2009.

According to ISA estimates, TAM revenues are likely to grow by 2.5 times and TM revenues are likely to double their revenues by 2009 as against 2006. Growth of TAM revenues is 35.8 percent compared with just 26.7 percent for TM revenues, thereby signifying an increasing manufacturing index for different electronics products in India.

The decline in ASP (average selling price) of semiconductors and hence, of electronic products, is largely offset by the higher unit sales of different electronics end use products.

Indian electronics industry -- 2010 scenario
India will have a very strong electronics scenario by 2010. The installed base of mobile phones will go up to 500 million. The installed base of PCs will move up to 65 million. The IT enabled services (ITeS) and software exports has been estimated at US $60 billion.

There will likely be about 40 million new Internet connections, with at least 50 percent of those being broadband connections. The nationwide TV broadcast is likely to become digital by 2015, beginning 2010. In that scenario, there would be significant opportunity for set-top boxes (STBs) consumption and manufacturing. There will also be an estimated over US $10 billion investment in e-governance initiatives and the national ID card.

Indian government announces policy to woo investments in semicon fabs

Better late than never, as the saying goes. The Department of Information Technology, Ministry of Communication and IT, Government of India, needs to be congratulated for coming up with the Special Incentive Package Scheme (SIPS)to encourage investments for setting up semicon fabs, and other micro and nanotechnology manufacturing industries in India!

The "ecosystem units" have been clearly defined as units, other than a fab unit, for manufacture of semiconductors, displays including LCDs, OLEDs, PDPs, any other emerging displays; storage devices; solar cells; photovoltaics; other advanced micro and nanotechnology products; and assembly and test of all the above products.

Just a week or two back, I was in conversation with some companies from Israel who were looking to develop business in India. Now, they, and others, have clear guidelines to follow. One of the companies, Nova Measuring Instruments Ltd, should feel happy that the definition of "ecosystem" includes assembly and test of products.

Nova develops, produces, and markets advanced monitoring, measurement and process control systems for the semiconductor manufacturing industry. Another well-known player, Tessolve, has been present in India since 2005 and would surely feel glad with the notification. At least, the media and others will take more notice of the company.

In Hong Kong, an ex-colleague and I used to cover OLEDs. When I first read about this technology back in the early 2000, I used to wonder whether India could have such a capability. Seems, it is now in a position to have OLEDs! I hope Lite Array (OLED) HK is watching and reading all of this.

Plasma display panels is another interesting line. The guidelines should interest LG, Matsushita, Sichuan Changhong Electric Co. Ltd, IRICO Group Corp. Panasonic, Asahi, Mitsui Chemicals, Nippon Electric, Samsung etc. Some of these firms are already present in India in one form or the other. It's just a matter of their being keen on developing PDP in India.

LCDs could be another big investment area. Taiwan's AU Optronics (AUO), Chi Mei Optoelectronics (CMO), Sharp, Samsung, as well as other biggies like LG, NEC, etc., need to be wooed.

It really excites me to see all the possibilities in front of India. If this goes on well, India would be in for a great ride in electronics manufacturing, and in the semicon space.

In the same context, the Bangalore Nano 2007, which will be held in December, could not be better timed. There should be a whole lot of companies looking to be present at this show!

India's now on the threshold of major initiatives in the electronics manufacturing space. Some semicon fabs will also come up, and the number of fabless companies should likely increase. Maybe, TSMC and Tower could oblige with some foundries too. Should all of this happen at the right time, we are in for exciting times.

Toshiba-Sandisk Fab 4 takeaways for Indian fabs

The recent news regarding the opening of Toshiba-Sandisk Fab 4, the latest 300mm wafer fabrication facility for NAND flash memory at Toshiba’s Yokkaichi Operations, in Mie Prefecture, Japan, may have missed the eyeballs of many of us.

There are lot of takeaways for those looking to set up fabs in India. HSMC and SemIndia are building fabs in FabCity, Hyderabad.

