India-Taiwan tieups in IT can address booming China

Beijing Olympics will create a 350m digital TV market

From digital TVs to cars, a booming Chinese market could be good for the Indian software industry too, say visiting businessmen from the Taiwanese semiconductor industry. How? "Just partner us," they say.

The already booming Chinese economy will get a further boost from the 2008 Olympics which the country will host. The Taiwanese are salivating over the killing a company can make if it can successfully penetrate the TV and set top box market which the Olympics 2008 will create.

Steve C H Lin, a key official from the Industrial Technology Research Institute (ITRI) in Taiwan told Business Standard in an interview, "leading up to the Olympics we expect between 300-400 million digital television (DTV) sets to be sold in China."

Funded by both the government and private industry, the $500 million ITRI , is a system-on-chip (SoC) R&D powerhouse that both incubates technology start-ups and provides R&D services to the semiconductor industry.

SoC involves building on one semiconductor chip a central processing unit, a memory, input and output functions and software intelligence that decides how all these work with each other and the outside world, Lin explained. Taiwan, as a big player in five of the top 10 products that can use SoC, has considerable momentum in systems making.

In the coming years, partnering India could help cut costs by up to 20 per cent. The resulting products will be that much more cost competitive than those with software from the US or Europe, he says.

Lin, a deputy director general of an SoC Technology Centre at ITRI, said in addition to DTVs, both 2.5G and 3G mobile phone handsets, DVD players and telematics for the automobile industry "have very good potential" for collaboration between Indian software firms and Taiwanese product makers.

The Taiwanese, who see plenty of their hardware exported to India, are yet to import Indian software of any significant value.

For instance, "Last year we may have just exported software worth $150,000 to Taiwan," says S Janakiraman, president and CEO of R&D services at Bangalore based IT services firm MindTree Consulting.

But Lin says, "From what we have seen so far (during this visit that concludes in four days), we are impressed with the capabilities of Indian software companies."

They have visited Infosys and Wipro Technologies, the newly-formed Indian Semiconductor Association, and the Indian Institute of Information Technology here.

Other stops on this whistle-stop tour include Satyam, TCS, the IIT, Delhi and more interactions with the Indian software firms' lobby, NASSCOM, which is hosting the Taiwanese during their visit.

What is the market that Indian firms can address? "The integrated circuit design component of our sales last year was an estimated $7.7 billion. This year it is forecast to be some $9.1 billion," Lin says.

Much of this comes from the US, a technology hub called the Abba Centre in Scotland, an SoC-ware centre in Sweden and Israel. Indian firms have opportunities here.

There are challenges also. For instance, the Chinese, in a bid to protect domestic players, are likely to use a modified version of European standards for digital TVs reception from terrestrial, cable and satellite signals.

Two universities "" Ching Hwa and Xiao Thung "" are slugging it out for their own version of the standards to be adopted. And the Taiwanese have barely made an entry into the Chinese TV market, Lin says.

There is excitement as well. For China too, like the Western countries, is determining its own milestones on when to start selling DTVs alongside analog sets and when to phase out the analog versions.

The future also is about movie on demand, programmes on demand and continuity: start a movie in your car, reach home and switch to your mobile phone, reach your living room and switch to your hi-definition TV, all without missing a single scene. Indians may yet build some of the software enabling Taiwanese products to do all this, Lin envisions.