CHIP DESIGN: DESTINATION INDIA

Vinita Gupta
Express Computer

The recent ISA-IDC report found that the total chip design market is expected to surpass $7.37 billion in 2008, with a huge chunk of revenues coming from embedded software, followed by VLSI design and hardware/board design.

Gartner states that the market for third-party chip design services in India is estimated at about $400 million. Ganesh Ramamoorthy, Principal Research Analyst, Gartner, said, “Gartner estimates that the market will grow by 26 percent in 2008, year-on-year. Between 2007 and 2012, we expect third-party chip design services market in India to grow at a CAGR of about 22.3 percent, to reach nearly $830 million by 2012.”

Why India?

Traditionally Taiwan has been the favorite destination for chip designing, but during the last few years, India has also seen the market grow. The availability of a large engineering talent pool and cost advantages as compared to other countries has been one of the key growth drivers for this industry in India.

Dasaradha Gude, MD, AMD India, mentioned that some of the other influencing factors include a strong technical education system, reduced entry barriers, government support in the form of STPI and EOU schemes and a strong IPR framework.

He added, “India is at the forefront of VLSI design owing to the leading, cutting-edge chip design activities taking place in multinational design companies that have large scale engineering operations here. These captive units take advantage of the availability of skilled and low-cost workforce to develop products for global markets. If the same is to be done in their respective countries, the development cost will be at least 300 percent compared to India.”

The main factor is the large availability of talent in the country. “Also, the cost of engineers may have been the reason for companies to move their design operations to India in the past. However, that may not be true in the coming years as salary levels continue to rise for Indian chip engineers,” pointed out Ramamoorthy.

Global slowdown, rising consumption at home

Globally, the semiconductor industry and the worldwide market for semiconductors has matured and appears headed for single digit growth in coming years, compared to the double digit growth of yesteryears. However, the scene in the Indian semiconductor industry is quite different. Rising middle class income levels have created a huge market for semiconductor intensive products and we may see this trend to continue for some more years.

Over the years, most global chip companies have set up their development centers in the country to take advantage of market proximity and the talent pool. India as an emerging semiconductor hub has clearly gone beyond the cost advantage to innovating and creating Intellectual Property (IPs) that is resulting in complete product development.

Kasthuri Jagadeesan, Research Analyst, A&E Practice, Technical Insights, Frost & Sullivan, said, “One of the recent trends seen in this space is that of embedded systems development.”

Moving to 45nm

In a couple of years, lot of designs will shift from the present 90- and 65-nanometer to 45-nanometers.

[Globally companies are contemplating 22-nanometer designs. While 32-nanometer designs are the next step after 45nm, Big Blue is trying to leapfrog the rest of the pack by getting a head start on 22nm. - Editor]

Ganesh said, “The transition to 65nm and 45nm has begun. Indian design service companies are gaining an increasing share of designs in advanced process nodes. Designs in new process nodes bring their own set of challenges with them, but at the same time, as they are cutting-edge, they also result in fatter margins for vendors.”

Jagadeesan believed that the semiconductor integrated circuits (IC) industry is driven by the need for small, low-cost, high performance devices. Increasing demand from the consumer electronics industry and the telecommunications sector and Moore’s Law are all fueling the need for miniaturization and the move towards ever-shrinking form factors. Different types of materials and device configurations are investigated to reduce the size of a chip without compromising on a device’s functionalities.

Mobile vs. desktop processors

Most mobile processors are based on the same design as their desktop counterparts but will have thermal and power properties customized for notebook use, as battery life is one of the primary features that any user looks for before making a purchase decision on a notebook.

Another difference between mobile and desktop processors is with regard to the number of cores. The evolution of multi-core technology has made computing much easier and allows a user to run several applications at the same time without the system malfunctioning or performance issues cropping up. At present, desktop processors have up to four cores, while laptops have two and are just as fast as those found in desktop PCs. Although, laptops have just two cores, these cores are used for advanced multi-tasking, serious gaming and rendering digital media and entertainment.