'We will focus more on consumer electronics'-STM Microelectronics

NEW DELHI: The $9.85-billion chipmaker STMicroelectronics (ST) is trying to become a 'lighter' company by outsourcing chip manufacturing and concentrating on design of complex and high-end chips for the industry. Theirry Tingaud, corporate vice-president, emerging markets region, STM, was recently in India and shared the company’s plan for India and technology trends for 2008. Excerpts:

What is STMicroelectronics (ST) India strategy?

We have been working on two strategies. One is on the business development side, where there has been significant success in India. And the second is the development of the local design centre. We have 1,800 people in Greater Noida and Bangalore design centers and we expect to ramp up to 3,000 people in over three years. We would look at making ST India a leading design centre outside Europe.

We do different activities at ST India Design center. We have been developing chips for set-top-boxes for DTH/CAS, automotive, telecom etc. We see these areas having a great future over here.

Apart from chips for set-top-boxes, what are the other design tasks that you are doing in India?

We have a variety of applications for telecommunication, on wireless mobile phone, multi-media application processor, automotive chips, printer solutions etc. We develop chips for industrial product application as well. We are working on developing libraries for latest process technologies for example 65- and 45 nanometer (size of etching on silicon wafer). The latest technologies such as 65- and 45-nanometer increase the capability of chips dramatically. We can embed more memory and more processors on the same chip. The capability of overall chip becomes higher.

Recently, ST announced shutting down some of its fabs. Do you believe that chip making is not as important as design?

ST is working on becoming a `lighter’ company in terms of assets — finding the best balance between keeping control over manufacturing of proprietary and leading-edge products and technologies and reducing costs. Our objective is to rapidly increase sourcing from foundries from less than 10% to 15% plus.

The government announced the semiconductor policy some time back. Is it attractive now for ST to set up a fab here?

Setting up any fab unit requires an investment of $2.5 billion-$3 billion. To sustain this investment, one needs to have sales of $2.5 billion to $3 billion a year. At present, the Indian market is much lower than this figure. However, the recent semiconductor policy should fuel electronic manufacturing in India such as LCD panels, solar fabs etc. On the other hand, there is a lot of scope to develop semiconductor related ecosystem in India with universities, mostly on the product development side.

Source : ET

Moschip scouts for acquisitions in US, Europe

Hyderabad-Based Moschip Semiconductor Technology, a fabless technology solutions provider, is scouting for acquisitions in the US and Euproe to enter the home applications segment. The idea is to have a global presence in this segment.

It is targeting acquisitions at this stage to take advantage of the surging rupee vis-a-vis the dollar. The plan is to acquire companies, whose revenues range between $5 million to $50 million.

Moschip is planning to raise money through qualified institutional placement route to fund its inorganic growth plans and is in talks with investors in the US and Europe.

Currently, the promoters hold 25% stake in the company. Another 25% is held by institutional investors and the balance with the public. The company has a development centre in Hyderabad with 125 professionals on its rolls.

“We are looking at acquiring companies, which have good penetration in the original equipment manufacturer marketplace. We are looking at providing solutions for connecting different devices, including TV, video, audio and laptop,” said Moschip CEO & chairman K Ramachandra Reddy. He reckons that acquisition will help the company get a foothold in the $5 billion smart home applications market, which is growing at about 14%. The $6-million company expects to clock over 50% growth to reach $10 million revenues in 2009.

Source :Economic Times

Intel launches programs for Indian embedded-design houses

BENGALURU, India -- Intel Corp. today launched two programs aimed at leveraging its embedded-architecture portfolio. One intends to aid Indian design houses in launching products for the domestic market; the other aims to help them build products for the global market. Called the "India Design House Program," it is similar to a third-party alliance network, and will cash in on the increasingly larger role that design houses here play in platform definition and design for customers locally and overseas.

The program is said to be the first of its kind and has been launched initially in India, because of the numbers of design houses here. Depending on how it unfolds, it may well be replicated in other countries, said Joe Jensen, general manager, embedded markets division, at Intel Corp.

Intel will help Indian firms develop platforms in the embedded segment, hoping these firms will be better able to meet the unique needs of emerging markets, including Intel's own. Form factor, modularity and other details of products for the emerging market will be met through reference designs being built by the design houses under the program.

The first solution to be unveiled will be reference designs for point-of-sale terminals. Intel sees the Indian retail market being the biggest market segment domestically for products using its embedded solutions. Versions of the device will be on shown here at the first-ever, three-day Indian Embedded Systems Conference, beginning Thursday, October 4.

In addition to point of sale terminals, infotainment devices are among the other products that will be developed under the program, while reference designs for medical-imaging products and communications-infrastructure products using Intel embedded solutions will be developed by Indian design houses for overseas customers. "Local design houses have become key to OEMs with respect to system architecture, and it is this that the program will seek to address," Jensen said.

