Right then, folks! Here are the much awaited top trends for global semiconductor industry for 2009!
First, let's start with microprocessors and microcontrollers. One of the most apt persons to answer this query was Jordan Plofsky, senior vice president, Market, Altera Corp., during his recent visit to India for the Altera SOPC Conference.
Top trend in microprocessors/microcontrollers
Undoubtedly, the major trend will be the shift to multicore and its challenges. These challenges include:
* Parallel programming tools.
* Memory bandwidth allocation.
* O/S support.
* Verification tools.
* Power reduction and performance improvements.
In one of my previous blogs, I had discussed with Intel how parallel programming is getting to be regular! Also, AMD is well on an identical path! Hence, this key global trend is very much in line with the focus on parallelism!
Top global semiconductor trends for 2009
According to Plofsky, the major trends would be:
* Consolidation
* Power management
* Supply chain dynamics changing – inventory reduction
* Focus on operational costs in a slower growth environment
Indian semicon trends
And what about the top trends for the Indian semiconductor industry? Here are some thoughts from S. Janakiraman, former chairman, India Semiconductor Association (ISA) and President and CEO-R&D Services, MindTree.
Top 5 trends for Indian semicon industry in 2009
According to Jani Sir, the key trends in India during 2009 are:
* Global customers will have higher cost pressure and increase level of offshoring and outsourcing in 2009.
* India will become an even more important market for selling semiconductors as India will show higher percentage growth than other markets.
* Decided in India and originated in India products will licensed and manufactured for the global market.
* Business models for design services will start shifting from T&M and linear with people strength to risk-reward, non linear and more skin in the game.
* India will start inventing products that matter to rural and bottom of the pyramid segments.
All of these are in line with what's happening in the Indian semiconductor industry -- focus on embedded and design services, coupled with product development, which is beginning to see several starts. Also, several MNCs are now designing products out of India. Two recent top-of-the-mind instances are those of Intel and AMD. Others will follow suit, definitely.
Well, these trends could be tough to beat! What do you think folks?
Showing posts with label India semiconductor market. Show all posts
Showing posts with label India semiconductor market. Show all posts
Tuesday, 2 December 2008
Monday, 1 December 2008
Four key drivers for Agilent!
Agilent has been a leader in T&M for quite some time, and India remains a key market for the company.
According to Venkatesh Valluri, President and Country General Manager, Agilent Technologies India, the global market size for T&M in electronics and life sciences is $43 billion. This includes $18 billion in electronics and $25 billion in life sciences. From the India side, the size is about $1 billion.
He says: "Testing is becoming a more integral part of the product development process, especially in general electronics. It is now coming of age. As for the rate of expansion, it is approximately 15-20 percent YoY, and it is higher in India than in other parts of the world."
Drivers for T&M
Telecom has been the leading driver. However, telecom growth may not be sustained YoY, for say, the next 10 years. "You can't get 100 million subscribers each year! The difference would be more in the quality of service (QoS). This automatically drives testing and measurement," he adds.
The second driver is the aerospace industry. The difference is through high-end technology. Agilent's ADC conversion technology is one of the best in the world. In the next few years, new programs will make this segment even more stronger.
The third driver is manufacturing electronics. In India, it is definitely not as aggressive as China, but it is coming up. Even most of the EMS players are present here. Therefore, some ecosystem is building up.
The fourth driver is the design validation process. As the global R&D centers start coming into India, the companies are also starting to do product design.
Agilent in solar
Hold it guys! Agilent is all set to play a big role in the emerging solar/PV segment as well. According to Valluri, in India, solar/PV is getting into a manufacturing transition.
He notes "Agilent plays strongly in the nanomeasurement area. As solar emerges in India, nanomeasurement technology will become important. Agilent has the AFM (atomic force microscopy), which is a leading product line."
Semicon in India
All of the large semiconductor companies are based in India. Also, a lot of high-end work is also happening here. The design validation market is slowly coming up.
Agilent feels that the semiconductor companies would need products with the right price points. There will be a need to build the right value at the right price points, says Valluri.
On the gloomy economic climate, he agrees that while the economic climate will not be so robust in 2009, Agilent operate in markets that are considered steady. "We believe that it will be reasonably okay to remain committed to such markets," he says.
China, India largest growth markets
Ron Nersesian, Vice President and General Manager, Wireless Business Unit, Electronic Measurements Group, Agilent, points out that it is good to see growth that has been happening.
He says: "Growth in our business has been exceptional. It is an opportunity to work with the local companies as well as the Nokias of the world. We also see opportunities in aerospace and defence, wireless R&D, and installation and maintenance areas. China and India are the largest growth markets."
Agilent's strategic intent is to become the leading test and measurement company.
"If you look at the new wireless standards, we would like to provide solutions for all of these standards. We are working on both WiMAX and LTE. We are working with the top wireless vendors as well, says Nersesian.
In aerospace, Agilent work on signal analyzers, signal sources, etc. It also makes network analyzers and component test products, as well as non-linear vector analyzers.
Agilent has also invested in the network surveillance area. "We are focusing on RF surveillance and solutions as well, which can be of great interest to the Indian government," adds Nersesian.
According to Venkatesh Valluri, President and Country General Manager, Agilent Technologies India, the global market size for T&M in electronics and life sciences is $43 billion. This includes $18 billion in electronics and $25 billion in life sciences. From the India side, the size is about $1 billion.
He says: "Testing is becoming a more integral part of the product development process, especially in general electronics. It is now coming of age. As for the rate of expansion, it is approximately 15-20 percent YoY, and it is higher in India than in other parts of the world."
Drivers for T&M
Telecom has been the leading driver. However, telecom growth may not be sustained YoY, for say, the next 10 years. "You can't get 100 million subscribers each year! The difference would be more in the quality of service (QoS). This automatically drives testing and measurement," he adds.
The second driver is the aerospace industry. The difference is through high-end technology. Agilent's ADC conversion technology is one of the best in the world. In the next few years, new programs will make this segment even more stronger.
The third driver is manufacturing electronics. In India, it is definitely not as aggressive as China, but it is coming up. Even most of the EMS players are present here. Therefore, some ecosystem is building up.
The fourth driver is the design validation process. As the global R&D centers start coming into India, the companies are also starting to do product design.
Agilent in solar
Hold it guys! Agilent is all set to play a big role in the emerging solar/PV segment as well. According to Valluri, in India, solar/PV is getting into a manufacturing transition.
He notes "Agilent plays strongly in the nanomeasurement area. As solar emerges in India, nanomeasurement technology will become important. Agilent has the AFM (atomic force microscopy), which is a leading product line."
Semicon in India
All of the large semiconductor companies are based in India. Also, a lot of high-end work is also happening here. The design validation market is slowly coming up.
Agilent feels that the semiconductor companies would need products with the right price points. There will be a need to build the right value at the right price points, says Valluri.
On the gloomy economic climate, he agrees that while the economic climate will not be so robust in 2009, Agilent operate in markets that are considered steady. "We believe that it will be reasonably okay to remain committed to such markets," he says.
China, India largest growth markets
Ron Nersesian, Vice President and General Manager, Wireless Business Unit, Electronic Measurements Group, Agilent, points out that it is good to see growth that has been happening.
He says: "Growth in our business has been exceptional. It is an opportunity to work with the local companies as well as the Nokias of the world. We also see opportunities in aerospace and defence, wireless R&D, and installation and maintenance areas. China and India are the largest growth markets."
Agilent's strategic intent is to become the leading test and measurement company.
"If you look at the new wireless standards, we would like to provide solutions for all of these standards. We are working on both WiMAX and LTE. We are working with the top wireless vendors as well, says Nersesian.
In aerospace, Agilent work on signal analyzers, signal sources, etc. It also makes network analyzers and component test products, as well as non-linear vector analyzers.
Agilent has also invested in the network surveillance area. "We are focusing on RF surveillance and solutions as well, which can be of great interest to the Indian government," adds Nersesian.
Thursday, 23 October 2008
No fabs? So?? Fabless India shines brightly!!
This is no secret: fabs or no fabs, fabless India has been shining brightly all this while and will continue to do so for some time!
I've blogged on numerous occasions about India's strength in design services, India as the embedded superstar, and well, about India's growing might in global semicon. A fab will surely boost India's image on the global map, but it is definitely not that essential!
It was very pleasing to hear S. Janakiraman, former chairman, India Semiconductor Association, and President and CEO-R&D Services, MindTree, also highlight this fact at Altera's SOPC conference recently. Perhaps, India has been emphasizing on having a fab. However, if the fabless segment keeps growing as it has been up until now, that would boost industry growth as well!
Top 10 global fabless companies
For the record, here are the top 10 global fabless companies of the world, as reported by the Global Semiconductor Alliance (GSA), formerly, Fabless Semiconductor Association, USA.
According to GSA, the total fabless revenue was $27.3 billion, a 12 percent growth year-on-year during 1H 2008. I believe, quite a few, or nearly all of the companies within the GSA top 10 list, have some sort of a presence in India!
Let's also re-visit the numbers provided by ISA-Frost & Sullivan in its study on the Indian semiconductor industry. The India semiconductor TAM (total available market) revenues will likely grow by 2.5 times, and the TM (total market) will likely double revenues in 2009. Is this not good enough?
Bear in mind that India also plays an active role in the verification and software domains, and it is increasingly covering the entire design chain. The fabs. vs. fabless debate has been going on since 2004-05. Back then, too, many industry observers were backing the fabless route. Now, this discussion is perhaps, a non-issue, with the fabless segment easily the star performer.
India has long had the expertise in chip/board design, embedded software and system engineering. Also, the product and service differentiation is being increasingly driven through software, where India already enjoys a lead over other the APAC countries.
India distinctly has a tremendous opportunity to lead the global market in both semiconductors and electronic products, with or without fabs, or even being fabless!
I've blogged on numerous occasions about India's strength in design services, India as the embedded superstar, and well, about India's growing might in global semicon. A fab will surely boost India's image on the global map, but it is definitely not that essential!
It was very pleasing to hear S. Janakiraman, former chairman, India Semiconductor Association, and President and CEO-R&D Services, MindTree, also highlight this fact at Altera's SOPC conference recently. Perhaps, India has been emphasizing on having a fab. However, if the fabless segment keeps growing as it has been up until now, that would boost industry growth as well!
Top 10 global fabless companies
For the record, here are the top 10 global fabless companies of the world, as reported by the Global Semiconductor Alliance (GSA), formerly, Fabless Semiconductor Association, USA.According to GSA, the total fabless revenue was $27.3 billion, a 12 percent growth year-on-year during 1H 2008. I believe, quite a few, or nearly all of the companies within the GSA top 10 list, have some sort of a presence in India!
Let's also re-visit the numbers provided by ISA-Frost & Sullivan in its study on the Indian semiconductor industry. The India semiconductor TAM (total available market) revenues will likely grow by 2.5 times, and the TM (total market) will likely double revenues in 2009. Is this not good enough?
Bear in mind that India also plays an active role in the verification and software domains, and it is increasingly covering the entire design chain. The fabs. vs. fabless debate has been going on since 2004-05. Back then, too, many industry observers were backing the fabless route. Now, this discussion is perhaps, a non-issue, with the fabless segment easily the star performer.
India has long had the expertise in chip/board design, embedded software and system engineering. Also, the product and service differentiation is being increasingly driven through software, where India already enjoys a lead over other the APAC countries.
India distinctly has a tremendous opportunity to lead the global market in both semiconductors and electronic products, with or without fabs, or even being fabless!
Thursday, 11 September 2008
Synopsys' Dr Chi-Foon Chan on India, low power design and solar
There have been reports about the troubles within the EDA industry in recent times, especially those related with quarter sales. Interestingly, Synopsys has been the one sailing along fine! If that's not enough, it made its intention known of playing a role on the solar/PV segment, an area where lot of investments have been happening!
