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NI invests in the long term with new Penang facility

Posted: 31 Oct 2012 ?? ?Print Version ?Bookmark and Share

Keywords:National Instruments? Penang? R&D? manufacturing? hiring?

The World Semiconductor Trade Statistics (WSTS) in June forecast a growth of merely 0.4 per cent in 2012 worldwide revenue and hoped for a 7.2 per cent growth in 2013. And while several electronics companies are downsizing this year, National Instruments (NI) appears to be betting on the long term at least in this region.

Discussing the setting up of new facilities in Penang, Malaysia, Chandran Nair, managing director for Southeast Asia at NI, said that this is part of the company's worldwide expansion. Penang will see the set-up of an R&D hub and a manufacturing centre.

Chandran Nair

Nair: We will employ 1,500 staff in the new Penang facility.

"The manufacturing centre does not replace any existing operationit is an expansion," Nair stressed. The significance of this information doesn't go unappreciated in the backdrop of electioneering in the United States, NI's home country.

Nair added that the company chose Penang for its infrastructure and good availability of people. Labour cost was not an issue for NI because the cost of labour is less than three per cent of their overall cost. "So we weren't looking necessarily for the lowest cost location but we were looking for a place where we can get good engineers both for the operational side and for the R&D centre," he said.

"One of the things that are very exciting for me is the R&D growth in the emerging markets," added Victor Mieres, VP of emerging markets, who has recently moved to Singapore. "The two biggest centres are going to be Bangalore and Penang. They are working on global projects but the fact that they closer to the market, they are more aware of the market needs."

We are hiring!
The Penang facility received about $80 million in investment over three-to-four years, according to Nair, and is expected to employ 1,500 staff, of which 400 will be R&D engineers. "We are already aggressively staffing the R&D side," informed Nair, "and we've just started staffing the manufacturing sidewe expect to go live in the next few months."

NI works on Singapore smart grid

The ASEAN region holds new promise for National Instruments as it works with Singapore agencies like A*Star and the universities, who are looking at using the FPGA-based CompactRIO to make their own smart grid controllers and using smart grid analysers. Another aspect of the work is using the company's tools to simulate the grid itself because Singapore would want to take into account different kinds of generation capabilitieswind, hydro and fuel cells.

"Currently there are some companies in the world that do it, but they are closed systems and their researchers cannot add their own algorithms to into those black boxes," said Nair. "So they are looking at our tools to have more open simulation from the research side. From the implementation side, many of the large companies who are in the smart grid area, embed our tools in them," he disclosed.

EDN Asia reported earlier this month on NI's single-board inverter controller for smart grids and the company's demo of how it envisages its products to work (see NI targets smart grid with FPGA-based control systems).

NI has a global operation of about 6,000 staff. The company's Q2 2012 revenue was about $300 million and last year they hit the billion-dollar mark. Nair added that no industry is more than 15 per cent of their revenue meaning that their exposure to specific industries and risk are spread out.

Responding to a question from EE Times Asia, Nair said that Penang has both manufacturing and R&D, while Kuala Lumpur has many semiconductor companies. "At the board level, a lot of the design and manufacturing is done in Penang. Both locations have very good skillsets. But we chose Penang because many of our partners, like Intel, are in Penang. And we use a lot Intel processors for our embedded products, so there's a lot of synergy there."

The company has sales, marketing and applications engineering in both Kuala Lumpur and Penang, and, according to Nair, is fairly active in Johor.

Speaking about application opportunities, Nair said that there is a lot of growth in the wireless and communications segments, both from the telecommunications side and the consumer electronics side, then in semiconductor test and real-time test. Another area NI is focusing on is structural test for infrastructure monitoring.

On the embedded side, programmable logic controllers (PLCs) represent a large market. According to National Instruments, they address that market especially well when you have a large number of analogue and digital signals that need to be monitored and when you have very complex algorithms for the decision-making process in controls.

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