Intel, which is celebrating its 30th year of providing embedded solutions, started its Indian R&D center a decade ago. Yet it ramped up R&D specifically for its embedded and communications groups in Bengaluru in 2000, beginning with software development for network processors. It is now into platform-enabling, with end-to-end capabilities that include market development, said Sanat Rao, marketing director, emerging markets division, Intel Technology India Pvt. Ltd.

Intel is clearly targeting the relatively big base that the Indian embedded software industry represents. Employing 60,000 engineers, India's embedded software-development revenues have been estimated at $2.53 billion in 2005 by Frost & Sullivan, and are expected to grow at 30 percent until 2015.

Source : EETIMES

System-on-a-chip

System-on-a-chip or system on chip (SoC or SOC) is an idea of integrating all components of a computer or other electronic system into a single integrated circuit (chip). It may contain digital , analog ,mixed-signal , and often radio frequency functions – all on one chip. A typical application is in the area of embedded systems.

If it is not feasible to construct an SoC for a particular application, an alternative is a system in package (SiP) comprising a number of chips in a single package. However, SoC is believed to be more cost effective since it increases the yield of the fabrication and because its packaging is simpler.

A typical SoC consists of:

• One or more microcontroller , microprocessor or DSP core(s).
• Memory blocks including a selection of ROM ,RAM , EEPROM and Flash.
• Timing sources including oscillators and phase-locked loops.
• Peripherals including counter-timers , real-time timers and power-on-reset generators.
• External interfaces including industry standards such as USB , FireWire , Ethernet , USART, SPI.
  
• Analog Interfaces including ADC and DACs.
• Voltage regulators and power management circuits.

These blocks are connected by either a proprietary or industry-standard bus such as the AMBA bus from ARM.DMA controllers route data directly between external interfaces and memory, by-passing the processor core and thereby increasing the data throughput of the SoC.

Proliferation of communications devices and the drive to reduce costs have necessitated the
current trend towards system-on-a-chip (SOC) designs.

No longer are solutions split among multiple chips with analog components separated from their digital counterparts. SOC chips require both elements to be on one silicon substrate.

The Rise of the Semiconductor Industry

The industry has already become a $3-billion business in India. And the story is just about begining

Inside the office of Ittiam Systems in Bangalore, on either side of a television set, are placed two videophones connected to the Internet. Their proximity to each other is purely incidental; one of these phones could even be in San Francisco. It also does not matter much whether you have a good broadband connection. If your connection speed drops, the picture on the phone display becomes smaller and smaller. It will disappear completely if the connection speed becomes too low, but you can still continue your conversation uninterrupted.

The videophone market is still in its infancy, but this gadget could one day replace the audio handsets we use these days. Most major telecom companies are developing them. So are start-up companies. Indian companies work on several aspects of the videophone, both of the wired and wireless varieties. However, not many Indian companies have the knowledge and experience to design and develop a full product. Yet, Ittiam had worked very fast, developing the product within two months of getting the new DaVinci chip from semiconductor manufacturer Texas Instruments (TI).

Ittiam is thoroughly familiar with TI technology; the two companies have been working together for a few years now. Ittiam had earlier developed products using two other TI chips — designed mostly in Bangalore — that were predecessors of the DaVinci. It is now looking for a manufacturer for the phones; among the prospective candidates is one from India itself. If this company gets the manufacturing rights, Ittiam’s videophone will become almost entirely an India story: part of the chip, the product design, the software and, finally, the manufacturing also done here.

In most other industries, this wouldn’t have mattered much. But the semiconductor and electronics industries are so closely wedded to each other that all the components need to feed off each other to grow. So, examples like that of Ittiam are the first signs of a big change: the coming together of the Indian semiconductor and electronics industries, which could push both into the global league.

In the last four years, the Indian fabless semiconductor industry has grown from around $1 billion to over $3 billion. A recent study by Frost & Sullivan predicts that domestic electronic production will be around $155 billion by the year 2015, which will give an opportunity worth $16 billion in domestic manufacturing of semiconductors. The study also says that by 2015, India’s semiconductor industry would have impacted 12 per cent of India’s GDP directly and 15 per cent indirectly (compared to less than 2 per cent now).

Ten years ago, there was not the slightest sign of a semiconductor industry forming in India. By 2000, a few multinationals started operations in the country, but several key components of the ecosystem were missing. Some were missing even three years ago. Yet, it all seems to have fallen into place in the last three years. India now has a semiconductor ecosystem and the electronic ecosystem is beginning to form. The implications of interplay between the two are obvious. Says Bobby Mitra, managing director, TI India: “Semiconductor solutions are at the heart of electronic systems. They are the fundamental engines that help electronic companies drive innovation.”

