Frost & Sullivan for semiconductor study

For the investor, information is vital and that is exactly what the Indian Semiconductor Association (ISA) is setting out to provide for itself and to the seriously-interested.

ISA has commissioned Frost and Sullivan, a New York-headquartered consultancy, to do a thorough job of finding out where India stands in the world of semiconductors.

The motivation for this seems to be: "We have come this far, but just when the industry should scale up, a remediable but unresolved problem, could cheat us of that growth," as an industry source said.

"See in the US, if you want to know how many burgers were sold in a day, you can find out. But can you tell me how many idlis are sold in a day in this country?"

Well, the Frost and Sullivan study, sponsored by Citigroup, may not exactly be looking at how many semiconductor chips are consumed domestically, but in the perpetually consolidating and cyclical semiconductor business, scale matters. So the big firms want to know what more can be done here, among other things.

The basics, according to most industry insiders, are thus: semiconductor design and other semiconductor-related work exported from India is valued around $1 billion.

Doing this work are roughly 10,000 professionals, mostly engineers, working for about 75 firms clustered in centres like Bangalore, Hyderabad and Noida.

Bangalore, the industry agrees, has the lead in chip design "" playing host to such firms as Insilica, a low profile hi-value fabless chip designer owned by contract manufacturer Flextronics. There are also the tool makers, such as Cadence, which also has a big centre in Noida, and Magma, a smaller but worthy competitor.

Lesser known locally, but equally significant in their presence, are firms like ARM, whose technologies are vital to cell phones for instance and who has bought out a specialist R&D centre here, Artisan, and device interface maker such as Rambus, which recently opened a key development centre here.

Finally, there are the industry leaders here as Intel, Texas Instruments and Philips. All this will point to the building up of an eco-system so vital for any hi-tech work to take off, but there seems to be one small problem: "We are already up against a wall when it comes to scale," says one industry insider.

Quickly finding talented engineers to do VLSI design is not the same as an IT services firm hiring a few thousand eager freshers from a local college. So poaching is rampant, and if the situation doesn't improve, India's fledgling semiconductor industry will not grow and take wings.

Yet, there are several events over the last 18 months pointed to a renewed enthusiasm among those who have contributed to building the fledgling semiconductor base in India, the bulk of it in Bangalore. This is especially so in the case of design.

Philips, resurrecting its Indian chip design team here, shelved due to bad timing in 2001, and Motorola's top technologist herself coming down to announce significant investments here are two examples.

That enthusiastic journey saw a little milestone when several people came together, late last year through early this year, to give a formal name and structure to what was at least a five-year-old informal consultation: "The Indian Semiconductor Association (ISA) is not simply an industry lobby," stressed a Texas Instruments official.

"These are people who have achieved a degree of success and they now want to do something more than expanding their business. And they are doing what they know best: building up a base here for semiconductor work that will be their legacy for the next generation."

Such part altruism part shrewd business moves include the increasing academic interactions the semiconductor industry is setting in place, with schools such as the Centre for Electronic Design Technology in the Indian Institute of Science.

Firms such as Magma, and a much smaller desi competitor, Softjin, have donated software, time and money to help students at IISc and the Indian Institutes of Technology get a first hand feel for what the industry wants.

More promising partnerships are coming up too, such as the one initiated by the Birla Institute of Technology and Science with New York-based Rochester University to set up a teaching lab in IC design here, in a tripartite effort with ISA. All this is bound to help, but is definitely not enough to stem worries over poaching and even moves to "import people".

That has indeed been done, for "there are people of Indian origin who would love a stint here. It is a matter of rotating them," according to a source in one large chip maker that has tried it. "Do you know, more and more college students in the US are asking for a semester in India or an internship in an Indian firm?"

Well, hurray for cultural integration as well, but this particular source was pointing to the kinds of things being tried to keep work going in the chip design firms here. Perhaps Frost and Sullivan, a "growth consultant" will show the way.