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20 October 2008  
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Chip design: Destination India

The availability of skilled talent and cost advantages are the reasons for the growth of chip design services in India, reports Vinita Gupta

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% 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%, to reach nearly $830 million by 2012.”

Why India?

"One of the recent trends seen in the chip designing space is that of embedded systems development"

- Kasthuri Jagadeesan
Research Analyst, A&E "Practice, Technical Insights, Frost & Sullivan

"India is at the forefront of VLSI design owing to the cutting-edge chip design activities taking place at multinational design companies that have large-scale engineering operations here"

- Dasaradha Gude
MD, AMD India

"Indian design service companies are gaining an increasing share of designs in advanced process nodes. Designs in new process nodes bring with them their own set of challenges but at the same time, as they are cutting-edge, they also result in fatter margins for vendors"

- Ganesh Ramamoorthy
Principal Research Analyst, Gartner

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% 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.

He felt that the domestic market would not get much of a boost from the growing Indian chip design service industry. This is primarily because designs that Indian vendors create, mostly cater to international markets.

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.”

According to Ramamoorthy, globally, the number of new design start is declining however, the value of each new design start is increasing. This is mainly due to the continuing trend of system-on-chip integration.

Factors that make India an attractive destination
  • Highly skilled and cost-effective workforce.
  • Respect for Intellectual Property Rights (IPRs): India has a good track record of safeguarding the IPRs of foreign companies, which encourages them to establish design centers in India.
  • Emergence of R&D and design centers of homegrown companies, including software providers like Wipro and TCS.
  • Emergence of start-up design firms.
  • A rise in outsourcing: Asia is the hub for electronic manufacturing services, primarily because of low manufacturing cost and relatively low cost labor, and pressure from consumer electronics/telecommunications industry.

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.

For example, scaling becomes an issue with eDRAMs (embedded Dynamic Random Access Memories) below the 45nm node. However, by using different configuration of eDRAM, such as capacitor-less DRAM, it is possible to scale eDRAM devices below 45 nm. Conventional eDRAM consists of a transistor and a capacitor, but these capacitor-less transistors employ one or two transistors, which can scale down to 22 nm process node.

The one transistor DRAM [1T-DRAM] is known as zero-capacitor RAM [Z-RAM] and the two transistor DRAM [2T-DRAM] is termed as twin transistor RAM [TTRAM]. These capacitor-less devices are fabricated using floating body effect (FBE) silicon on insulator process (SOI) technology rather than bulk CMOS (complementary metal oxide semiconductor) process. This technique reduces power consumption and increases switching speeds compared to bulk CMOS technology.

Challenges that need to be addressed
  • Indian companies need to provide end-to-end services.
  • Infrastructure facilities need to be beefed up.
  • High investment costs for R&D need to come down.
  • Competition from other Asian countries has to be met.
  • Inadequate support from government for the capital-intensive semiconductor industry is affecting feeder segments like chip design.
  • Indian industry is beginning to feel the heat of a talent shortage.

The demand for chip design engineers outstrips current supply. Both the industry and the government need to take initiatives to set things right.

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.

Intel’s chip design in India
Intel India was responsible for the end-to-end design of Intel’s first six-core microprocessor. This is the first time that a microprocessor came to life in a lab in India. Intel had never taken work on 45-nanometer technology outside the US until now. It is also the first time that Intel has released the first design iteration of a chip.

The microprocessor packs 1.9 billion transistors and is smaller than a matchbox. Intel hopes that it will strengthen the company’s position in the enterprise server mart. Until now, both Intel and AMD have been selling dual and quad core chips.

The project came to India about two years ago and finished two months ahead of the schedule. The Intel India team planned and executed the complete design activities, including front-end design, pre-silicon logic validation and back-end design. Intel’s Bangalore facility took care of post-silicon validation, which tests the market readiness and product-performance. The project involved creating a design, optimizing said design to meet all performance and cost targets and finally, a complete simulation of the design.

Source: The Financial Express

“Usually both mobile and desktop processors have a similar design; however there are a few exceptions such as the PUMA platform, which has been designed with notebooks in mind. PUMA comes with the Turion X2 Ultra Dual-Core Mobile Processors, AMD 7-Series chipset, ATI Mobility Radeon HD 3000 Series Graphics and the latest draft 802.11n and 3G wireless technologies,” mentioned Gude.

While there has been an upsurge in Indian manufacturing over the last few years, especially in the telecom, consumer and industrial segments where business has been boosted by sub-contract manufacturing activities, India still has a long way to go in catching up with countries like China and Taiwan that are the manufacturing hot spots in Asia.



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