India is now home to around 120 chip design companies. In the last two or three years, every sort of semiconductor company has set up office or expanded its presence in India. This list includes chip vendors, design services companies, design tool companies, verification companies, intellectual property (IP) companies, testing companies, and so on.

Within the next two months, SemIndia, a company promoted by Vinod Aggarwal, an Indian-American professor, will start work on building a fab city in Hyderabad, a conglomerate of fabs and other companies, investing $3 billion in the next few years. In 1,200 acres, the fab city will have about five fabs, 200 suppliers, a research institute and some training centres. It will complete the missing link of manufacturing while also bringing a greater variety of companies within a cluster.

Meanwhile, India is becoming a large market for electronic goods. The market for semiconductor products is now at $2.82 billion and is likely to grow at 29 per cent a year over the next 10 years, according to Frost & Sullivan. Consequently, a few companies have started electronic design, and a large number of vendors are planning to manufacture products in India. We have already seen Alcatel, Nokia and Flextronics, but more companies will establish manufacturing facilities in India soon. The combined growth of the Indian semiconductor and electronics industries will become one of the most significant events in Indian corporate history.

As with all other industries, the growth of the Indian semiconductor industry was partly a result of changes in the structure of the global industry. The latter started disaggregating towards the end of the 1980s when chip vendors such as Intel and TI gradually stopped doing everything on their own. Tool-making, silicon design, verification, software development, IP development, manufacturing and packaging all became activities of specialist companies.

As the industry became more complex, more layers started forming and then moving out. You could be anywhere in the world, yet specialise in one of these areas if you had the skill. The business of design services grew with the complexity of the chip. Indian companies, never one to miss a services opportunity, began to establish large silicon design teams.

Some of these teams are now among the largest in the world. Wipro, for example, has 1,450 designers, making it the biggest team in the world outside captive design houses of chip companies. Also, Sasken has 350 people and MindTree Consulting, 200. The revenues are reasonably good as well. Wipro gets around $50 million from design services, and Sasken gets approximately $10 million every year. The overall revenues for all such companies put together were at $585 million last year, according to Frost & Sullivan.

Design services became a noticeable business by the turn of the century. By then, the large multinationals had begun to expand. The semiconductor industry was beginning to enter a slowdown in 2001, and India was a good place to design chips and develop embedded software at a low cost. This was why Intel, the world’s largest semiconductor company, started its India Development Centre in Bangalore in 2002.

Still, we could not talk about an Indian semiconductor industry even at that time. Vital skills were missing. There were no start-ups. Domain expertise was minimal. But the landscape has changed completely since. Says G. Venkatesh, chief technology and strategy officer, Sasken: “Three years ago, multinational semiconductor companies were using India for capacity augmentation. Now they are using India strategically.”

Today, the multinational design centres are a major component of the country’s semiconductor industry, both in terms of numbers and overall influence. The Intel India Development Centre now employs 2,300 engineers. ST Microelectronics employs 1,500 people in Noida near Delhi. TI has now stabilised at around 1,000 engineers. Companies like Philips, Cypress Semiconductor, Infineon and design tool vendors like Cadence and Synopsys all employ several hundred engineers.

It is not easy to see in numbers the contribution of these centres because MNCs do not disclose revenues based on work from specific centres. Still, here is one example. Cypress Semiconductor has an engineering team of around 200 people in Bangalore, who have made products that have so far provided the company with revenues of over $250 million. One product, the static RAM, gets the company $30 million every quarter. One could extrapolate on how much a centre of 1,000 engineers could contribute to a company’s revenues.

The growth of these engineering centres would have been a story in itself. They are significant in other ways too, as they are now functioning at the cutting edge of technology and, as we shall soon see, also trying to develop electronic design and manufacturing within the country.

These centres have designed several critical products: Intel’s Centrino Core Duo was mostly developed in Bangalore. Cypress Semiconductor’s engineers have developed several static memory chips. Engineers at ST Microelectronics have developed megapixel camera chips. TI engineers have developed several products like audio and multimedia chips. Broadcom engineers participate in the development of a large number of chips. Says Rajendra Khare, managing director, Broadcom India: “Broadcom is increasingly giving the ownership of products to Bangalore.”

As the multinational centres took off, the start-up activity also picked up, as both Indian and US companies established base in India. Silicon Valley’s venture capital (VC) community was one of the major drivers of this change. They believed that it was no longer feasible to develop complete products out of the US. There was already a precedent like Moschip, a product company based in Hyderabad, which showed that it was possible for a start-up to develop full chips from India. Beginning somewhere around the year 2003, the VCs started insisting that the entire software or part of the chip should be developed in India. This led to a stream of US-India start ups to the country, most of them based in Bangalore. These companies were in niche areas, and they quickly raised the level of domain expertise within the country.

