The Hindu Business Line : Noida, Hyderabad emerge big centres for chip cos

Size and scope
The segment currently employs about 75,000 people with business of $3 billion and is projected to grow to about $43 billion and potentially employ about 7.8 lakh people.

MS POORNIMA SHENOY

Hyderabad , Dec. 15

Noida and Hyderabad have emerged as two major centres for semiconductor companies following on the strides made by Bangalore, which accounts for a big chunk of them.

Investment-intensive semiconductor start-ups are looking to the global venture capital community for increased investments, according to Ms Poornima Shenoy, President, Indian Semiconductor Association (ISA).

Speaking to Business Line, Ms Shenoy said the ISA has grown to about 120 companies, and now comprises a diverse set that include large semiconductor companies such as Texas Instruments, which has formed the backbone for the sector's growth in Bangalore, followed by a host of start-ups, and includes a fair chunk of IT services providers such as TCS, Wipro and Satyam.

The nature and scale of engagement of some of the IT services companies such as Wipro, TCS and even Satyam in the semiconductor design work is quite large. In fact, a company like Wipro engages over 1,500 designers in Bangalore and Satyam about 1,000.

Ms Shenoy said the segment currently employs about 75,000 people with business of $3 billion and is projected to grow to about $43 billion and potentially employ about 7.8 lakh people. But the Government and the industry need to work collectively to create the necessary manpower to meet such demand surge.

Funding concerns

"One of the areas of concern has been with regard to lack of adequate funding. Typically, a semiconductor start-up requires about $25 million to take its products to market. Though traditional industry players such as Intel, TSMC are active, others such as Xilinx are talking about exclusive India funds, the nature and scope of this engagement needs to be expanded," she said.

Asked about the semiconductor policy, she said "after the Finance Minister announced the move to have a separate policy, we have made significant strides. It is heartening that in less than a year, there was significant crystallisation and after intense debate with industry, the policy now awaits Cabinet nod."

Innovation

There is a lot of hope and expectation around the policy as the semiconductor industry thrives on an appropriate support mechanism, globally.

And there is significant innovation happening in India. For instance, companies like Samsung have customised some of their products such as washing machines for India.

The home-bred electronic voting machine is now going global and so is the case with auto meters.

Nearly 65 per cent of the 130-plus semiconductor companies are based in Bangalore, but Noida, which is home to companies such as Cadence, Freescale and HP, has emerged as a big centre followed by Hyderabad.

The nature of work varies. Of the total semiconductor business, very large scale integration (VLSI) accounts for 18 per cent, board 4 per cent and the rest (78 per cent) is constituted by embedded software design.