PDF: 2962 pages, 5.2 MB - Bay Area Council Economic Institute

Global Reach
C: Semiconductors
“When we look at innovation, there are three key ingredients: the right mindset and culture; exposure
to end markets; and the ability to innovate. All three of these vectors have now started to align
in India.”
Jaswinder Ahuja, Vice President, Cadence Design Systems
Key Findings:
• Indian chip industry is focused on design; no fabrication plants are in operation.
• Telecom, electronic payment, and auto and industrial controls dominate the segment.
• Companies partner with universities to train and expand a skilled design workforce.
• Low-power/low-cost chips and photovoltaics drive new business in India and
emerging markets.
Market Overview
As it has continued to grow in size and sophistication, India’s semiconductor sector has been “full
of promise” and “poised for a breakout” for much of this decade. Multinational corporations such
as Texas Instruments and Intel have been in India since the mid-1980s, starting with sales and
support offices and gradually establishing full-scale, “captive” (foreign-owned) design centers.
Semiconductor demand has grown steadily in India’s domestic market—primarily from rapid
expansion in:
• telecommunications, including mobile handsets, base transceiver stations, routers, and
switches;
• smart cards, point of sale terminals, and ATM machines;
• automotive, defense and aerospace electronics; and
• industrial sensors, monitors, actuators and digital signal processors—used in everything
from power plants and factories to medical equipment and “smart" appliances, such as
washing machines, refrigerators, and microwave ovens.
A 2008 study by the India Semiconductor Association (ISA) and the technology research company
IDC estimated the total design services market in India at $6.08 in U.S. dollars in 2007, and
it is expected to grow at a compound annual growth rate (CAGR) of 21.7% to become $10.96
billion by 2010. The total engineering workforce inclusive of VLSI, hardware/board design and
embedded software development was estimated at 130,000 in 2007 and is expected to grow at a
CAGR of 19% reaching 218,800 by 2010.
The chip industry in India today is focused primarily on design. Demand has accelerated for ever
smaller, higher-capacity, lower-power chips, extending into microprocessor-based system-on-a-chip
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