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

Global Reach
The Cadence Design Contest, begun in 2005, challenges engineering students to submit analog,
mixed signal, and digital design projects, with the winning entry presented at Cadence’s CDNLive!
India conference. Shri Sant Gajanan Maharaj College of Engineering won the first contest, with
subsequent winners representing IIT-Kharagpur and the Indian Institute of Information
Technology (IIIT) Hyderabad.
In a unique cross-border collaboration, Cadence has teamed with UC Santa Cruz (UCSC)
Extension and private technical training firm TTM Institute for Information Technology (TIIT)
to offer the Finishing School Program, a certificate program in VLSI design engineering for
either physical or logic design. To increase India’s pool of specialized, design-aware VLSI
engineers, year-round advanced classes are offered in Bangalore, Hyderabad, and Delhi, using
Cadence EDA tools and UCSC curriculum and course design.
KLA-Tencor Corp. is a San Jose developer of yield management and process control
solutions for the manufacture of semiconductors. Its India presence began in 2000 in
partnership with IT and software services firm HCL technologies. HCL set up a
dedicated development center for KLA-Tencor at its Chennai facility, installing advanced wafer
inspection equipment in its clean room and high-speed data links to KLA-Tencor in the U.S.
Today, the company operates its own captive center in Chennai, employing some 200 workers,
and also contracts with HCL, Wipro, and Infosys for another 500 engineers and programmers.
The work is divided between “core” IP related functions done by the captive center—advanced
motion control, applications engineering, optical calibrations, algorithms, and other basic technology
elements of KLA-Tencor’s product line—and non-core “context” functions done by
partners—user interface development, quality control, look and feel, and back office services,
for example.
KLA-Tencor acknowledges having gone through a learning curve in India, growing out of its
early emphasis on cost arbitrage rather than talent. “Our initial strategy was to have 1,000 engineers
in our captive,” says KLA-Tencor president and managing director Dr. Ashwin Ballal.
“We went there thinking that we could take advantage of the cheap talent pool and be able to
ramp very quickly. That turned out to be more challenging than our expectations and plans. So
we had to change course and strategy.”
Relying on local partners to provide business process support has helped in controlling attrition
and has enabled the company to focus its attentions on core activities. Dr. Ballal confirms that
KLA-Tencor’s India presence today is about the engineering and programming talent pool, and
not just about the cost savings. “There’s only so much talent in the U.S.; if you don’t tap the
talent and human capital of India for software development, you risk falling behind,” he says.
Dr. Ballal adds that companies typically have finite resources to direct toward customized
solutions or new product development, so the ability to outsource some portions of a project
frees the most highly-skilled engineers at home for more advanced work. Finally, he says, “70%
of the KLA-Tencor customer base is in Asia, and the global imperative is strong: if you want to
call yourself a global company, you can’t continue to act only locally.” Dr. Ballal sees continued
strong chip growth for India in the thin-film photovoltaic solar cell market—“India has 300 days
110