Given this scenario, I was fortuitous enough, rather, extremely lucky to be able to get into a conversation with Dr. Chi-Foon Chan, President and Chief Operating Officer, Synopsys Inc., during his recent visit to India.
On the state of the global semiconductor industry, he said, it was somewhere now in the low 10s [well below 10 percent]. The EDA industry is currently tracking below that level. However, Synopsys has been growing at around 10 percent. He said, "The technology challenges today are very high."
Synopsys has a substantial number of R&D population based out of India. Giving his assessment of the Indian semiconductor industry, Dr. Chan added: "Our main interest in India is largely talent and the academia. India can very well get more into the product development side. Even the outsourcing of designs have increased. Our capabilities, of the Indian team, have also increased."
As with any good semiconductor ecosystem, the Indian industry also needs a proactive industry association, a role played to near perfection by the ISA (India Semiconductor Association). Acknowledging the ISA's role, Dr. Chan said, "The ISA has also formed a very cohesive team."
There is little doubt about India's growing importance in technology strengths and managerial leadership. Dr. Chan added: "We are more on the high-end side and also track what others design. In India, the profiles of designs are definitely high-end in nature. This is largely due to the presence of a large number of MNCs. A very high percentage of designs are in the 45nm and 65nm process technology nodes."
There is another significant indicator of India's growing importance, and that is the huge rise in the attendance of the SNUG. In 2000, this event attracted 180 people. However, in 2008, the SNUG attracted over 2,000 people.
Moving India to next level
Given the very high level of commitment on Synopsys' part toward India, there was a need to find out from Dr. Chan what exactly India needs to do to move to the next level in the value chain in the semiconductor ecosystem.
He advised: "India can do two to three things. One, for the system to grow, you need the government, academia and industry to grow together. India has all of the ingredients required to drive products."
Comparing India with China, he highlighted the fact that while in China, the local consumption was higher than local supply, that was not the case with India!
"Therefore, looking at merely the local market is not the only thing. Products developed here can also be targeted at the Middle East and Southeast Asia." He was quite forthright in his analysis, adding: "Industries start when you find markets. The skill sets are already present here. There can well be multiple startups."
Dr. Chan also touched upon the fab vs. fabless issue, noting that there could well be more of fabless companies in India. "Building a fab requires lot of capital. Also, consolidation will continue to happen."
What role does Dr. Chan see Synopsys playing in the Indian context? He said: "Synopsys will continue to be a catalyst for the industry. A healthy design industry in India continues to help us. We also work well with the Indian universities. Having more people from the universities will always help. We also invest a lot in application support. The application team also trains others. I now look forward to seeing more fabless companies here and India to become even more global."
On low power design
India is also a centre of expertise in low power design, given that low power is hugely important in today's electronics ecosystem. Dr. Chan commented that low power has always been the number one design issue. It cannot be taken care of at one single stage.
He added: "A slightly new concept that has emerged is low-power verification. There are so many schemes for attacking low power, such as multiple voltage islands. We (Synopsys) are spending a lot of effort in low power.
"As a designer, you require detailed analysis. Low-power verification is now coming up. Another area is testing. As an example, if so much power is required, how do you have the power cut from the tool you are using to test? From a Synopsys point of view, we are involved in several points, such as front-end synthesis, testing, sign-off, verification, etc. We are trying to put in a whole lot of methodologies."
Synopsys in solar
EDA may be able to help by lowering power requirements and leakage on better products. Especially, the Synopsys' TCAD product can be used to create more efficient and effective solar cells. Now, this is not a new development anymore. Synopsys, along with Magma, have already made known their intentions about setting foot in the solar/PV space.
On the TCAD, Dr. Chan said: "We have a very strong position in the TCAD, commercially. Now, it is one of our most critical elements in high-performance. Our TCAD is among the strongest in the EDA industry.
"In solar, it does not have to be a complicated place-and-route, etc. From an entire solar industry point of view, we have now used some effort from TCAD into this space. Heat transfer issues, etc., are more in the EDA space."
I will continue my conversation with Synopsys on its solar initiative sometime later. Keep watching this space, folks
Given this scenario, I was fortuitous enough, rather, extremely lucky to be able to get into a conversation with Dr. Chi-Foon Chan, President and Chief Operating Officer, Synopsys Inc., during his recent visit to India.On the state of the global semiconductor industry, he said, it was somewhere now in the low 10s [well below 10 percent]. The EDA industry is currently tracking below that level. However, Synopsys has been growing at around 10 percent. He said, "The technology challenges today are very high."
Synopsys has a substantial number of R&D population based out of India. Giving his assessment of the Indian semiconductor industry, Dr. Chan added: "Our main interest in India is largely talent and the academia. India can very well get more into the product development side. Even the outsourcing of designs have increased. Our capabilities, of the Indian team, have also increased."
As with any good semiconductor ecosystem, the Indian industry also needs a proactive industry association, a role played to near perfection by the ISA (India Semiconductor Association). Acknowledging the ISA's role, Dr. Chan said, "The ISA has also formed a very cohesive team."
There is little doubt about India's growing importance in technology strengths and managerial leadership. Dr. Chan added: "We are more on the high-end side and also track what others design. In India, the profiles of designs are definitely high-end in nature. This is largely due to the presence of a large number of MNCs. A very high percentage of designs are in the 45nm and 65nm process technology nodes."
There is another significant indicator of India's growing importance, and that is the huge rise in the attendance of the SNUG. In 2000, this event attracted 180 people. However, in 2008, the SNUG attracted over 2,000 people.
Moving India to next level
Given the very high level of commitment on Synopsys' part toward India, there was a need to find out from Dr. Chan what exactly India needs to do to move to the next level in the value chain in the semiconductor ecosystem.
He advised: "India can do two to three things. One, for the system to grow, you need the government, academia and industry to grow together. India has all of the ingredients required to drive products."
Comparing India with China, he highlighted the fact that while in China, the local consumption was higher than local supply, that was not the case with India!
"Therefore, looking at merely the local market is not the only thing. Products developed here can also be targeted at the Middle East and Southeast Asia." He was quite forthright in his analysis, adding: "Industries start when you find markets. The skill sets are already present here. There can well be multiple startups."
Dr. Chan also touched upon the fab vs. fabless issue, noting that there could well be more of fabless companies in India. "Building a fab requires lot of capital. Also, consolidation will continue to happen."
What role does Dr. Chan see Synopsys playing in the Indian context? He said: "Synopsys will continue to be a catalyst for the industry. A healthy design industry in India continues to help us. We also work well with the Indian universities. Having more people from the universities will always help. We also invest a lot in application support. The application team also trains others. I now look forward to seeing more fabless companies here and India to become even more global."
On low power design
India is also a centre of expertise in low power design, given that low power is hugely important in today's electronics ecosystem. Dr. Chan commented that low power has always been the number one design issue. It cannot be taken care of at one single stage.
He added: "A slightly new concept that has emerged is low-power verification. There are so many schemes for attacking low power, such as multiple voltage islands. We (Synopsys) are spending a lot of effort in low power.
"As a designer, you require detailed analysis. Low-power verification is now coming up. Another area is testing. As an example, if so much power is required, how do you have the power cut from the tool you are using to test? From a Synopsys point of view, we are involved in several points, such as front-end synthesis, testing, sign-off, verification, etc. We are trying to put in a whole lot of methodologies."
Synopsys in solar
EDA may be able to help by lowering power requirements and leakage on better products. Especially, the Synopsys' TCAD product can be used to create more efficient and effective solar cells. Now, this is not a new development anymore. Synopsys, along with Magma, have already made known their intentions about setting foot in the solar/PV space.
On the TCAD, Dr. Chan said: "We have a very strong position in the TCAD, commercially. Now, it is one of our most critical elements in high-performance. Our TCAD is among the strongest in the EDA industry.
"In solar, it does not have to be a complicated place-and-route, etc. From an entire solar industry point of view, we have now used some effort from TCAD into this space. Heat transfer issues, etc., are more in the EDA space."
I will continue my conversation with Synopsys on its solar initiative sometime later. Keep watching this space, folks
Monday, 14 July 2008
Practical to take solar/PV route: Dr. Atre, Applied
Solar/PV is perhaps, a practical route for India to enter manufacturing, contends Dr. Madhusudan V. Atre, president, Applied Materials India. Alternatively, another way to enter this field could be by having solar farms.According to Dr. Atre, India has a strong potential for manufacturing. The Indian scenario has the talent pool and an emerging middle class, along with the presence of system design and chip design companies. Only a fab seems to be the missing piece from this ecosystem!
Benefits of a fab include: fuels economic productivity, contributes to GDP and adds to national growth, creates jobs, helps set up the other expertise necessary for an ecosystem, and closes the loop between market, design, manufacture, test, customer.
Indian fab scenario
Commenting on the Indian scenario, Dr. Atre, says: "For PV, about $200-500mn is needed for a fab. If we can enter into manufacturing via the solar/PV route, the scale of investment required would be much less [than the investment needed for a wafer IC fab]. This can be practical route to enter manufacturing in India, and less complexity is involved, as compared to an IC fab." Another way of entering manufacturing is by having solar farms.
Applied's external face in India involves: Take leadership role in industry bodies; work with the government on various semiconductor and manufacturing policies; look for potential investments in start-ups; work with the academia on collaborative research in nanomanufacturing; be sponsors in key conferences; drive corporate social responsibility programs; and help enable semiconductor and solar manufacturing in India.
Touching on some emerging areas of interest, Dr. Atre highlights that packaging is very important in semiconductors. "We may look at some company in packaging R&D. We have invested a bit in Tessolve," he says. "We would also like to see the success of the nanotech lab in IIT-Mumbai, and see how it can help India." On a global scale, he notes that Applied would be setting up two-three SunFab lines with Masdar in Abu Dhabi, UAE.
Applied Materials in India
Headquartered in Bangalore, Applied has been present in the country for over five years. It has approximately 1,500 employees and associates. A liaison office was originally set up in May 2002. Applied Materials India Pvt Ltd (AMIPL) was set up in July 2003, and operations started in November 2003 with cost + model. It consolidated all Applied operations in Bangalore into ITPL (~92,000sqft). It also merged Brooks Chennai (~100RFTs) into Applied India operations. Applied currently has R&D centers in Bangalore and Chennai.
Next, Applied established site operations in Delhi (~5000 sqft) to support Moser Baer. Its key partners are Satyam, Wipro and TCS, on various aspects of engineering and software services. In Delhi, Applied has 25-30 people to support Moser Baer, where it has the first SunFab line up and running.
In Mumbai, it has set up a nanomanufacturing lab with IIT-Mumbai. "We have put in equipment worth $7-8 million there, and do R&D projects," adds Dr. Atre. The nano lab at IIT-Mumbai was inaugurated in November 2007 by Mike Splinter, president and CEO, Applied Materials.
Applied is also involved in the potential upgrade of SCL. "We are working with some other companies on how we can upgrade SCL. We are more at the backend to set up some capabilities," he says.
Applied Ventures makes investment in emerging technologies and companies. It has funded a couple of companies in the semi start-up stage. Applied Ventures looks at global investments.
Moser Baer is Applied's first customer in India. It has a 35-40MW assembly line. This is the first time that 5+m2 solar panels will be coming out. The panel will now have to be taken up to the production ramp. Dr. Atre adds that Europe was much advanced in solar/PV. Germany, especially, was far advanced in the implementation aspect, as well as Italy and Spain.