When California-based SiNett started its Bangalore office in the year 2004, it was beginning work on one of the most difficult things to do in networking: build a processor that can handle both wired and wireless networks. SiNett developed the software for its chips from its Bangalore office. This chip, called OneEdge Switch Processor, has now become one of the most keenly-watched products in its domain.

Similarly, California-based Infinera started around the same time as SiNett to develop a chip to reduce deployment time in optical networks, using Bangalore as the centre to develop software for the chip. Both these companies were started by US-based Indians. Soon, more start-ups came from the US: Open Silicon, Beceem Communications, Verismo Networks, Sling Media… in fact, so many semiconductor companies set up shop in India in the last three years that the number of engineers employed went up from a few thousand in the year 2000 to over 60,000 now.

The last few years saw pure Indian start-ups as well. As experience picked up, and as the number of engineers began to increase, some of them began leaving the multinational or Indian companies and started their own ventures. Unlike in software, these companies were not simple services companies. They were working at the cutting edge, developing products, and also doing some services to get revenues in the beginning. It is still an unusual business model, necessitated by lack of VC trust in pure-play product companies.

Cosmic Circuits, one such company, was started a year ago by Ganapathy Subramaniam, who worked in TI for 15 years. It specialises in the rare and difficult area of analogue design, and is an important addition to the chip ecosystem. In fact, it is the only analogue design IP company in India. Its first chip, a power management solution for portable gadgets (not to be sold under its brand name), is getting ready, but it has a strong revenue stream already, and has invested Rs 3.5 crore so far.

So, in three years, the semiconductor industry has gone from one based on design and software services to one that also develops products for the world market. During this time, the global industry went through many changes. In 2004, it emerged from its slowdown, but a lot of activity had shifted from the developed countries to India and China. Software began to become more and more critical to the chip and the final product, and this helped Indian companies.

The chip, meanwhile, continued to increase in complexity. Designers now work regularly with transistors of 90 nanometres (a nanometre is one billionth of a metre). Chips with transistors of 65 nanometres are already being shipped, and companies like Intel have demonstrated chips at 45 nanometres. At this level of sophistication, no one has a free hand at anything. The tool makers, the VLSI (chip) designers, the software engineers, the product design companies and even the foundries have to work closely with one another. We saw how the industry disaggregated about 10 years ago. Now it is going the opposite way. Says Jaswinder Ahuja, senior vice-president, Cadence: “The industry has come full circle as the complexity of semiconductors is making it re-aggregate.”

Cadence has a design centre in Noida that develops cutting-edge products. Not far away is its customer ST Microelectronics, and away in Bangalore is another large customer, TI. Both work at a level that requires deep understanding of physics as well as handling of complexity at the design level. Cadence has worked with these companies to develop methods that prove a design to be correct, before the product goes to the foundry. Cadence and TI have also worked together to define and develop low-power design methodologies.

This example lies right at the beginning of the semiconductor value chain. A little ahead of the value chain, we find more examples of collaborations within the country. Wipro has been doing designs using processor cores from the British IP firm ARM Semiconductor. This necessitated frequent trips to UK. Two years ago, ARM started its own design centre in Bangalore. Today, Wipro’s engineers travel only a few kilometres. ARM itself has five of its 11 certified partners — companies that are authorised to work with its designs — in India, making the country its most important development base.

Most of the companies mentioned are now forming closer relationships, but they are usually kept under wraps because product development is extremely competitive. Broadcom, for example, uses silicon IP from MindTree Consulting, develops software for multimedia over the Internet with Verismo Networks, has used Stag Software for quality testing, develops ASICs (application specific integrated circuits) with Open Silicon, and so on. TI works with about 40 companies in the country. Even start-ups have found partners. SiNett, the chip company, is working with some potential customers in Bangalore.

This synergy is unusual for India’s IT industry. Its software companies never worked with one another. The semiconductor industry’s components, though, have to interact closely. In fact, despite the fact that geographies matter less these days, the success of the semiconductor industry in a country depends on how many components of the ecosystem it can form and how closely they interact. India still has some way to go, but the missing components are now beginning to form.

With Bangalore in the midst of a construction boom, one seldom notices new buildings in the city these days. Yet, in Electronic City Phase II, already filled with several imposing buildings, one cannot help but notice a small, enclosed complex of four handsome big buildings. Only one is occupied, by California-based chip testing company Tessolve. The rest of the buildings are almost ready. The complex has the interesting name Semicon Park. What’s cooking here?

Tessolve opened its office in Bangalore a year ago, despite the fact that the country had no state-of-the-art fab. Inside its office, on the ground floor, are assembled some of the most expensive chip testing machines in the world. Some of these cost more than a crore each and have the ability to test complex chips extremely fast (each chip from a fab has to be tested separately). Why would a chip testing company put up a large facility in a country with no fab and limited electronic design and manufacturing activities?