Obviously, funding was never a problem for Toshiba and Sandisk. Toshiba funded the construction of the Fab 4 building, and Flash Alliance, Ltd, a Toshiba-SanDisk venture established in July 2006, 50.1 percent owned by Toshiba and 49.9 percent by SanDisk, is funding the advanced manufacturing equipment now being installed in the fab.

HSMC and SemIndia would have partners for its fabs. HSMC has roped in Infineon as a technology partner and licensed its 130nm technology, while SemIndia has AMD as a partner, besides having folks such as Flextronics and Broadcom, among others by its side.

Some other learnings from Toshiba-Sandisk's Fab 4 are: it has been designed to minimize any impact on operations from natural disasters. Also, Fab 4 would employ 56nm process technology at start-up, and plans for the gradual transition to 43nm technology, starting from March 2008. Maybe, the proposed Indian fabs would need to look at both aspects. Yes, 130nm is a good area to start, but let's look ahead at what the industry's doing too. By the way, Toshiba-Sandisk Fab 4 was built in about a year's time. So, the fabs coming up in India should perhaps, look at similar timelines.

May I mention here that recently, a member from an Israeli semicon delegation mentioned that it would not be a bad idea for India to have 200mm fabs, which would be able to make products for the aftermarket. However, India does not have a concept of aftermarket yet.

In between, there's news that Hynix signed a contract to sell the equipment in its 200-mm fab in Wuxi, China to China Resources Holdings. Now, should this have any bearing on the idea of a 200mm fab? Or should Indian fabs focus on having 300mm fabs? It's for them to decide!

It's worth adding here that the India Semiconductor Association (ISA) has been doing great work in making lots of things happen, the latest being the MoU with the Taiwan Semiconductor Industry Association (TSIA). The MoU focuses on developing business ties and exchanges between companies in the semiconductor industry in the two countries.

Slow India has already missed the Intel bus. Also, there are TSMC and the others, like Tower, who have an eye on India. Should they choose to open shop here big time, there's every chance that they might steal the thunder from these proposed Indian fabs.

If we are to be a world-class semicon hub, we simply cannot afford to be slow -- in strategy and in its implementation. Decisions should be quick and effective!

Indian semiconductor market growing thrice as fast as global market

As per the India Semiconductor Association (ISA) and Frost & Sullivan (ISA-F&S), India's 2007 annual growth in the semiconductor market is nearly triple the rate at which the global semiconductor market is currently expanding.

The actual total market (TM) was $2.69bn and total available market (TAM) was $1.26bn. By 2009, the TM will likely grow at a CAGR of 26.7 percent to $5.49bn and the TAM will grow at a CAGR of 36 percent to $3.18bn.

Anand Rangachary, managing director, South Asia & Middle East, Frost & Sullivan, said: "The global semiconductor total market is growing at a rate of 8-9 percent CAGR, whereas the India total market is growing at 26.7 percent CAGR till 2009. India, which represented 1.09 percent of the global semiconductor market in 2006 will be 1.62 percent by 2009. As domestic demand for all electronics products is growing India is emerging as one of the fastest growing region in the world."

India is one of the fastest growing regions in the world. TAM growth rate at CAGR 36 percent, compared to 26.7 percent of TM CAGR signifies higher growth in local manufacturing of electronics products. In the industry, the technology change is so dynamic that every year, a new application/product gets launched, which changes the demand forecast by many ways (eg. launch of iPOD or iPhone/ WiMAX/GPON/LCD TV) as well as ASP changes.

The government rules change demand, and therefore ISA captures these changes on a real-time basis. Hence, ISA decided to have an annual update of the India market report. All of these changes are well captured in the current report and India's growth looks almost three times compared to the global growth rate.

According to the report, the top five end-user products that are likely to drive growth are mobile handsets, desktops and notebooks, GSM base stations, set-top boxes and energy meters. Microprocessors, analog, memory and discretes are said to be the top four semiconductor products likely to drive revenues.

While these stats read great, I am wondering exactly how much of these handsets will be made in India. Rather, what percent of silicon going into these handsets will be made in India! Memory is said to be a driver of the revenue. Well, the DRAM market has been acting up.