Nanomanufacturing simplified
Nannomanufacturing, as per Wikipedia, is "the near-term industrial-scale manufacture of nanotechnology-based objects, with emphasis on low cost and reliability." To manufacture at this level requires a lot of expertise, skills, etc., says Dr. Atre. Cost is definitely an important driver, and so is reliability, he adds. According to him, nanomanufacturing technology combines the two core strengths of Applied: nano + manufacturing.
Applied's vision has been to apply nanomanufacturing technology to improve the way people live. Its mission: To lead the Nanomanufacturing technology revolution with innovations that transform markets, create opportunities, and offer a cleaner, brighter future to people around the world.
Applied Materials is a global leader in nanomanufacturing technology solutions with a broad portfolio of innovative equipment, service and software products for fabrication of: semiconductor chips, flat panel displays (using TFTs), solar photovoltaic cells and modules (in crystalline and thin film vectors), flexible electronics, and energy efficient glass (BIPV). The last three categories fall under EE or the Environment and Energy Division.
Dr. Atre says: "We have the SunFab line for solar/PV. In flexible electronics, as an example, you can have solar cells wrapped around an object." As for energy-efficient glass, you can save on AC costs, etc., by using building integrated photovoltaics.
Core capabilities
Applied's core capabilities include: commercialize sophisticated systems and thin-film engineering, besides a global culture. "Our technological strengths include semiconductors, solar/PV cells and FPDs. We have nanomanufacturing technology as the common theme." Touching on the loss per watt, he says it is currently around $14, which needs to come down to at least $2 or one-fourth.
Applied makes systems used to produce virtually every new microchip in the world, taking care of thermal, etching, inspection, PVD, CVD and CMP. For LCD flat panel display systems, Applied offers a variety of systems, such as PECVD systems, e-beam array testers, PVD systems and color filter sputtering systems.
The processing panels can be up to 2.2x2.5 meters. For solar manufacturing, Applied offers crystalline silicon, flexible PV and thin-film line, or the Applied SunFab lines. For architectural glass and flexible electronics, it offers both glass and Web coating systems.
"We have three key businesses, silicon systems, displays and energy and environmental solutions," said Dr. Atre. These are supported by Applied Global Services.
Applied's goals for 2010 include: Expanded revenue streams, to become a $13-15 billion company; increased operating efficiency, with margins >25 percent, and increased cash flow, about >20 percent of revenue.
Tuesday, 24 June 2008
Premature to write off Indian fab story: Dr. Pradip Dutta
The previous blog was focusing on SemIndia and the notice it has received on the Fab City in Hyderabad, along with NanoTech. BV Naidu, a friend and an industry colleague, has put up a strong front, and is trying his best to ensure things get going in the IC wafer fab space in India. Best of luck to him and SemIndia. India needs a fab, much more than ever, now.
I also happened to have a brief chat with Dr. Pradip K. Dutta, Corporate Vice President & Managing Director, Synopsys (India) Pvt Ltd, another friend and an industry colleague. Although from the EDA industry, Dr. Dutta has great thoughts and ideas regarding the future of semiconductors in India.
According to him, building wafer fabs in India involves an element of national pride and should also make business sense, simultaneously. The government has to look at fabs from a national policy perspective. If there were any company breaking ground in India, to build a clean-room, we would have known, he states, which is very correct.
We all know that a fab is a highly capital intensive project. He says: "I hope we can see some concrete proposals by this time next year. It is too premature to say that the Indian fab story is disappearing."
There is a need to bear in mind that fabs in India have a three-year window. So, there is no reason for getting worked up right now, as the window is still there and existing. Dr. Dutta adds: "The business people will only open up their cards in the final stages. I have reasons to believe by summer of 2009, there will be some actual stakeholders."
A fab is a very economically complex business. In the next five-10 yrs, there is a strong feeling that there may be only three to four companies globally, as IDMs, and the rest move into foundry. Dr. Dutta stresses: "To expect India will have a 5bn, 45nm, capable fab is something that needs to be examined. The business case has to be the driver."
The semicon policy has definitely been a good start. What has since happened since that the ancillary manufacturing industry has been taking advantage of the policy.
"The government is quite optimistic that as we reach next year, by this time, companies will firm up their plans, as the industry window is three years. We believe that concrete proposals will come in by that time," reiterates Dr. Dutta.
The government wants to see a state-of-the-art facility come up as well. He notes: "Maybe, 50 percent of all ICs sold globally, can be built on 0.25-micron technology. However, under the current semicon policy, we want to encourage state-of-the art manufacturing."
Given the current global economic scenario, it will take real effort on part of all the stakeholders and come up with a wafer IC fab. India seriously needs a fab! There's a huge market out there, which needs to be tapped. Delays will only add to our slipping back.
I also happened to have a brief chat with Dr. Pradip K. Dutta, Corporate Vice President & Managing Director, Synopsys (India) Pvt Ltd, another friend and an industry colleague. Although from the EDA industry, Dr. Dutta has great thoughts and ideas regarding the future of semiconductors in India.According to him, building wafer fabs in India involves an element of national pride and should also make business sense, simultaneously. The government has to look at fabs from a national policy perspective. If there were any company breaking ground in India, to build a clean-room, we would have known, he states, which is very correct.
We all know that a fab is a highly capital intensive project. He says: "I hope we can see some concrete proposals by this time next year. It is too premature to say that the Indian fab story is disappearing."
There is a need to bear in mind that fabs in India have a three-year window. So, there is no reason for getting worked up right now, as the window is still there and existing. Dr. Dutta adds: "The business people will only open up their cards in the final stages. I have reasons to believe by summer of 2009, there will be some actual stakeholders."
A fab is a very economically complex business. In the next five-10 yrs, there is a strong feeling that there may be only three to four companies globally, as IDMs, and the rest move into foundry. Dr. Dutta stresses: "To expect India will have a 5bn, 45nm, capable fab is something that needs to be examined. The business case has to be the driver."
The semicon policy has definitely been a good start. What has since happened since that the ancillary manufacturing industry has been taking advantage of the policy.
"The government is quite optimistic that as we reach next year, by this time, companies will firm up their plans, as the industry window is three years. We believe that concrete proposals will come in by that time," reiterates Dr. Dutta.
The government wants to see a state-of-the-art facility come up as well. He notes: "Maybe, 50 percent of all ICs sold globally, can be built on 0.25-micron technology. However, under the current semicon policy, we want to encourage state-of-the art manufacturing."
Given the current global economic scenario, it will take real effort on part of all the stakeholders and come up with a wafer IC fab. India seriously needs a fab! There's a huge market out there, which needs to be tapped. Delays will only add to our slipping back.
Tuesday, 10 June 2008
Indian semicon needs concrete plans
The Indian semiconductor market is still in a nascent stage. In the Indian context, while we are very good in design services, we have yet to achieve the required capability to build products.In this context, Subhash Bal, Country Director, Synopsys (India) EDA Software Pvt. Ltd says: "One has to first understand the dynamics of the semiconductor market. The key is: if you grow a market here, it will also grow somewhere else. That's where the trick lies!"
The Indian semiconductor industry really needs to figure out what will work! "It would be better to think about solving a particular problem, which will go on to solve a bigger problem for India. There is also a need to build incentives to go along with al of this," adds Bal.
He states: "We should produce a plan to take semiconductors forward in India. We need to be realistic about what we can do with the semiconductor industry. India should better be up there, at the top, in terms of technology as well. For example, RFID can be used in a whole range of applications."
Way forward
What can be the way forward for the Indian semiconductor industry? First, there is a need to create a plan for Indians residing in the USA to return home and start something. They should be offered a lot of incentives as well. Next, there is a need to allow developing schemes where Indian applications become the focus, especially for high-volume government applications, such as traffic light controls, ID cards, toll tax applications, etc.
"Such things will only trigger demand. It will also see the rise of Indian product companies, and later, those will grow into semiconductor companies," advises Bal.
Indian fab story disappearing?
Is the Indian fab story disappearing from sight? Not exactly! There will be a lot of solar fabs coming up, while it is still early days for wafer IC fabs. Fabs for PV cells are relatively easy to set up. Undoubtedly, PV has a huge market potential.
On the subject of fabs, Bal says: "The technique of management of fab technology is crucial. There should be some government schemes for smaller fabs as well. It does not matter whether these are 150mm or 180mm fabs. Indigenous applications can source simple applications, such as autorickshaw meters, toll tax applications, etc."
Bal, like many others, believes that the next decade clearly depends on the youth of India. Therefore, this plan for semiconductors has to be long term -- for about 25-30 years -- and action oriented. This has to start from an end solution, and thereafter, semiconductors should be able to take off!
"Apart from such a plan, it is also important that sufficient attention is given to developing the right infrastructure. Infrastructure needs to be fixed as well. Should these be addressed, the semiconductor industry in India will likely take off," adds Bal.
Globally, Synopsys has been growing steadily. In fact, the Q1-08 revenue is likely to close at $325 million. Synopsys India has a current headcount of over 600 employees, located in Bangalore, Hyderabad and Noida. The activities of the Hyderabad center is global in nature.
Saturday, 31 May 2008
Top semicon articles of 2008
A very kind reader left a comment yesterday that he (or she?) spent three hours on my blog! I am simply overwhelmed and humbled!!
It has really been a pleasure writing and maintaining a semicon blog! Plenty such are around carrying very valuable information, and I salute those bloggers.
It is really tough to contend with all the other technology-related information, but then, semicon has its own charm, and its own set of dedicated readers -- who DO go on to become extremely loyal.
I am even more touched by another request by a friend to list all the top articles I've written this year. Wow!!
It is very difficult for me to say, which ones are the best! However, I am listing the articles here. They all link back to CIOL. Of course, I've blogged here first, so, those who are familiar with my blog pieces, will identify them immediately.
Here goes then -- starting from the latest back down to very late last year -- in terms of relevance. Enjoy!
Semi trends 2008: Fab spend lower, ASPs stabilizing
The call on global fab spend was for a 10 percent reduction, and this is now getting to be closer to 20 percent.
UK, India aim for semicon collaboration
ISA-UKTI study examines collaboration scope between India and UK in design, applications and devices.
Dubai an emerging silicon frontier
The government of Dubai has set up the Dubai Silicon Oasis Authority (DSOA) as the engine for propelling Dubai into the knowledge economy.
Be parallel, or perish!
Parallelism offers new doors, and creativity is required to open these new doors, says Intel.
Altera first @ 40nm FPGAs
The company has announced two product lines -- the Stratix IV FPGAs and the HardCopy IV ASICs.
Semicon likely to grow 12pc in 2008
If there will be an economic recession, the chip industry (but not all firms) is in the best shape possible to weather the ensuing storm.
India's growing might in global semicon
India is fast becoming the world's destination, and increasingly the source too, for semiconductors.
Fascinating developments in 22nm!
These augur well for the global semiconductor industry, even though the field could get much narrower.
Indian design services to touch $10.96bn by 2010
Total design services market in India is said to have grown at 21 percent year on year.
NXP India achieves RF CMOS in single chip
The entire analog and RF work done has been in Bangalore by NXP's single-chip design team.
LabVIEW 8.5 delivers power of multicore processors
With LabVIEW, designers and engineers can assign different tasks on different cores -- which are independent.
Multi-nationalization of product development process
Indian designers lead in transaction level design, and can play big role in EDA.
Can we expect exciting times in 2008? Some trends
Blurring lines between PMPs and PNDs, semicon rush or hush; Netscape's end -- all are in store!
Semicon outlook 2008: Global market likely to grow 6-11 percent in 2008
Some predictions are for 2008 to be flat year or a year of negative growth; EDA to grow 7.8pc!
That's about it! If there's anything I've missed out, kindly let me know. Thanks for all your continuing support, dear readers. It is very humbling and touching.
It has really been a pleasure writing and maintaining a semicon blog! Plenty such are around carrying very valuable information, and I salute those bloggers.