Actually, Tessolve has come here anticipating chip manufacturing activities soon. And it is not building an isolated entity. It has also taken on the responsibility of developing and maintaining the Silicon Park (started by some private overseas investors), which is supposed to house at least five electronic product design companies in a few months, with an investment of Rs 10 crore. It is one of a kind now, and is already being used by some start-up product companies.

Beceem is one such company. Set up in 2004 by Rajat Gupta, who had earlier managed Cypress Semiconductor’s R&D centre in Bangalore, Beceem is a high-tech company by any yardstick. It has developed two chipsets for WiMAX, a wireless technology that would begin deployment in three or four months. One of the company’s founders is Paul Raj, a distinguished Indian scientist who is now a professor at Stanford University. Raj is one of the pioneers of a technology called OFDM (orthogonal frequency division modulation), and Beceem used his contributions extensively.

When the company developed its chipset, it did not have to go to Taiwan to test it. “Having Tessolve so close is a big advantage,” says Gupta. Tessolve is building its own ecosystem within the Silicon Park, but would benefit immensely from the (SemIndia) fab in Hyderabad when it comes up. So would Applied Materials, the world’s largest manufacturer of fab equipment, which set up a development centre in Bangalore last year anticipating chip manufacturing activities, much like Tessolve. So, almost all the components of the semiconductor ecosystem are now in place.

Meanwhile, electronics manufacturing is also beginning to happen. For example, Alcatel is manufacturing around $1 billion worth telecom equipment every year. Says Ravi Sharma, managing director, Alcatel India: “Alcatel is making India one of the manufacturing hubs for the world.”

One can visualise how things are likely to happen. Alcatel uses chips from Freescale Semiconductor in its switches. Freescale has a development centre in Noida with 400 developers who are working on some of its state-of-the-art chips. This centre is already trying to optimise some of its chips that go into Alcatel products. In the future, it could design the chips here itself. So, the cycle could begin and end in the country.

Domestic manufacturing would help product development immensely, because product development and manufacturing normally go hand in hand. When Tejas Networks developed its optical switches in India, it could use the manufacturing facilities from Flextronics and Solectron in Bangalore. Tejas’s development gives an indication of changing times. Of the 10,000 switches this Rs 150-crore company has sold, two-thirds were sold this year.

Flextronics itself is an example of design, development and manufacturing going hand-in-hand. A year ago, it bought three companies in India: Hughes Software, Deccanet and Emuzed. These companies were already working with one another, and Flextronics brought them together under one management. Emuzed, which has developed all the multimedia technologies in Nokia phones, is now working closely with TI to develop mobile videophones, for which the erstwhile Hughes Software will develop software as well.

We can foresee another situation developing. Many gadget manufacturers are trying to develop low-cost products for the Indian mass market. Bringing down the cost necessitates the use of sophisticated technology, so these companies will have to tap the domestic semiconductor and electronic ecosystems to the hilt. Says Rajat Gupta: “Bringing down the cost of a product involves several engineering challenges.”

Not long ago, nobody expected the development of a domestic semiconductor industry. Says K. Neelakantan, general manager of GDA Technologies: “In the 1990s, I had not imagined that India will have a thriving semiconductor industry.” Ten years ago, as the head of the defence lab Anurag, Neelakantan was responsible for the development of the country’s first chip. So, the last 10 years have surprised even industry insiders. And the next 10 could do so to a greater degree.

Source : Businessworld

Intel India contributes 50 per cent to global revenues

The contribution of India to Intel’s global products is on the rise. The latest contribution has been on the notebook processor technology front with the Intel India Development Centre (IIDC) in Bangalore making around 50 per cent contribution to the Intel Centrino Mobile platform. Intel in India has around 3,000 people spanning various functions with the majority engaged in R&D activity.

Addressing media persons here on Thursday, Sandeep Shah, director - mobility group, Intel India, said, “We are on a ramp-up and increasing our value & inputs to these products.”

The latest mobile platform of Intel, formerly codenamed Santa Rosa, saw the India centre making various contributions in the areas of software validation, hardware board design, chipset and validation for the customers.

Mr Shah said that for the first time, the entire hardware board has been designed in Bangalore. Intel has also seen its three previous mobile platforms having contributions from IIDC. This also signifies the growing confidence of Intel in its India operations.

Intel India officials said that its expertise has been growing and has developing domain expertise in certain verticals. It was earlier providing support and validation functions and now has gone about implementing products independently. Mr Shah said this latest mobile platform will also be used in the small form factor PCs. This has been the second such activity for Intel in the recent past. It had recently unveiled a new chip called teraflop processor, which is capable of doing trillions of calculations per second. The IIDC had contributed 50 per cent towards the products in the areas of logic, circuit and physical design.

