Semiconductor companies home in on south

The recent reports on Advanced Micro Devices Inc and SemIndia's plan to zero in on the southern states for setting up India's first advanced fabrication facility should not have come as a surprise. This is because south India seems to have become a hub for the semiconductor industry in the country.

In fact, according to Poornima Shenoy, president of the India Semiconductor Association (ISA), south India is home to more than 75 per cent of the companies in the semiconductor industry.

"While Bangalore is the foremost contributor to this sector, Hyderabad is also catching up," she adds. Needless to say that ISA is also headquartered in Bangalore.

So, what makes southern India click when it comes to the semiconductor industry? While some believe that it's the emotional attachment to one's home-town, others opine that the established engineering manpower base plays the trick. Supportive state governments and even the herd mentality are some of the other reasons that the industry players feel are responsible for south to become a hub for the semiconductor industry.

Pradip K Dutta, president and managing director of Synopsys (India) Pvt Ltd, which is headquartered in Bangalore, says that many people who moved to the Silicon Valley in the US have their roots in the south.

"So when the Indians living in the US decided to set up their ventures in India, their home-town was the obvious choice," he adds. Synopsys has its design centres in Hyderabad and Bangalore.

Synopsys develops software that companies use to design integrated circuits, field programmable gate arrays and systems-on-chips (SoCs).

"With majority of the semiconductor companies being in the south, more than 50 per cent of our revenues in India come from this region," Dutta says.

This apart, Dutta believes that the south has an advantage of having a large pool of engineering talent. "South carries the image of having an experienced engineering talent pool. So, companies in the semiconductor industry are attracted to the south to capture the talent," he adds.

Harish M, general manager for business development at Texas Instruments (India) Private Limited, reasons that knowledge-based industries are known to cluster in south due to the presence of a large number of engineering colleges. "This helps meet the manpower requirements of companies like ours," he adds.

However, there are companies like STMicroelectronics that have their R&D, design and IP centres in the north as well.

"In the early days, semiconductor companies set up shop in the south for reasons as varied as good weather. And soon others followed suit. We, however, have had no problem with regard to talent availability in the north," Aloknath De, head, telecom unit of Noida-based STMicrelectronics Private Limited, says.