It is really tough to contend with all the other technology-related information, but then, semicon has its own charm, and its own set of dedicated readers -- who DO go on to become extremely loyal.
I am even more touched by another request by a friend to list all the top articles I've written this year. Wow!!
It is very difficult for me to say, which ones are the best! However, I am listing the articles here. They all link back to CIOL. Of course, I've blogged here first, so, those who are familiar with my blog pieces, will identify them immediately.
Here goes then -- starting from the latest back down to very late last year -- in terms of relevance. Enjoy!
Semi trends 2008: Fab spend lower, ASPs stabilizing
The call on global fab spend was for a 10 percent reduction, and this is now getting to be closer to 20 percent.
UK, India aim for semicon collaboration
ISA-UKTI study examines collaboration scope between India and UK in design, applications and devices.
Dubai an emerging silicon frontier
The government of Dubai has set up the Dubai Silicon Oasis Authority (DSOA) as the engine for propelling Dubai into the knowledge economy.
Be parallel, or perish!
Parallelism offers new doors, and creativity is required to open these new doors, says Intel.
Altera first @ 40nm FPGAs
The company has announced two product lines -- the Stratix IV FPGAs and the HardCopy IV ASICs.
Semicon likely to grow 12pc in 2008
If there will be an economic recession, the chip industry (but not all firms) is in the best shape possible to weather the ensuing storm.
India's growing might in global semicon
India is fast becoming the world's destination, and increasingly the source too, for semiconductors.
Fascinating developments in 22nm!
These augur well for the global semiconductor industry, even though the field could get much narrower.
Indian design services to touch $10.96bn by 2010
Total design services market in India is said to have grown at 21 percent year on year.
NXP India achieves RF CMOS in single chip
The entire analog and RF work done has been in Bangalore by NXP's single-chip design team.
LabVIEW 8.5 delivers power of multicore processors
With LabVIEW, designers and engineers can assign different tasks on different cores -- which are independent.
Multi-nationalization of product development process
Indian designers lead in transaction level design, and can play big role in EDA.
Can we expect exciting times in 2008? Some trends
Blurring lines between PMPs and PNDs, semicon rush or hush; Netscape's end -- all are in store!
Semicon outlook 2008: Global market likely to grow 6-11 percent in 2008
Some predictions are for 2008 to be flat year or a year of negative growth; EDA to grow 7.8pc!
That's about it! If there's anything I've missed out, kindly let me know. Thanks for all your continuing support, dear readers. It is very humbling and touching.
Monday, 26 May 2008
Now, UK seeks semicon ties with India!
Just a couple of days ago, I had touched upon the growing global interest in the Indian semiconductor industry. Well, late last evening, I was present at the release of an important study that seeks collaborations between semicon firms from India and the UK! Talk about interest!!
The India Semiconductor Association (ISA) and the UK Trade & Investment and Science & Innovation Network has launched a study titled "Scope for collaboration between India and the UK in semiconductor driven industry 2008". The report was launched by Richard Hyde, head - British Trade Office, Bangalore and ISA chairman Jaswinder Ahuja.
Given India's growing presence in the global semicon industry, the study comes at the right time. UK and Indian semiconductor firms can collaborate to boost India's IP creation and build next-generation products. There are potential synergies between the two nations in areas such as design, applications and devices.
Indian semicon firms specialize in VLSI, hardware/board-level design and embedded systems in wireless communications, computing and networking. In turn, the UK's strength lies in IP creation and complete product development.
Richard Hyde remarked that there was lot of compatibility between the UK and Indian semiconductor companies. The study also laid the foundation for the forthcoming Semi Conclave, scheduled for September 15-16 in Bangalore, to be followed by similar events in Hyderabad and New Delhi. "It will bring together the industry and the academia, along with a visiting delegation from the UK." This event will be jointly organized by ISA, UKTI and SIN.
V. Ravichandar, CMD, Feedback Consulting said the first challenge while preparing the study was to find high-quality data. The ISA in India and the NMI in the UK had such data.
He added: "Firms that exist in India and the UK are essentially design firms. They become complementary as you collaborate." He highlighted IP creation and product development as the strength of the UK firms, and computing, networking and communications as the strength of the Indian semiconductor firms.
The best fit -- Indian universities and UK universities -- can be leveraged in the short run. Commenting on clusters, while these were built around places such as Bangalore, Chennai, Hyderabad and New Delhi in India, the UK has clusters in South-East England -- in hardware design, Scotland, East England -- software engineering, and a balance mix of companies in the South-West of England. India can provide skills in VLSI and EDA, as well as the large talent pool.
The next best fit lies in collaboration between the UK companies and the talent pool in India, which could go a long way in bringing down the research costs. Another fit could be between the companies in the UK and India, or the UK universities and Indian companies. However, the Indian companies might not be able to bring in the kind of funding required for high-end R&D as they are not mature enough.
Another fit could well be sharing of best practices, such as those brought by the Engineering and Physical Sciences Research Council (EPSRC) and EUROPRACTICE.
"The Indian government also needs to come forward beyond the semicon policy." Ravichandar added. "There is scope for 30-40 percent reduction in R&D expenses, should collaborations happen between semicon firms from the UK and India."
Poornima Shenoy, president, ISA, added that the ISA had initiated a Country Series, focusing on specific geographies of relevance to the industry. The report with UKTI is the first in this series.
The India Semiconductor Association (ISA) and the UK Trade & Investment and Science & Innovation Network has launched a study titled "Scope for collaboration between India and the UK in semiconductor driven industry 2008". The report was launched by Richard Hyde, head - British Trade Office, Bangalore and ISA chairman Jaswinder Ahuja.
Given India's growing presence in the global semicon industry, the study comes at the right time. UK and Indian semiconductor firms can collaborate to boost India's IP creation and build next-generation products. There are potential synergies between the two nations in areas such as design, applications and devices.
Indian semicon firms specialize in VLSI, hardware/board-level design and embedded systems in wireless communications, computing and networking. In turn, the UK's strength lies in IP creation and complete product development.
Richard Hyde remarked that there was lot of compatibility between the UK and Indian semiconductor companies. The study also laid the foundation for the forthcoming Semi Conclave, scheduled for September 15-16 in Bangalore, to be followed by similar events in Hyderabad and New Delhi. "It will bring together the industry and the academia, along with a visiting delegation from the UK." This event will be jointly organized by ISA, UKTI and SIN.
V. Ravichandar, CMD, Feedback Consulting said the first challenge while preparing the study was to find high-quality data. The ISA in India and the NMI in the UK had such data.
He added: "Firms that exist in India and the UK are essentially design firms. They become complementary as you collaborate." He highlighted IP creation and product development as the strength of the UK firms, and computing, networking and communications as the strength of the Indian semiconductor firms.
The best fit -- Indian universities and UK universities -- can be leveraged in the short run. Commenting on clusters, while these were built around places such as Bangalore, Chennai, Hyderabad and New Delhi in India, the UK has clusters in South-East England -- in hardware design, Scotland, East England -- software engineering, and a balance mix of companies in the South-West of England. India can provide skills in VLSI and EDA, as well as the large talent pool.
The next best fit lies in collaboration between the UK companies and the talent pool in India, which could go a long way in bringing down the research costs. Another fit could be between the companies in the UK and India, or the UK universities and Indian companies. However, the Indian companies might not be able to bring in the kind of funding required for high-end R&D as they are not mature enough.
Another fit could well be sharing of best practices, such as those brought by the Engineering and Physical Sciences Research Council (EPSRC) and EUROPRACTICE.
"The Indian government also needs to come forward beyond the semicon policy." Ravichandar added. "There is scope for 30-40 percent reduction in R&D expenses, should collaborations happen between semicon firms from the UK and India."
Poornima Shenoy, president, ISA, added that the ISA had initiated a Country Series, focusing on specific geographies of relevance to the industry. The report with UKTI is the first in this series.
Saturday, 24 May 2008
Growing interest in Indian semicon -- top 10 most read articles
It is soon going to be a year since the semicon Web site was launched by CIOL. Over the past year, I have noted with delight the growing interest in the Indian semiconductor industry.
Here is a collection of the 10 best articles for my readers. All articles link to those appearing on CIOL.
1. Indian semicon industry: Early steps taken, miles to go!
The Indian semiconductor design industry had a turnover of US $3.2 billion in 2005 with an engineering workforce of around 75,000. It is estimated to reach US $43 billion by 2015 and provide jobs to 780,000 professionals with a CAGR of around 30 percent for this period.
2. Indian semicon special: Increasing brand value for semicon within India
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, he speaks on a host of topics, ranging from the outlook for next year, as well as the fab and semiconductor policies, Indian ecosystem, etc.
3. Indian semicon special: Is the timing right for having fabs in India?
It has been some months since the Indian government announced the semiconductor policy. Some fabs are on the way, and lot of CEOs and other industry leaders from leading global semiconductor majors have been visiting India lately.
4. Indian fab guidelines promise exciting times for semicon, electronics
India seeks investments in ecosystem units for LCDs, OLEDs, PDPs, solar cells, photovoltaics, storage devices, advanced micro and nanotech products, etc.
5. Indian semicon policy ground breaking
These comments from Michael R. Splinter, president and CEO, Applied Materials, were enough to indicate how much the Indian semiconductor policy, announced recently by the government of India, has caught the attention of the global semicon majors.
6. Indian ecosystem will not enable faster product development cycles
The economy of scale may also not justify having a wafer fab facility to cater only to the Indian market, says Dr. H.V. Ananda, Synplicity.
7. India should be known for its semicon might
The semiconductor industry is poised for high growth and will make all round progress be in design or manufacturing or consumption. Issues to tackle are the rising costs and not yet conducive infrastructure.
8. ISA-F&S: India growing almost thrice as faster as global semicon
According to India Semiconductor Association (ISA) and Frost & Sullivan (ISA-F&S), India's 2007 annual growth in semiconductor market is nearly triple the rate at which the global semiconductor market is expanding.
9. India ascends in the embedded value chain
Indian semicon, embedded design industry to grow from $3.25bn in 2005 to $14.42bn in 2010 and $43.07bn in 2015.
10. India rapidly becoming hub for embedded designs worldwide
India design services companies are involved in embedded hardware and software design in the latest embedded market segments such as automotive infotainment, digital security and surveillance.
I'd like to say a very big thanks to all of my readers. I am also working on another semicon special, which should be out next month on CIOL. The semicon special for 2008 -- a collection of industry leading articles, will be online middle of next month.
Here is a collection of the 10 best articles for my readers. All articles link to those appearing on CIOL.
1. Indian semicon industry: Early steps taken, miles to go!
The Indian semiconductor design industry had a turnover of US $3.2 billion in 2005 with an engineering workforce of around 75,000. It is estimated to reach US $43 billion by 2015 and provide jobs to 780,000 professionals with a CAGR of around 30 percent for this period.
2. Indian semicon special: Increasing brand value for semicon within India
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, he speaks on a host of topics, ranging from the outlook for next year, as well as the fab and semiconductor policies, Indian ecosystem, etc.
3. Indian semicon special: Is the timing right for having fabs in India?
It has been some months since the Indian government announced the semiconductor policy. Some fabs are on the way, and lot of CEOs and other industry leaders from leading global semiconductor majors have been visiting India lately.
4. Indian fab guidelines promise exciting times for semicon, electronics
India seeks investments in ecosystem units for LCDs, OLEDs, PDPs, solar cells, photovoltaics, storage devices, advanced micro and nanotech products, etc.
5. Indian semicon policy ground breaking
These comments from Michael R. Splinter, president and CEO, Applied Materials, were enough to indicate how much the Indian semiconductor policy, announced recently by the government of India, has caught the attention of the global semicon majors.