Source : Economic Times

Multi-core chips are the way forward: Intel

Betting big on its multi-core processors, Intel on Thursday said the era of single processors was almost coming to an end and that dual and multi-core processors were the way forward. “We see a huge opportunity for multi-core processors. They ensure high performance and consume less power,” said Narendra Bhandari, director (Asia Pacific - SSG Global Developer Relations Division), Intel Technology India.

The company is partnering with various engineering colleges and technological institutes worldwide to help develop a talent pool adept at multi-core processing and related software tools. “Globally, we have tied up with 300 institutes for training and developing talent pool on our platform.

In India, we are looking at extending the partnership to 40 institutes by this year-end. We are mainly targeting computer science graduates and post-graduates and we already have tie-ups in place with about five institutes including IIT-Kanpur,” he said.

Talking about opportunities, Mr Bhandari said the company had shipped one million, quad-core processors in the last six months.

Quad-core processors are one of Intel’s latest offerings. “With personal computing and mobile usage increasing, we see the demand for multi-core processors also going up. Laptop numbers, for example, are going up and we expect laptop sales to overtake desktops by 2011. Over 3 billion people use mobile phones worldwide, of which only 30 million accesses net on phone.

This is the kind of opportunity we are targeting. Besides, we see education as another field with great potential,” he added. According to him, by the end of this year, almost 100% of all systems shipped with Windows XP or Vista will have multi-core processors. The company is also working with about 100 organisations in India at various levels on its multi-core technology.

“We are expanding our partnership with various software developers. This year alone we trained over 3,000 people in the country, who are developing various applications based on multi-core technology,” he said.

Source : Economic Times

Cap on units availing fab sops may go

The cap on the number of semiconductor and other high-tech fabrication (fab) units that can avail of fiscal incentives may be relaxed. Earlier this year, the semiconductor policy had put a cap of a maximum of three semiconductor fabs and 10 high-technology fabs.

The proposal to relax the limit is likely to be taken up by the ministry of communications and IT once the semiconductor policy, notified in March, is up and running.

This comes at a time when semiconductor and high-tech players such as SemIndia, Hindustan Semiconductor Manufacturing Company (HSMC), Moser Baer, Videocon and Signet Solar have announced plans to set up fabrication units in the country.

“We are expecting many more players to come up with plans to set up base in the next four months,“ said an official in the ministry, who said talks are on with many big players in the semiconductor and high-tech space.

“With many big companies showing interest in setting up base in India, there is a possibility that at a later stage the policy will accommodate more fab units than what the policy currently allows for,” the official said. The government is expecting investments of Rs 24,000 crore in 2-3 years under the policy.

The semiconductor policy is yet to have an impact as the committee that will appraise projects is not functional. The guidelines that will determine the format in which the proposals/expressions of interest are to be submitted to the committee are being formulated by the ministry. Once the guidelines are in place, the policy will come into force.

The policy provides for 25% direct subsidy of the capital expenditure incurred in the first 10 years for semiconductor manufacturers located outside SEZs with zero counter vailing duty on capital goods and 20% subsidy for those located within SEZs.

The minimum investment for availing of the incentive package has been pegged at Rs 2,500 crore for chip fab units and Rs 1,000 crore for ecosystem players.

Source : Economic Times

AP puts Fab City on fast track

Hurt by criticism, the Andhra Pradesh government has put the Fab City and the $3 billion semiconductor wafer fabrication projects on the fast track, paving way for the issue of an order detailing the incentives and modalities of transfer of land for the project to the promoters.

The issue had taken political overtones with the Telugu Desam Party, the political opposition in the state, dubbing the project as ‘Fraud City’ last week, and characterising it as similar to the infamous Volkswagen proposal, where the state was defrauded of several crores of rupees.

Doubts were also expressed about the capability of the project’s promoter Vinod K Agarwal, former don of McGill University, Canada, and the founder of Logic Vision.

Agarwal is also the chairman of SemIndia Inc, the holding company set up to execute the Fab City project (through a special purpose vehicle called Fab City SPV), the $3 billion wafer fab, and the $100 million ATMP (assembly, testing, mark-up and packaging unit).

He was forced to fly down to Hyderabad on Wednesday to allay fears on the matter.

Andhra Pradesh heavy industries minister Geeta Reddy and Agarwal held parallel press conferences on Wednesday to address the issues raised in various quarters.

The state government said it was waiting for the Semiconductor Policy to be formulated to issue the government order.

Agarwal, in turn, said he was waiting for the state government to issue the government order to transfer the land, specify the government equity, power and water tariff before he can kick off work on the projects.

While the semiconductor policy was gazetted on March 21 the guidelines are yet to be formed by the Centre for whetting of proposals by an appraisal committee of bureaucrats and industry representatives.

