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Big investments burnish India's hardware design image

Posted: 24 Sep 2003 ?? ?Print Version ?Bookmark and Share

Keywords:computer? hardware? computer chips? india?

India may not be attracting the same huge investments in semiconductor fabs as neighboring China, but foreign investments in software development activities - ranging from chip designs to databases and business software - easily total more than $2 billion. The country is also beginning to attract investments for hardware design.

Familiar names such as Microsoft, IBM, Hewlett-Packard and Oracle have relied on India's software coders for years, but developers of hardware products, such as Intel Corp. and STMicroelectronics, have been instrumental in tapping India's burgeoning hardware design and development skills.

These companies are at the forefront of India's changeover from a quality, low-cost provider of engineers to a site where product design skills are becoming increasingly available. Such high-profile, high-end designs as Intel's Xeon microprocessor, for instance, which is currently being designed at the Intel India Design Center in Bangalore, were not done in any visible manner until recently in India.

Overseas corporations from the U.S., Europe, and China have established R&D centers in India and are pouring tens of millions into expanding their scope and size. Together, these companies are estimated to have committed $1 billion to India since the U.S. economy started slipping at the beginning of 2001.

Big spenders

The big-ticket investors, committing more than $100 million each, include Cisco Systems, Huawei Technologies, Intel, Royal Philips Electronics and Texas Instruments. In addition, IBM Corp. and Motorola Inc. are said to be planning investments of similar amounts in their operations in various parts of the country.

Meanwhile, a number of suppliers of electronic design automation tools-including Cadence Design Systems, Synopsys, Mentor Graphics, Magma Design Automation and Sequence Design-have invested a total of more than $150 million in this country.

Another batch of chipmakers, including Analog Devices, Cypress Semiconductor, and STMicroelectronics, have been making incremental investments, worth roughly a combined $100 million over the past few years, and are expected to continue in a similar vein.

The importance of such investments can be gauged from the trend, unconfirmed but oft-cited, whereby many overseas venture capital funds decline to fund startups that do not have or plan to have design centers in India.

Intel is at the forefront of companies helping to change India's image as just a low-cost software-programming base. The world's leading chip manufacturer now employs approximately 1,000 engineers in India and has announced plans to more than double that number. Intel India Design Center (IIDC) is the company's only design center working on switches and routers. In the future, IIDC will also develop devices for handheld computing.

"India, with its immense talent pool and technical expertise, is a logical destination for a company like us," said Ketan Sampat, president of Intel India. IIDC "has begun work on next-generation 32-bit processor technology and has done innovative work in chip designing and in developing software for routers and switches."

IIDC's charter, Sampat said, "is to provide leading-edge software solutions that give Intel a competitive advantage in the marketplace." Intel recently announced the formation of its first Asian Centrino Mobile Technology design team, which will be located at IIDC.

Adding to the country's technical skills is the expertise of returning Indian engineers and a more product-oriented focus on the part of the Indian software industry as a whole.

"Design outsourcing [to India] is happening because of value arbitrage and our maturing ecosystem," said T.S. Ushasri, managing director of Force Computers (India) Pvt. Ltd., a Solectron company. "Designing requires knowledge, skills, expertise. Indian engineers provide all of this and additionally have gained tremendous experience while working with leading product companies abroad. The return of many of these engineers and the development of an ecosystem required for product design are propelling this phenomenon." Force employs 100 engineers, most of them designers, in Bangalore.

"Returning engineers from the United States are finding challenging design jobs here," Ushasri said. As evidence, she cited the center's delivery of the ATCA-710, the first commercially available AdvancedTCA single-board computer. With a 1.8-GHz Mobile Pentium 4 processor and support for Carrier Grade Linux, the ATCA-710 is designed for such high-end communications applications as 2.5/3G wireless and broadband wireline nets.

While several international corporations have laid off thousands of workers, they have expanded operations in India-although some are loath to announce such plans now that outsourcing has become a political hot button. At the same time, the investments in India are viewed as preparation for an economic recovery.

"The main reason is time-to-market. The tech industry is slowly gearing up for a turnaround in 2003-04 and a massive anticipated growth in 2005-06," said Srini Rajam, chairman and CEO of Ittiam Systems Pvt. Ltd. "To participate in that growth, companies need new products, which is where India comes into the picture. India is among the top choices today for access to quality intellectual property and/or product development teams."

The 30 global customers that have licensed Ittiam's multimedia and communication technologies are further evidence of the increasing skill level of India's engineers, Rajam said. The company's 802.11a/b/g baseband and media-access control solution has been licensed by customers in Europe, Japan and the United States, he said.

Pradip K. Dutta, managing director of Synopsys India Pvt. Ltd., said the electronics industry's downturn was in part a "catalyst" for investment in India. "Primarily it is the availability of trained manpower in the high-tech domain of silicon design and embedded software that has prompted many of the foreign companies to open offshore development centers in India," Dutta said. "The cost component, at the entry to junior levels, is also very competitive and enables optimal scaling."

Some of the features of Synopsys' leading verification and implementation products "were developed by our team of engineers in Bangalore and Hyderabad," Dutta said.

Among the latest to announce an investment in India was Synopsys' competitor Sequence Design Inc. "India has proven its strength in core research and development. People want to work here and create something - it's the spirit of a startup," said Vic Kulkarni, president and CEO of Sequence.

Even as Sequence announced the opening of a development center in the Indian capital of New Delhi, Kulkarni said the company was considering opening another Indian development center, in Bangalore.

- K.C. Krishnadas

EE Times

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