6. Indian ecosystem will not enable faster product development cycles
The economy of scale may also not justify having a wafer fab facility to cater only to the Indian market, says Dr. H.V. Ananda, Synplicity.
7. India should be known for its semicon might
The semiconductor industry is poised for high growth and will make all round progress be in design or manufacturing or consumption. Issues to tackle are the rising costs and not yet conducive infrastructure.
8. ISA-F&S: India growing almost thrice as faster as global semicon
According to India Semiconductor Association (ISA) and Frost & Sullivan (ISA-F&S), India's 2007 annual growth in semiconductor market is nearly triple the rate at which the global semiconductor market is expanding.
9. India ascends in the embedded value chain
Indian semicon, embedded design industry to grow from $3.25bn in 2005 to $14.42bn in 2010 and $43.07bn in 2015.
10. India rapidly becoming hub for embedded designs worldwide
India design services companies are involved in embedded hardware and software design in the latest embedded market segments such as automotive infotainment, digital security and surveillance.
I'd like to say a very big thanks to all of my readers. I am also working on another semicon special, which should be out next month on CIOL. The semicon special for 2008 -- a collection of industry leading articles, will be online middle of next month.
Wednesday, 14 May 2008
Semicon to grow 12pc in 2008: Future Horizons
If there is going to be a global economic recession, the chip industry (but not all companies) is in the best shape possible to weather the ensuing storm!
According to Malcom Penn, CEO, Future Horizons, we are dealing with a semiconductor industry in 'deep trauma.' He was delivering the company's forecast at the recently held International Electronics Forum (IEF) 2008 in Dubai, predicting a 12 percent growth this year despite signs of a wobbling US economy.
Is there a need to get back to the industry basics? “Semiconductors are a peculiar business; the only sane strategy is to bet the company regularly,” once remarked Dr Gordon Moore.
Penn noted that the current industry status is somewhat confused and uncertain. Short-term issues are dominating the agenda.
Longer-term structural trends are unclear. The traditional IDMs are currently going through a mid-life ‘new business model’ identity crisis, and the start-ups are struggling to even reach critical mass! And all of this has been happening amidst intense economic uncertainty
"Now is the time for strong nerves and determination," Penn said. According to him, the underlying industry fundamentals are sound and there is no end in sight to the 'make-lunch-or-be-lunch' ethos.
The emerging economies like India and China have so far been less affected by the financial market's turbulence. In fact, the emerging and developing economies were shifting the global growth dynamics.
Chip industry in best possible shape
A forecast health warning is: IF the global economy collapses, it will take the chip market with it. However, Future Horizons feels that if there is going to be a global economic recession, the chip industry (but not all companies) is in the best shape possible to weather the ensuing storm.
The ASPs are an enigma wrapped up in riddle. The course of ASPs (like love) never runs smooth. Wobbles happen! ASPs are also the perennial (and least understood) industry wild card. ASPs are generally driven by new IC designs, and that takes time (sometimes three to four years). Post-2001, value recovery lost one generation (130nm impact). The ASP recovery ‘wobbled’ in 2007 (memory and MPU price wars). Barring a recession, Future Horizons forecasts that ASPs will recover in 2008 (it has already started).
12 percent growth likely
Future Horizons' 2008 forecast summary and assumptions (as of May 2008) are -- ‘12 percent’ growth -- '10 percent' units / ‘2 percent’ ASP. There may be no global economic recession, although US/UK/Eurozone might wobble -- which they are! No significant inventory correction will probably take place, but there are always Q4>Q1 adjustments, and there's nothing special about that either.
There could be lower fab capacity expansion due to 2007/2008 capex slowdown, which is inevitable and irreversible. There is also a possibility of a more stable memory price erosion -- which means, back to the learning vs. bleeding curve, and prices have since hardened. If the global economy holds, the 2H-08 growth will likely be strong. This, if the capacity, ASP and units are all pulling together, which is said to be happening.
Therefore, Penn feels it is too early to call for a (major) downward revision. Q1 08 was a lot stronger than conventional wisdom feared.
"That’s the rational analysis, but semiconductors aren’t rational. It could just as easily be another single digit growth year," Penn added.
Danger signs to watch out for
So, what are the danger signs one should watch out for? These would be capacity -- it is hard to see how this can spoil 2008, provided unit growth holds up, but there is a need to watch capex. Another factor is demand -- the current IC unit demand is sustainable provided the economy holds up, so there is a need to watch the inventory.
Next comes the economy! The current outlook continues to be uncertain with risks all on the downside. ASPs are the key to recovery, but always the first line of defence. ASPs could still derail 2008, but the trends are encouraging.
What's driving the market?
In semiconductor 7.0 -- or the 7th decade of the transistor revolution, the same things, as always, are driving the market. These are: technology, legislation -- energy saving/conservation and structural -- the relentless analog to digital conversion. All of these are combining to do what the chip industry does best -- enabling something that was previously impossible. Penn contends, "This industry has nowhere near run out of steam!"
New applications continue to drive the market, with automotive, industrial and medical, mobile phones, and PCs and servers, dominating. The PC market is dominating, but going nowhere fast. Mobile phones have become more interesting, but have conflicting priorities. The challenges are: how to protect the existing cost structure and subscriber base and how to add useful and affordable value-add services! Evidently, "chipset suppliers love the high end, market loves the low end."
There is definitely an increasing automotive semiconductor content. A solid annual growth has been prediced (CAGR 2006-11) for vehicles -- 5.5 percent, systems -- 11.5 percent, and semiconductors -- 13.3 percent. Some other new areas are motor control and energy, as well as lighting and photovoltaic, besides medical electronics. Robotics is yet another interesting area.
Key industry issues
It is clear that more chips per wafer equals less cost per chip and more transistors per die equals more functionality. Several billion transistors gives phenomenal design flexibility as well. Considering total ICs and MOS ICs, in the MOS capacity build out by technology node, there has been no change in volume ramp profile despite the hype.
As for the evolution of the technology node, definitely, 45nm is a revolutionary step from 65nm. In all likelihood, 32nm will be a natural evolutionary. However, Penn cautioned that 22nm would be another ‘difficult’ transition!
There is no doubt that 65nm will be tomorrow’s leading-edge workhorse, having the same basic Si gate/SiO2/MOSFET structure. Nevertheless, 45nm will herald a totally different structure -- metal gate/high-k/thin FET/deep trench design, etc. Also, 45nm will herald a new way of system design.
Is fabless right?
Is Fablite a valid option? While there is nothing wrong with being fabless, people are just not sure whether the best starting point is being an IDM. Teamwork has to be perfectly orchestrated as competition is tough.
As for the market share dynamics, the top 10 companies (IDMs) have been losing share. Fabless share has been growing, but it is still relatively small.
Coming to the realities of the foundry market, TSMC's lead is now unassailable. Were it an IDM, it would be No. 2, challenging Intel and passing Samsung. Moving more into design looks inevitable.
Finally, execution, and not technology, is everything! Execution has and will continue to make the difference. Applications (software) will play the role of the key differentiator as well, and it has value. Design is the means to an end, and not the end.
From the chip industry's perspective, the electronics market was traditionally Japan, North America and Western Europe. It now encompasses the entire Asian rim, China, Eastern Europe and India. Far from maturing, the chip industry itself is still in its volatile, high-growth phase, with at least a further 20 years of strong growth in prospect. Penn said, "The underlying growth drivers for chips has never been better."
Back to basics
We started with the need to get back to industry basics. We end in the same way! Stick to basics like:
* Don’t invest in low cost areas just because they are cheap -- they have a habit of becoming high cost tomorrow, plus the hidden extras.
* Don’t make outsourcing decisions just because they are easy -- especially if there’s no way back.
* Don’t make strategic cut-backs just to trim the bottom line -- some decisions, e.g., R&D, take a long time to impact, then it’s too late.
* Stop looking for high volume/high value market niches -- they don’t exist, need to learn how to compete
* Do show strong leadership
* Do have a long-term plan and stick with it -- even if it negatively impacts ‘the next quarter’ balance sheet
* Do show a commitment and determination to succeed
* Do stay focused and resistant to external meddling
* Do execute ruthlessly -- this is the key competitive differentiator)
* Do … just do it with passion -- it’s the passion that makes the difference
According to Malcom Penn, CEO, Future Horizons, we are dealing with a semiconductor industry in 'deep trauma.' He was delivering the company's forecast at the recently held International Electronics Forum (IEF) 2008 in Dubai, predicting a 12 percent growth this year despite signs of a wobbling US economy.Is there a need to get back to the industry basics? “Semiconductors are a peculiar business; the only sane strategy is to bet the company regularly,” once remarked Dr Gordon Moore.
Penn noted that the current industry status is somewhat confused and uncertain. Short-term issues are dominating the agenda.
Longer-term structural trends are unclear. The traditional IDMs are currently going through a mid-life ‘new business model’ identity crisis, and the start-ups are struggling to even reach critical mass! And all of this has been happening amidst intense economic uncertainty
"Now is the time for strong nerves and determination," Penn said. According to him, the underlying industry fundamentals are sound and there is no end in sight to the 'make-lunch-or-be-lunch' ethos.
The emerging economies like India and China have so far been less affected by the financial market's turbulence. In fact, the emerging and developing economies were shifting the global growth dynamics.
Chip industry in best possible shape
A forecast health warning is: IF the global economy collapses, it will take the chip market with it. However, Future Horizons feels that if there is going to be a global economic recession, the chip industry (but not all companies) is in the best shape possible to weather the ensuing storm.
The ASPs are an enigma wrapped up in riddle. The course of ASPs (like love) never runs smooth. Wobbles happen! ASPs are also the perennial (and least understood) industry wild card. ASPs are generally driven by new IC designs, and that takes time (sometimes three to four years). Post-2001, value recovery lost one generation (130nm impact). The ASP recovery ‘wobbled’ in 2007 (memory and MPU price wars). Barring a recession, Future Horizons forecasts that ASPs will recover in 2008 (it has already started).
12 percent growth likely
Future Horizons' 2008 forecast summary and assumptions (as of May 2008) are -- ‘12 percent’ growth -- '10 percent' units / ‘2 percent’ ASP. There may be no global economic recession, although US/UK/Eurozone might wobble -- which they are! No significant inventory correction will probably take place, but there are always Q4>Q1 adjustments, and there's nothing special about that either.
There could be lower fab capacity expansion due to 2007/2008 capex slowdown, which is inevitable and irreversible. There is also a possibility of a more stable memory price erosion -- which means, back to the learning vs. bleeding curve, and prices have since hardened. If the global economy holds, the 2H-08 growth will likely be strong. This, if the capacity, ASP and units are all pulling together, which is said to be happening.
Therefore, Penn feels it is too early to call for a (major) downward revision. Q1 08 was a lot stronger than conventional wisdom feared.
"That’s the rational analysis, but semiconductors aren’t rational. It could just as easily be another single digit growth year," Penn added.
Danger signs to watch out for
So, what are the danger signs one should watch out for? These would be capacity -- it is hard to see how this can spoil 2008, provided unit growth holds up, but there is a need to watch capex. Another factor is demand -- the current IC unit demand is sustainable provided the economy holds up, so there is a need to watch the inventory.
Next comes the economy! The current outlook continues to be uncertain with risks all on the downside. ASPs are the key to recovery, but always the first line of defence. ASPs could still derail 2008, but the trends are encouraging.
What's driving the market?
In semiconductor 7.0 -- or the 7th decade of the transistor revolution, the same things, as always, are driving the market. These are: technology, legislation -- energy saving/conservation and structural -- the relentless analog to digital conversion. All of these are combining to do what the chip industry does best -- enabling something that was previously impossible. Penn contends, "This industry has nowhere near run out of steam!"