Source : DNA

Intel treats hardcore gamers with new quad-core processor

Stiffening competition has led to launch of newer, faster and more efficient products by both Intel and AMD, the latest in line being Intel Core 2 Extreme processor QX6800.

Intel has made another significant addition to its innovative processor family with the Intel Core 2 Extreme processor QX6800, setting new standards for desktop PC performance.The launch came a good three months earlier than expected.

The company’s twelfth quad-core processor offering,Intel Core 2 Extreme processor QX6800, is ideal forthose gamers, digital design professionals and enthusiasts who crave the highest performing computers they can get their hands on. The processor runs at 2.93GHz, which is the fastest native clock speed yet reached with the Intel Core microarchitecture for the quad-core desktop to date.

Apart from hardcore gamers the processor is also attracting media users and developers like Adobe, Cakewalk, DivX, Sony Creative Software, as it would enable media professionals to capture creativity quickly and reliably.

According to the company’s figures, the Core 2 Extreme quad-core processor QX6800 is up to 65% faster than the Intel Core 2 Extreme dual-core processor X6800 on video encoding.The new chip will also reduce waiting time for high-definition media editing jobs such as video encoding, said Eric Kim, senior vice president and general manager of Intel’s Digital Home Group, in a statement.

At the recent Game Developer’s Conference in San Francisco, several software developers demonstrated new games that have been “threaded” to take advantage of multiple processor cores and threads.

This increased performance can help deliver smoother gameplay, more realistic game effects and more lifelike artificial intelligence. Some of the most exciting titles of the year such as Crytek’s Crysis, Gas Powered Games’ Supreme Commander and Flagship’s Hellgate London have undergone substantial joint engineering efforts with Intel to use more than two processing threads to their advantage.

With Core 2 Extreme QX6800 released, Intel is looking to increase the performance gap with rival Advanced Micro Devices, which is also expected to release its quad-core competitor product in the middle of this year.

The competition with AMD has resulted in both the companies launching newer products. Intel launched two low-power versions of its Core 2 Duo processor, the U7600 and U7500 chips, a week before their latest launch.

But unlike Intel’s product line, which is comprised of two duo-core chips, AMD’s upcoming offering will be four individual cores on one chip. It remains to be seen whether that enhances performance.

Last year, AMD outsold Intel in dual-core chips. However, through price cuts and new product, Intel has regained its momentum. AMD on Monday lowered revenue expectations for the first quarter, blaming it on cuts in the average selling price of its chips and lower sales. Analysts say the company is feeling the affect of locking horns with a richer rival.

The Intel Core 2 Extreme processor QX6800 is built on Intel’s 65-nanometer process, has an 8 Mbyte cache and supports a 1066-MHz system bus. The processor is available now at a cost of US$1,199 (Rs51,227).

Intel’s Next Generation Processor: 'The Biggest Leap Since the Pentium Pro'

Pat Gelsinger, senior vice president and general manager of Intel's Digital Enterprise Group, revealed details about a next generation processor, Nehalem, which brings an entirely new microarchitecture (and motherboards), and will include onboard memory and graphics controllers.

Nehalem-based desktop, server and mobile processors and systems are slated to be available in 2008. The Nehalem effort is part of Intel's strategy to step up its chip cadence.

"The new systems architecture is a major shift is system architecture, and a stunning value proposition," Gelsinger beamed. "It's the biggest leap since the Pentium Pro [which reached the market in 1996]." It's also a big shift for those who create memory and graphic controllers, such as AMD, which just acquired ATI.

"We will integrate the memory controller on the die, with both a buffered and native version," Gelsinger explained. For many years, AMD's claim to fame has been its integrated memory controller, which helps to reduce latency. "We have the best memory hierarchy on planet today," Gelsinger said in response to a question about AMD's HyperTransport processor design approach. "The best cache is more important than an integrated memory controller, which is why Intel wins on benchmarks."

On a technical front, each core utilizes two threads and the chips are designed specifically for the 45-nanometer process, unlike the Penryn family due later this year that was a bridge between 65 and 45 nanometer. Nehalem designs are underway with eight cores, and two thread each, Gelsinger said, and the processors will exist in the same thermal envelope as previous generations.

For software developers, Gelsinger said, "Nehalem system server applications are very throughput-oriented already and will take full advantage of the simultaneous multithreading. On client systems, we have been on a multithreaded focus since 2000, when we launched hyperthreading. Now we are reaping the benefits and seeing good parallelism in games, media and even in things like Microsoft Office 2007, but it is still heavy lifting to move the software community together to take advantage of threading."

Gelsinger also outlined the Penryn family of processors, due in the second half of this year, that are based on the 45-nanometer Hi-k process technology and high-k + metal gate transistor design. In plain English, the Penryn family, which will include six processors (dual and quad core Core and Xeon systems for server, desktop and mobile) means chips that are faster and more energy efficient.

