B'lore-based chip makers tailoring products for local market

From designed in India to designed for India.

With demand for semiconductors (variously called chips, integrated circuits or ICs) in the country going up on account of the increased electronics usage, many companies have initiated India-specific IC programmes by partnering local vendors.

Most of the India-specific IC design programmes are happening in Bangalore, which is home to at least 70 per cent of the 130 chip design firms operating in the country.

The India-specific IC incorporates common features keeping the Indian market in mind to power electronic equipment. The main aim of the exercise is to drive down the cost of the equipment at the end-user level.

At present, the electronics items sold in the Indian market comes through global original equipment manufacturers and a few domestic companies who have tied up with vendors at the chip level.

Analog Devices is developing an India-specific integrated circuit for energy meters. The chip is being designed to withstand all weather conditions. It includes intelligent battery modes to sense temperature changes, operates an LCD readout and performs other functions such as supplying voltage reading during power outages. Besides, it is also designed to use 40 per cent less power than other solutions.

Similarly data storage solutions provider Sandisk is developing flash memory for a wide variety of entertainment devices being used in India.

The new ICs to power equipment for the Indian market are being designed by both Indian design companies and captive centres of global firms. Much of the chip design and embedded software work is taking place at the India design centres in Bangalore.

According to the India Semiconductor Association (ISA), the trade body of the semiconductor industry, the top five end-user products expected to drive growth during the forecast period (2007-2009) in India are mobile handsets, desktops and notebooks, GSM base stations, set top boxes and energy meters.

The companies evolving India-specific ICs are targeting these five end-user product categories.

According to the ISA, the country has a huge untapped local market for ICs and related products. Many companies have recognised this importance and launched various programmes to tap the market.

The top four semiconductor products expected to drive revenues for the companies are microprocessors driven by desktops, notebooks and telecom equipment; analog microprocessors driven by mobile phones, monitors and UPSs; memory microprocessors driven by desktops, notebooks, servers and telecom infrastructure equipment; discrete microprocessors driven by TV and audio systems, energy meters and converters, and mobile and telecom infrastructure equipment.

ISA President Poornima Shenoy said: "The total market (TM) revenue for semiconductors in India during 2006 was estimated at $2.69 billion. Telecommunications, IT and Office Automation (IT & OA) and consumer electronics segments contributed to 82.6 per cent to the revenues. The growth of these key user segments is anticipated to catapult semiconductor revenues to $5.49 billion in 2009, growing at a CAGR of 26.7 per cent."

US-based Axiom Design Automation is investing in developing domain expertise for India-specific ICs. It is partnering Manipal University (MCIS) in the domain of ASIC (Application Specific Integrated Circuit) design and verification. "The partnership has evolved the desired results. We are keen on partnering more Indian universities for the India-specific IC programme," said Axiom India MD Ravi Shankar R.

Magma Design Automation has also initiated its India IC design programme. This involves training the existing designers on new technologies to meet present market requirements, enabling them to focus on product innovation by automating IC implementation.

According to IT research and advisory firm Gartner, the total electronic equipment production in India will reach $32 billion in 2011, compared to $14 billion in 2006, a compounded annual growth rate (CAGR) of 18 per cent. Semiconductor consumption in India will more than double from $2.8 billion in 2006 to $7.2 billion in 2011.