The Hindu Business Line : KPIT Cummins sets up centre for Renesas

Beefing up development: Mr Kishor Patil (right), CEO and Managing Director, and Mr Hideo Hara, General Manager, System Solution Business Group, Renesas Technology, at a press conference in Bangalore on Tuesday. - G. R. N. Somashekar

Bangalore Oct. 3

KPIT Cummins Infosystems Ltd has set up a dedicated offshore development centre (ODC) to offer design and development services for Japanese semiconductor systems solutions firm, Renesas Technology Corp.

Renesas, a joint venture of Hitachi and Mitsubishi Electric, is an existing top-five client of KPIT Infosystems and accounts for a little less than 10 per cent of the latter's revenues. Renesas provides semiconductor solutions for mobiles, automotive and digital audio and visual products.

"We will increase the number of engineers assigned to the ODC to over 500 by March 2009," said Mr Kishor Patil, CEO, KPIT Cummins Infosystems Ltd. Currently, over 100 KPIT engineers are involved in designing chips and developing software for Renesas. The ODC to be based in Pune and Bangalore would strengthen the design capabilities for Renesas, he said without disclosing the financial details of the deal.

Expansion

Mr Hideo Hara, General Manager of System Solution Business Development division, Renesas, said the company was expanding design outsourcing in India to develop LSI (large scale integration) for various applications and software for system solution.

Mr Girish Wardadkar, President and Executive Director, KPIT, said the company, which has witnessed a compounded annual growth of 66 per cent for the past three years, expects to top the estimated revenue of $100 million in the current year.

Further, Mr Wardadkar said the company was signing new contracts at rates which are 8-10 per cent higher than the existing rates. "The price negotiation with Cummins was currently on and the company was expecting better rates," he said.

As against last years' operating margin of l4.5 per cent, KPIT Cummins would end the current year with OPM of over 16 per cent, he said. The improved margins would be due to better rates, increased utilisation among others, he added.

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