Now, iSuppli reported in a recent report:

"Following a brief respite, market conditions for DRAM suppliers are set to take a turn for the worse in September, iSuppli Corp. predicts.

iSuppli previously forecasted that DRAM prices would undergo a downward correction in October, following the current period of relative strength that brought an end to a phase of severe erosion in the second quarter. However, iSuppli now believes the DRAM prices will begin to decline one month earlier, in September.

Near-term market conditions remain in a state of flux with a great deal of uncertainty in the supply chain as suppliers and distributors continue to work off a glut of DRAM inventory. Furthermore, sales momentum is waning in the DRAM spot market, as rising prices and falling supply of LCD panels cut into the available budget for memory in some PCs.

This is bad news for memory suppliers, which had been basking in the present period of relative pricing strength. Weak pricing in September will set the stage for further erosion in the fourth quarter. iSuppli now foresees the possibility of double-digit sequential price declines in the fourth quarter, erasing any increases that aided suppliers in the third quarter. Because of this, DRAM suppliers’ profitability will dwindle in the fourth quarter compared to the third, iSuppli predicts."

I'd be very interested to see how much of these memory predictions turn out to be correct! If they aren't, I wonder how memory is going to figure among the top four revenue drivers in the Indian semicon market, at least in the near and immediate future. Unless, I somehow missed a point somewhere!!

Qualcomm rocks top 10! Is fabless the way ahead?

For the first time in semiconductors, a fabless company has cracked the Top 10! This honor has gone to Qualcomm, which broke into the Top-10 ranks of the global chip industry in the second quarter of 2007, according to iSuppli!

The list is consumed by the usual suspects, the giants -- Intel, Samsung, Texas Instruments, Toshiba, STMicroelectronics, Renesas, Hynix, NXP -- from no. 1 to no. 8, and then, Qualcomm -- the surprise entrant at no. 9, and finally, Infineon Technologies.

This leads to a question: is fabless the way ahead for the future? Maybe, there is! After all, iSuppli reports of an "Asian flu" -- read: all leading Asian semicon suppliers witnessing declines in revenues, even as Qualcomm moved up!

Here's what Future Horizons has to say in its monthly semiconductor forecast:

If May’s WSTS results were "disappointing", June's were a real proverbial kick in the pants, with 2Q07 down 2 percent on the 1Q07. Whilst we had anticipated in last month’s Report that the quarter would be down "at least 1 percent versus 1Q07", we had expected it to be closer to 1 percent, not 2. This year is turning out to be even more of a white-knuckle ride than normal, testing the industry’s vision and faith to new limits. With short-term industry momentum still refusing to rebound, all bets are still on for the second-half of the year. ASPs remain the underlying cause of the industry’s problem, given June’s IC units were up 11.8 percent on the same period last year. With first-half year units up a respectable -- and sustainable -- 7.7 percent year-on-year, the value growth limped in at only 2.6 percent, due to a 4.6 percent decline in IC ASPs.

While Qualcomm surged in the second quarter, Asian biggies such as Samsung, Toshiba, Hynix, Sony and NEC saw semiconductor revenues decline. iSuppli reported Hynix and Toshiba as taking the biggest hits among the Top-10 suppliers.

What about India then, where you often hear cries for fabs? Does everyone know what kind of investment is required for a fab? And well, do people even have an idea how long would it take for a fab to break even?

Let's try something easier! Even if India currently has close to 200mn mobile phones and is growing, how many of those chips for mobile phones are currently being made in fabs located in India? Would a fab located in India only cater to the domestic market or should it cater to the overseas market as well? How many Indian companies are making those chips and how much is it all adding to India's GDP? Most importantly, are those fabs run by home-grown Indian companies? Are there any chances?

There are several fabless companies in India, especially in Bangalore. It won't take long to find them! There has been an endless debate on fabs vs. fabless. There's a reason why India has been stronger in semicon design!

However, to move up the value chain, India is being pushed hard to join the fab community. Given the current market dynamics, it may a long while before we get to see real success, should, as and when a fab or multiple fabs come up. Success may come, but it won't be easily achieved.