New applications continue to drive the market, with automotive, industrial and medical, mobile phones, and PCs and servers, dominating. The PC market is dominating, but going nowhere fast. Mobile phones have become more interesting, but have conflicting priorities. The challenges are: how to protect the existing cost structure and subscriber base and how to add useful and affordable value-add services! Evidently, "chipset suppliers love the high end, market loves the low end."
There is definitely an increasing automotive semiconductor content. A solid annual growth has been prediced (CAGR 2006-11) for vehicles -- 5.5 percent, systems -- 11.5 percent, and semiconductors -- 13.3 percent. Some other new areas are motor control and energy, as well as lighting and photovoltaic, besides medical electronics. Robotics is yet another interesting area.
Key industry issues
It is clear that more chips per wafer equals less cost per chip and more transistors per die equals more functionality. Several billion transistors gives phenomenal design flexibility as well. Considering total ICs and MOS ICs, in the MOS capacity build out by technology node, there has been no change in volume ramp profile despite the hype.
As for the evolution of the technology node, definitely, 45nm is a revolutionary step from 65nm. In all likelihood, 32nm will be a natural evolutionary. However, Penn cautioned that 22nm would be another ‘difficult’ transition!
There is no doubt that 65nm will be tomorrow’s leading-edge workhorse, having the same basic Si gate/SiO2/MOSFET structure. Nevertheless, 45nm will herald a totally different structure -- metal gate/high-k/thin FET/deep trench design, etc. Also, 45nm will herald a new way of system design.
Is fabless right?
Is Fablite a valid option? While there is nothing wrong with being fabless, people are just not sure whether the best starting point is being an IDM. Teamwork has to be perfectly orchestrated as competition is tough.
As for the market share dynamics, the top 10 companies (IDMs) have been losing share. Fabless share has been growing, but it is still relatively small.
Coming to the realities of the foundry market, TSMC's lead is now unassailable. Were it an IDM, it would be No. 2, challenging Intel and passing Samsung. Moving more into design looks inevitable.
Finally, execution, and not technology, is everything! Execution has and will continue to make the difference. Applications (software) will play the role of the key differentiator as well, and it has value. Design is the means to an end, and not the end.
From the chip industry's perspective, the electronics market was traditionally Japan, North America and Western Europe. It now encompasses the entire Asian rim, China, Eastern Europe and India. Far from maturing, the chip industry itself is still in its volatile, high-growth phase, with at least a further 20 years of strong growth in prospect. Penn said, "The underlying growth drivers for chips has never been better."
Back to basics
We started with the need to get back to industry basics. We end in the same way! Stick to basics like:
* Don’t invest in low cost areas just because they are cheap -- they have a habit of becoming high cost tomorrow, plus the hidden extras.
* Don’t make outsourcing decisions just because they are easy -- especially if there’s no way back.
* Don’t make strategic cut-backs just to trim the bottom line -- some decisions, e.g., R&D, take a long time to impact, then it’s too late.
* Stop looking for high volume/high value market niches -- they don’t exist, need to learn how to compete
* Do show strong leadership
* Do have a long-term plan and stick with it -- even if it negatively impacts ‘the next quarter’ balance sheet
* Do show a commitment and determination to succeed
* Do stay focused and resistant to external meddling
* Do execute ruthlessly -- this is the key competitive differentiator)
* Do … just do it with passion -- it’s the passion that makes the difference
Thursday, 24 April 2008
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."
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."
Tuesday, 22 April 2008
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."
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."
Monday, 24 December 2007
Semicon outlook 2008: Global market likely to grow 6-11 percent amid recession fears
While a majority of analysts at a recent panel discussion on global semiconductor outlook predicted semiconductor growth in the range of 6-11 percent during 2008, some other panelists predicted 2008 to be flat year or a year of negative growth.
There were fears of a possible recession in 2008, along with concerns surrounding consumer spend that could be hit by higher oil prices and the US mortgage crisis.
This panel discussion was organized last week by Semiconductor International, USA. Here is the full report.
Semi forecasts mixed for 2008
Amid concerns of a possible recession in the US economy in 2008, analysts at a recent Webcast hosted by Semiconductor International, were divided in their forecasts for the coming year. A majority predicted semiconductor growth to be in the range of 6-11 percent during 2008, while some others predicted 2008 to be flat year or a year of negative growth.
Anne Craib, director of Market Research, International Affairs and Finance, Semiconductor Industry Association (SIA), said the global economic situation needed to be factored in, as well as its impact on consumer demand.
She said: "Semiconductor demand is driven over 50 percent by consumer demand currently. That is something we should increasingly be aware of. Areas like gas prices and the home mortgage market are things that we previously would not have paid much attention to that we have had to take into account in our forecasting this cycle.” She was confident of the semiconductor industry reaching 7-8 percent CAGR during 2008.
Steve Szirom, President, InsideChips.com, added that many economists were predicting recession in 2008. He said: "The demand-supply balance should be somehwat better than this year. We may have a demand driven recession." He adopted a pessimistic view for 2008, predicting -8 percent growth.
DRAM weak, NAND bright
Gary Grandbois, principal analyst for iSuppli Corp., noted: “We have reduced our forecast to 7.5 percent for 2008 and think it might go lower than that. We think it’s going to be a negative first half. Certainly in the DRAM area, it’s looking very poor. We think it will improve in the second half, almost mirroring 2007, but giving us a far weaker year in 2008 than we’ve expected.”
Richard Gordon, Managing Vice President, Semiconductors, Gartner Dataquest Research, agreed with Grandbois, adding that DRAM would see a negative side in 2008. "Our forecast is 6 percent for 2008, and it doesn't factor in the US recession," he said.
While the DRAM market has been predicted to be negative next year, analysts see a positive market for NAND in 2008. New applications, such as WUSB (wireless USB), increase in cell phones, higher content in portable media players, etc., are likely to drive growth.
Commenting further on the outlook for 2008, Moshe Handelsman, President, Advanced Forecasting Inc., noted that 2007 would be the peak of current IC cycle. "From that point on, the underlying demand for semiconductors will decline and decline in 2008. We are negative about 2008," he added.
Carl Johnson, Executive Director, Research Infrastructure, concurred that the industry had become much more global. "We now have to look at the mortgage debacle, etc. Consumers will be very tight in first half of this year." He added, "I would say, next year's going to be flat."
Mike Cowan, an independent semiconductor industry analyst, said the growth would be about 8.15 percent during 2008. "The dynamics of the market and the industry will change month-to-month as well," he quipped.
Capex likely to dip in 2008
Regarding capex in 2008, Carl Johnson of Research Infrastructure, expects the next year to be bumpy as far as capital spending is concerned. "We're in a downturn right now. Foundries, who are investing lot more money in older process generations, and that is a function of some of the other older IDMs and fabs, are actually shutting down and saying, 'we can go over to the foundries and process wafers for less than what we can do it on our own'. We are seeing lot of consolidation within the fab space. Mid-level players are consolidating. The customer base is clearly narrowing."
The cost of designing some of these leading-edge devices, and getting them to market, and then following it up with another product, if you don't want to be a one-product guy, is a real challenge. That is limiting the number of players that are going into the mega fabs. So, the field is narrowing in 65nm, and 45nm, and as we get to below 45nm, the field is going to get much, much narrower.
According to him, capital spending is likely to be down in 2008. "I am predicting 10 percent down next year. There's also going to be a great consolidation in the devices manufacturing community, and also in the capital equipment community. We are seeing a number of M&A activities in the capital equipment business. It will also go into the supply chain business."
Gartner's Richard Gordon said the research firm was forecasting capex to be down by -15 percent in capex in 2008, and that includes -30 percent in the DRAM sector. He added: "Looking at the individual companies in the DRAM space, I won't be surprised to see that go even lower. So, -15 percent in capex can get even worse as 2008 unfolds. We will see it coming back. But, it will take a while for demand to catch up with supply."
EDA industry in catch-up mode
The EDA industry is said to be lagging behind the semiconductor industry at the moment, and is in the catch-up mode, according to Gary Smith, President, Gary Smith EDA.
Commenting on the outlook for the EDA market, Smith said the EDA industry is in a lttile unusual position. He said: "The market's been flat for the past four years. Tools for 65nm, 45nm silicon design have also been delayed." The R&D was not put in because of the recession. "Right now, we are in a position of lag in the market," he added.
EDA tools cover two process generations. The industry is just starting to introduce 65nm and 45nm tools. That generation is being called the DFM generation tool. Smith said: "It is even more important to the semiconductor industry as we run into manufacturing problems that they are relying on design tools to solve, rather than on semiconductor equipment." That's a major shift in the market!
EDA to grow 7.8 percent in 2008
According to him, the industry is now now into a pretty good growth area. "We were 11 percent last year, 10.2 percent to come in this year. We will be a bit down next year at 7.8 percent," he forecast. This has been attributed mainly to the EDA industry's lag in the market. "Some are moving to 32nm. And certainly, a lot of work is being done in 45nm," he added.
Smith noted: "The EDA industry is in the catch-up mode. We will lag them. We are expecting the downturn to really hit us in 2009. However, we are not an industry that goes negative often. No matter what you guys do, you still have to design something. So, when you go into recession, typically, the way you get out of recession is you generally design your way out!"
DFM, ESL growth drivers
Among the growth drivers is the DFM (design for manufacturing) issue, which is increasingly getting more complex. There is said to be a move to restrict the design rules that is in place now for 45nm. "We are going to see major changes in 32nm; that'll have impact on tools," he added.
The other issue is parallel computing that has become a major task for the EDA industry. "With signal threading, we can no longer handle designs over 100 million gates. Of course, at 45nm, you can do a 100mn gates. That rewriting process is another issue that is also slowing out down. That's a full three-year re-write," Smith said.
Further, EDA is also starting to move up into the ESL. The electronic-system level (ESL) is going to shift the EDA market more into the systems market, and serve less on its dependency on the semiconductor world.
New fabs in India, China
There have been a lot of announcements made regarding new fabs, especially in places such as India, China and Brazil.
Gary Grandbois at iSuppli said: "Brazil is a better example. India just announced that they are building new fabs. What we saw at the turn of the century is that the industry split into two areas -- one traditional components manufacturer and second is the SoC manufacturer. Those are the companies that need leading edge fabs."
According to him, the cost of R&D was going out of sight for process development. "We're also seeing consolidation of research groups. We expect that come down to five consortiums or less. All companies can afford do their own process development once the basic process has been developed."
There are going to be different types of fabs. With globalization, lot of countries may decide they want to have a fab. Brazil announced one. "You're going to see them all over the world. The market's going to change," he added.
Anne Craib from the Semiconductor Industry Association said: "If you look at the cost structure, it costs over $1bn to build and operate a fab in the US. The question is where is the fab going to be located? The US companies will continue to be major players. Again, the question is: where is it going to be economically feasible? The interest is outside of the US."
New elements likely in 32nm
On the subject of integration of MEMS, 3D, etc., Carl Johnson from Research Infrastructure said, "A very large topic with the design community is big change in computer architecture -- the big change is the multicore -- that's the biggest driver now."
Jim Feldhan, President, Semico Research Corp., noted that the industry is going to hit limits with silicon processing at some point of time. "We have to bring in new elements. In 32nm, there'll be only a handful of companies who can push real hard there and can afford it."
Push to 450mm fabs unlikely?
Finally, is there be going to be a push to 450mm fabs and how's the impact going to be like?
iSuppli's Gary Grandbois, said that curently the industry was expecting that it would need to abandon silicon in 2020. "If we don't have any silver bullets by then, we are going to use nano stuff to augment CMOS. We don't know what that's going to be."
He added: The issue is: are we going to use silicon at all in 2020? If we start developing equipment for 450mm, we're not going to have that very soon. What they have to consider, what is the payback for that move?"
We would love to hear from you on how you see the semiconductor industry going in 2008.
There were fears of a possible recession in 2008, along with concerns surrounding consumer spend that could be hit by higher oil prices and the US mortgage crisis.
This panel discussion was organized last week by Semiconductor International, USA. Here is the full report.
Semi forecasts mixed for 2008
Amid concerns of a possible recession in the US economy in 2008, analysts at a recent Webcast hosted by Semiconductor International, were divided in their forecasts for the coming year. A majority predicted semiconductor growth to be in the range of 6-11 percent during 2008, while some others predicted 2008 to be flat year or a year of negative growth.
Anne Craib, director of Market Research, International Affairs and Finance, Semiconductor Industry Association (SIA), said the global economic situation needed to be factored in, as well as its impact on consumer demand.
She said: "Semiconductor demand is driven over 50 percent by consumer demand currently. That is something we should increasingly be aware of. Areas like gas prices and the home mortgage market are things that we previously would not have paid much attention to that we have had to take into account in our forecasting this cycle.” She was confident of the semiconductor industry reaching 7-8 percent CAGR during 2008.
Steve Szirom, President, InsideChips.com, added that many economists were predicting recession in 2008. He said: "The demand-supply balance should be somehwat better than this year. We may have a demand driven recession." He adopted a pessimistic view for 2008, predicting -8 percent growth.
DRAM weak, NAND bright
Gary Grandbois, principal analyst for iSuppli Corp., noted: “We have reduced our forecast to 7.5 percent for 2008 and think it might go lower than that. We think it’s going to be a negative first half. Certainly in the DRAM area, it’s looking very poor. We think it will improve in the second half, almost mirroring 2007, but giving us a far weaker year in 2008 than we’ve expected.”
Richard Gordon, Managing Vice President, Semiconductors, Gartner Dataquest Research, agreed with Grandbois, adding that DRAM would see a negative side in 2008. "Our forecast is 6 percent for 2008, and it doesn't factor in the US recession," he said.
While the DRAM market has been predicted to be negative next year, analysts see a positive market for NAND in 2008. New applications, such as WUSB (wireless USB), increase in cell phones, higher content in portable media players, etc., are likely to drive growth.
Commenting further on the outlook for 2008, Moshe Handelsman, President, Advanced Forecasting Inc., noted that 2007 would be the peak of current IC cycle. "From that point on, the underlying demand for semiconductors will decline and decline in 2008. We are negative about 2008," he added.
Carl Johnson, Executive Director, Research Infrastructure, concurred that the industry had become much more global. "We now have to look at the mortgage debacle, etc. Consumers will be very tight in first half of this year." He added, "I would say, next year's going to be flat."
Mike Cowan, an independent semiconductor industry analyst, said the growth would be about 8.15 percent during 2008. "The dynamics of the market and the industry will change month-to-month as well," he quipped.
Capex likely to dip in 2008
Regarding capex in 2008, Carl Johnson of Research Infrastructure, expects the next year to be bumpy as far as capital spending is concerned. "We're in a downturn right now. Foundries, who are investing lot more money in older process generations, and that is a function of some of the other older IDMs and fabs, are actually shutting down and saying, 'we can go over to the foundries and process wafers for less than what we can do it on our own'. We are seeing lot of consolidation within the fab space. Mid-level players are consolidating. The customer base is clearly narrowing."
The cost of designing some of these leading-edge devices, and getting them to market, and then following it up with another product, if you don't want to be a one-product guy, is a real challenge. That is limiting the number of players that are going into the mega fabs. So, the field is narrowing in 65nm, and 45nm, and as we get to below 45nm, the field is going to get much, much narrower.
According to him, capital spending is likely to be down in 2008. "I am predicting 10 percent down next year. There's also going to be a great consolidation in the devices manufacturing community, and also in the capital equipment community. We are seeing a number of M&A activities in the capital equipment business. It will also go into the supply chain business."
Gartner's Richard Gordon said the research firm was forecasting capex to be down by -15 percent in capex in 2008, and that includes -30 percent in the DRAM sector. He added: "Looking at the individual companies in the DRAM space, I won't be surprised to see that go even lower. So, -15 percent in capex can get even worse as 2008 unfolds. We will see it coming back. But, it will take a while for demand to catch up with supply."
EDA industry in catch-up mode
The EDA industry is said to be lagging behind the semiconductor industry at the moment, and is in the catch-up mode, according to Gary Smith, President, Gary Smith EDA.
Commenting on the outlook for the EDA market, Smith said the EDA industry is in a lttile unusual position. He said: "The market's been flat for the past four years. Tools for 65nm, 45nm silicon design have also been delayed." The R&D was not put in because of the recession. "Right now, we are in a position of lag in the market," he added.
EDA tools cover two process generations. The industry is just starting to introduce 65nm and 45nm tools. That generation is being called the DFM generation tool. Smith said: "It is even more important to the semiconductor industry as we run into manufacturing problems that they are relying on design tools to solve, rather than on semiconductor equipment." That's a major shift in the market!
EDA to grow 7.8 percent in 2008
According to him, the industry is now now into a pretty good growth area. "We were 11 percent last year, 10.2 percent to come in this year. We will be a bit down next year at 7.8 percent," he forecast. This has been attributed mainly to the EDA industry's lag in the market. "Some are moving to 32nm. And certainly, a lot of work is being done in 45nm," he added.
Smith noted: "The EDA industry is in the catch-up mode. We will lag them. We are expecting the downturn to really hit us in 2009. However, we are not an industry that goes negative often. No matter what you guys do, you still have to design something. So, when you go into recession, typically, the way you get out of recession is you generally design your way out!"
DFM, ESL growth drivers
Among the growth drivers is the DFM (design for manufacturing) issue, which is increasingly getting more complex. There is said to be a move to restrict the design rules that is in place now for 45nm. "We are going to see major changes in 32nm; that'll have impact on tools," he added.
The other issue is parallel computing that has become a major task for the EDA industry. "With signal threading, we can no longer handle designs over 100 million gates. Of course, at 45nm, you can do a 100mn gates. That rewriting process is another issue that is also slowing out down. That's a full three-year re-write," Smith said.
Further, EDA is also starting to move up into the ESL. The electronic-system level (ESL) is going to shift the EDA market more into the systems market, and serve less on its dependency on the semiconductor world.
New fabs in India, China
There have been a lot of announcements made regarding new fabs, especially in places such as India, China and Brazil.
Gary Grandbois at iSuppli said: "Brazil is a better example. India just announced that they are building new fabs. What we saw at the turn of the century is that the industry split into two areas -- one traditional components manufacturer and second is the SoC manufacturer. Those are the companies that need leading edge fabs."
According to him, the cost of R&D was going out of sight for process development. "We're also seeing consolidation of research groups. We expect that come down to five consortiums or less. All companies can afford do their own process development once the basic process has been developed."
There are going to be different types of fabs. With globalization, lot of countries may decide they want to have a fab. Brazil announced one. "You're going to see them all over the world. The market's going to change," he added.
Anne Craib from the Semiconductor Industry Association said: "If you look at the cost structure, it costs over $1bn to build and operate a fab in the US. The question is where is the fab going to be located? The US companies will continue to be major players. Again, the question is: where is it going to be economically feasible? The interest is outside of the US."
New elements likely in 32nm
On the subject of integration of MEMS, 3D, etc., Carl Johnson from Research Infrastructure said, "A very large topic with the design community is big change in computer architecture -- the big change is the multicore -- that's the biggest driver now."
Jim Feldhan, President, Semico Research Corp., noted that the industry is going to hit limits with silicon processing at some point of time. "We have to bring in new elements. In 32nm, there'll be only a handful of companies who can push real hard there and can afford it."
Push to 450mm fabs unlikely?
Finally, is there be going to be a push to 450mm fabs and how's the impact going to be like?
iSuppli's Gary Grandbois, said that curently the industry was expecting that it would need to abandon silicon in 2020. "If we don't have any silver bullets by then, we are going to use nano stuff to augment CMOS. We don't know what that's going to be."
He added: The issue is: are we going to use silicon at all in 2020? If we start developing equipment for 450mm, we're not going to have that very soon. What they have to consider, what is the payback for that move?"
We would love to hear from you on how you see the semiconductor industry going in 2008.
Thursday, 20 December 2007
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.
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.
Saturday, 24 November 2007
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 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.
Sunday, 18 November 2007
Is the timing right for having fabs in India?
Several majors have announced their Fab-lite strategies, and so, IDMs will become likely become fabless units of tomorrow. In this scenario, is the timing for setting up fabs in India right? What is the direction ahead for the Indian semiconductor industry?
Commenting on the upcoming fabs in India, Anil Gupta, MD, India Operations, ARM, said: "Yes, we do need the fabs to complete the ecosystem. The question is: Is the timing right? We have our own strengths. Why not capitalize on those?"
It is important to determine what India is doing as part of the global semiconductor industry. "What are we doing as an industry? Fabs are definitely a good idea. We also need to address things like -- can we make products and more importantly, should we make products!"
Gupta pointed out Infineon, NXP, etc., had announced Fab-Lite strategies. Even Texas Instruments was moving to a Fab-Lite strategy. "IDMs are going to be the fabless units of today and tomorrow," he added.
Coming back to the point of manufacturing products in India, he said: "We need to be able to conceptualize products for the mass market. Are we willing to take the risks? With services, the risks are significantly lesser. Companies are innovating on their service models. On the product side, India should do that as well. Maybe, we will do it too."
As for the industry growth drivers, consumer applications would become even more atractive. "There are mobile phones, gaming applications and others, which will drive growth," he said.
Yield management crucial
According to Gupta, yield management is crucial. While designers are well aware of yield management, the adequate tools are not yet there in place. The direct link
has yet to be established for implementing DFM/DFY technique.
Designers are always looking to prove how to improve yield. It is critical for designers to have access to the relevant information that would indicate that, say, some modification in design would lead to 10 percent increase in yield. Gupta said, "As much as we move to 45nm, to 32nm to 22nm and so on, the problems are going to become more complex and magnify."
SOI addresses power, performance scaling issues
There is the silicon-on-insulator technology or SOI. SOI is said to improve power consumption, reduces leakage and allows better performance. Implementation of SOI technology is one of several manufacturing strategies employed to allow continued miniaturization of microlectronic devices.
ARM acquired SOISIC, a leading company in physical IP based on SOI technology last year. The move has enabled ARM to strengthen its physical IP portfolio by adding SOI technology.
"SOISIC's niche is in developing SOI based IPs," Gupta added. SOI addresses the power and performance scaling issues associated with traditional bulk CMOS processes as they migrate to ever-smaller geometries. "It is very clear that design starts for 45nm - 32nm - 22nm etc. will be very low. Each process geometry has to give returns," Gupta added.
Role of IPs
So what's the role of IP in the gameplan? ARM is trying to enable that on technology side with SOI and bulk CMOS. He noted: "You need building blocks to make things happen faster. From an IP perspective, analog IP is very, very closely tied to the process. In that respect, IP has a huge role to play."
The semiconductor IP is said to be a $1.5 billion market. ARM currently has 30 percent share of that market.
From an Indian perspective, there are Indian companies who are building and also re-using IPs, as does ARM. However, ARM also has royalties for its IPs. On usage, Gupta said that physical IPs had greater challenges regarding re-use.
Mali55, Mali200 from India
Commenting on ARM's India operations, Gupta said ARM India develops physical IPs, processors, etc. "There's so much of verification and testing involved to make things work," he added. ARM India currently has a workforce of 300+.
ARM India has done work on 65nm as well as physical IPs for 45nm. "We are also doing studies on 32nm," added Gupta. ARM India released the Mali55 and Mali200 processors.
The ARM Mali200 graphics processor unit (GPU) delivers 3D graphics for next-generation mobile games on smartphones and other high-end portable devices. With a very small footprint, the ARM Mali55 processor brings rich 3D graphics capabilities to low-cost feature phones for the first time.
Besides these, a lot of software -- embedded, drivers, stacks, etc., are being developed in India. ARM India also provides lot of support for various design implementations. "We have over 2,000 ARM certified professionals in Bangalore alone and over 7,000 in India," he said.
ARM India has two other programs. Companies like HCL, Sasken, Mindtree, Wipro, etc., are ARM approved design centers (ADCs) or partners. "If we have any new product, we ensure that our partners become acquainted with those," said Gupta. The other program is the ATC (training). Cranes Software is ARM's approved ATC.
Commenting on the upcoming fabs in India, Anil Gupta, MD, India Operations, ARM, said: "Yes, we do need the fabs to complete the ecosystem. The question is: Is the timing right? We have our own strengths. Why not capitalize on those?"
It is important to determine what India is doing as part of the global semiconductor industry. "What are we doing as an industry? Fabs are definitely a good idea. We also need to address things like -- can we make products and more importantly, should we make products!"
Gupta pointed out Infineon, NXP, etc., had announced Fab-Lite strategies. Even Texas Instruments was moving to a Fab-Lite strategy. "IDMs are going to be the fabless units of today and tomorrow," he added.
Coming back to the point of manufacturing products in India, he said: "We need to be able to conceptualize products for the mass market. Are we willing to take the risks? With services, the risks are significantly lesser. Companies are innovating on their service models. On the product side, India should do that as well. Maybe, we will do it too."
As for the industry growth drivers, consumer applications would become even more atractive. "There are mobile phones, gaming applications and others, which will drive growth," he said.
Yield management crucial
According to Gupta, yield management is crucial. While designers are well aware of yield management, the adequate tools are not yet there in place. The direct link
has yet to be established for implementing DFM/DFY technique.
Designers are always looking to prove how to improve yield. It is critical for designers to have access to the relevant information that would indicate that, say, some modification in design would lead to 10 percent increase in yield. Gupta said, "As much as we move to 45nm, to 32nm to 22nm and so on, the problems are going to become more complex and magnify."
SOI addresses power, performance scaling issues
There is the silicon-on-insulator technology or SOI. SOI is said to improve power consumption, reduces leakage and allows better performance. Implementation of SOI technology is one of several manufacturing strategies employed to allow continued miniaturization of microlectronic devices.
ARM acquired SOISIC, a leading company in physical IP based on SOI technology last year. The move has enabled ARM to strengthen its physical IP portfolio by adding SOI technology.
"SOISIC's niche is in developing SOI based IPs," Gupta added. SOI addresses the power and performance scaling issues associated with traditional bulk CMOS processes as they migrate to ever-smaller geometries. "It is very clear that design starts for 45nm - 32nm - 22nm etc. will be very low. Each process geometry has to give returns," Gupta added.
Role of IPs
So what's the role of IP in the gameplan? ARM is trying to enable that on technology side with SOI and bulk CMOS. He noted: "You need building blocks to make things happen faster. From an IP perspective, analog IP is very, very closely tied to the process. In that respect, IP has a huge role to play."
The semiconductor IP is said to be a $1.5 billion market. ARM currently has 30 percent share of that market.
From an Indian perspective, there are Indian companies who are building and also re-using IPs, as does ARM. However, ARM also has royalties for its IPs. On usage, Gupta said that physical IPs had greater challenges regarding re-use.
Mali55, Mali200 from India
Commenting on ARM's India operations, Gupta said ARM India develops physical IPs, processors, etc. "There's so much of verification and testing involved to make things work," he added. ARM India currently has a workforce of 300+.
ARM India has done work on 65nm as well as physical IPs for 45nm. "We are also doing studies on 32nm," added Gupta. ARM India released the Mali55 and Mali200 processors.
The ARM Mali200 graphics processor unit (GPU) delivers 3D graphics for next-generation mobile games on smartphones and other high-end portable devices. With a very small footprint, the ARM Mali55 processor brings rich 3D graphics capabilities to low-cost feature phones for the first time.
Besides these, a lot of software -- embedded, drivers, stacks, etc., are being developed in India. ARM India also provides lot of support for various design implementations. "We have over 2,000 ARM certified professionals in Bangalore alone and over 7,000 in India," he said.
ARM India has two other programs. Companies like HCL, Sasken, Mindtree, Wipro, etc., are ARM approved design centers (ADCs) or partners. "If we have any new product, we ensure that our partners become acquainted with those," said Gupta. The other program is the ATC (training). Cranes Software is ARM's approved ATC.
Friday, 2 November 2007
Indian hardware policy to address infrastructure issues
Following the success of India's semiconductor policy, the government of India is well on its way to announce a new hardware manufacturing policy, hopefully sometime this month.
According to M. Madhavan Nambiar, Additional Secretary, Ministry of Communications & Information Technology, Department of Information Technology, the hardware policy should be coming shortly, where, the government is looking to address infrastructure related issues.
Speaking with him on the sidelines of the Thought Leader Series organized by the India Semiconductor Association (ISA), he said the hardware policy would still take some time. "As a part of it, we are looking at IT investment regions." These would be set up in 40km areas, and each region would be an entire ecosystem in itself.
Nambiar added: "We are also looking at very good public-private partnerships. We have to develop the manpower." The Department is working with the Labour Ministry and other organizations in order to set up skill development units. It is necessary for skiils to keep pace with technology.
The to-be-announced hardware policy will also be looking at taxes, etc. "It is a recommendation that we are making," he said. "For India to be able to attract investments, we nust ensure that we are the best in class."
Touching upon the semiconductor policy, he said it was important that this policy was pro-active and friendly. "We need to see how best to provide comfort levels to those investing," Nambiar said.
It was necessary to have a strong semiconductor industry in India, as all leading countries, such as the USA, China, Taiwan and Japan had equally strong semiconductor industries. There has since been lot of interest in fabs and ecosystem units, and some of those were in the process of being set up.
According to M. Madhavan Nambiar, Additional Secretary, Ministry of Communications & Information Technology, Department of Information Technology, the hardware policy should be coming shortly, where, the government is looking to address infrastructure related issues.
Speaking with him on the sidelines of the Thought Leader Series organized by the India Semiconductor Association (ISA), he said the hardware policy would still take some time. "As a part of it, we are looking at IT investment regions." These would be set up in 40km areas, and each region would be an entire ecosystem in itself.
Nambiar added: "We are also looking at very good public-private partnerships. We have to develop the manpower." The Department is working with the Labour Ministry and other organizations in order to set up skill development units. It is necessary for skiils to keep pace with technology.
The to-be-announced hardware policy will also be looking at taxes, etc. "It is a recommendation that we are making," he said. "For India to be able to attract investments, we nust ensure that we are the best in class."
Touching upon the semiconductor policy, he said it was important that this policy was pro-active and friendly. "We need to see how best to provide comfort levels to those investing," Nambiar said.
It was necessary to have a strong semiconductor industry in India, as all leading countries, such as the USA, China, Taiwan and Japan had equally strong semiconductor industries. There has since been lot of interest in fabs and ecosystem units, and some of those were in the process of being set up.
Monday, 17 September 2007
Challenges of selling used equipment in global secondary market
The recently concluded SEMICON TAIWAN had a very interesting session on: The Challenges of Selling Used Equipment in Global Secondary Market, by Michael Mihin, Global Account Manager, Broadway Engineering Services Teams Inc. (BEST).
According to Mihin, there are about 600 IC fabs worldwide in 2007 -- 47 in Taiwan, 42 in China, 35 in Korea, 19 in Southeast Asia, and 28 in rest of world, 182 in Japan, 89 in Europe and 158 in the USA. As a result, the challenges posed by used equipment exists worldwide.
Mihin put down these challenges as -- rebuilding OEM equipment to capabilities equal to OEM specifications; supplier response at factory location instead of single country location; providing capacity at a lower cost with recycled equipment; and project revenue to support local resources in country with fab locations.
As for the benefits meeting these challenges, those are said to be extending life of tools by refurbishing, lowering cost of ownership, local contact for warranty and maintenance, parts support with local partners, out of country tech support within 48 hours, and partnering with local resources to meet fab requirements.
Applications include rebuild company supplies refurbished tool, fab supplies tool and rebuild company refurbishes tool onsite at fab, rebuild company changes chambers on in fab tool to reflect new process requirement, and rebuild company supplies refurbished chambers and fab installs on tool. Time is the issue with 2X the time in fab.
Equipment opportunities exist such as providing refurbished equipment that is capable of meeting new equipment operating specifications, availability of donor tools as market requires, new equipment versus refurbished equipment value analysis, and refurbished parts versus new parts to complete the project.
As for the pricing challenges, these include dealing with refurbished tool that is 30-50 percent less than new, travel costs and expenses without margin adder, software upgrades without margin adder, rebuild field service engineer hourly rate less than OEM, and market price of donor tools influenced by supply and demand.
The 200mm tool supply is increasing, and the refurbish process takes eight to 12 weeks for most tools. Apparently, regional support/alliances are being developed. BEST offers USA phone support Monday to Friday, and parts support in 48 hours from USA.
Concluding, Mihin said that the world was operationally flat. Challenges were being met by alliances and consolidation of service providers. Legacy tool support was moving to certified rebuild companies. Finally, local capabilities were needed to meet language and communication requirements of a fab.
The challenges of selling used equipment could be a challenge in India too, as and when fabs come up, make no mistake.
According to Mihin, there are about 600 IC fabs worldwide in 2007 -- 47 in Taiwan, 42 in China, 35 in Korea, 19 in Southeast Asia, and 28 in rest of world, 182 in Japan, 89 in Europe and 158 in the USA. As a result, the challenges posed by used equipment exists worldwide.
Mihin put down these challenges as -- rebuilding OEM equipment to capabilities equal to OEM specifications; supplier response at factory location instead of single country location; providing capacity at a lower cost with recycled equipment; and project revenue to support local resources in country with fab locations.
As for the benefits meeting these challenges, those are said to be extending life of tools by refurbishing, lowering cost of ownership, local contact for warranty and maintenance, parts support with local partners, out of country tech support within 48 hours, and partnering with local resources to meet fab requirements.
Applications include rebuild company supplies refurbished tool, fab supplies tool and rebuild company refurbishes tool onsite at fab, rebuild company changes chambers on in fab tool to reflect new process requirement, and rebuild company supplies refurbished chambers and fab installs on tool. Time is the issue with 2X the time in fab.
Equipment opportunities exist such as providing refurbished equipment that is capable of meeting new equipment operating specifications, availability of donor tools as market requires, new equipment versus refurbished equipment value analysis, and refurbished parts versus new parts to complete the project.
As for the pricing challenges, these include dealing with refurbished tool that is 30-50 percent less than new, travel costs and expenses without margin adder, software upgrades without margin adder, rebuild field service engineer hourly rate less than OEM, and market price of donor tools influenced by supply and demand.
The 200mm tool supply is increasing, and the refurbish process takes eight to 12 weeks for most tools. Apparently, regional support/alliances are being developed. BEST offers USA phone support Monday to Friday, and parts support in 48 hours from USA.
Concluding, Mihin said that the world was operationally flat. Challenges were being met by alliances and consolidation of service providers. Legacy tool support was moving to certified rebuild companies. Finally, local capabilities were needed to meet language and communication requirements of a fab.
The challenges of selling used equipment could be a challenge in India too, as and when fabs come up, make no mistake.
Sunday, 16 September 2007
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.
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.
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