The 45-nanometer processors will have 820 million transistors, and the dual core die size will be 25 percent smaller than the 65-nanometer equivalent.

Why the Chipmakers Are Down for '07

Semiconductor companies are bullish about 2008. But first, they'll have to contend with loads of challenges this coming year.

Semiconductor companies may be looking forward to a boom year in 2008, but first they'll need to struggle through 2007—which is shaping up as anything but great.

The beginning of January typically signals a seasonal slowdown in demand for chips used in PCs, digital cameras, wireless phones, and other popular consumer-electronics gadgets. And it usually takes two quarters for that demand to heat up again in anticipation of another tech-crazy holiday season.

But as with every year in semiconductor industry history, there are always a few unusual factors that knock the cycles off a tidy, predictable course. This year, two unusual factors stand out: the demand for flash memory and Microsoft's new operating system, Windows Vista. In the case of flash, chip makers can't keep up with demand, but prices aren't growing fast enough to keep manufacturers very content.

Then there's Vista. It's not the first time that high hopes for the revival of a stagnant PC industry have been pinned upon a new version of Windows. And the last time, what revival there was took much longer than expected to materialize. In short: Don't hold your breath.

Bye-Bye, Hard Drives?

Depending on who you ask, there are anywhere from a dozen to 17 different semiconductor factories, or "fabs," that are either under construction or being converted to produce a type of flash memory chip known as NAND-type flash. It's widely used in digital photography and portable media devices such as Apple's iPod nano and shuffle players.

"There are a lot of companies getting into flash," says Brian Matas, a researcher with IC Insights, a Scottsdale (Ariz.)-based chip-market research firm. "There are a lot of joint ventures getting off the ground, and a lot of companies that make DRAM memory chips for PCs converting their factories to build flash."

Additionally, more demand may come from PCs, as PC manufacturers— hunting for ways to hasten boot times and make notebook PCs less susceptible to data loss from hard-drive damage—begin designing flash memory chips into computers. Many contemplate the days when they can replace the hard drive completely. "I don't know if the market is ready for that yet," Matas says. "I'm also not sure if the cost benefit is there with flash memory yet."

Skirmishing for Market Share

Even so, there's no question the flash business is one hot sector of the chip industry. The most visible example is the joint venture between Micron Technology and Intel to build flash memory chips. But others include collaboration between Europe's STMicroelectronics and South Korea's Hynix Semiconductor. Meanwhile, SanDisk and Toshiba , which jointly operate a NAND flash factory in Japan, have another one coming online soon, Matas says.

And while revenue for NAND flash chips grew at a healthy 13% clip in 2006, to about $21 billion, that modest sales growth wasn't reflected in unit demand, which grew at a more robust 48%. Matas says 2007 will look fairly similar to 2006, with demand for chips growing at about 27% while prices grow at a relatively slower 14%. "The factories coming on line in 2007 will add a lot of capacity, allowing companies to cut their costs at the same time," he says.

Also in 2007, the fight for market share between Intel and rival Advanced Micro Devices will remain as nasty as ever. Intel, it seems, will look to holds its own against an increasingly aggressive AMD. In a Dec. 6 research note detailing a survey of the PCs and servers built by Hewlett-Packard and Dell , analyst Chris Danely of JPMorgan observed that Intel's share of this business is shrinking.

Woes in Wireless

True, Intel has the performance edge of the moment, and that should start to make a difference in 2007, Danely said. "We expect Intel's share to stabilize in the first half of 2007…but we believe PC companies will continue to use AMD for pricing leverage," he added. That will pressure profit margins at both companies.

Meanwhile, the wireless business looks far bleaker. Texas Instruments , the market leader in chips used in mobile phones, slashed its profit and revenue forecast for the current quarter, and suggested that sales could slow further in the new year. Merrill Lynch analyst Joe Osha said one big part of the problem was an overhang of unsold chip inventory. "TI put the brakes on production as early as late in the third quarter," he wrote in a research note issued Dec. 12. "We do not believe the internal inventory will come down until the March quarter of 2007."

Warnings at chipmakers Xilinx and Altera are painting a gloomy picture for the first half of the year. Altera said a soft market for wireless infrastructure would force it to forecast a bigger drop in sales—5% to 7% for the quarter, worse than the 2% to 5% drop it had previously expected. Customers are buying fewer programmable gate array chips, which are employed in wireless-networking equipment such as that bought by wireless carriers.

So while it's clear that for chipmakers having a happy new year depends on your end market, what makes 2008 look so good? All the butterflies, kinks, and bugs associated with the adoption of Microsoft's Windows Vista should be worked out, and companies and consumers alike may be eager to revamp aging fleets of PCs. And those PCs will need more memory than ever before to keep up with the new operating system, says Matas of IC Insights. "It takes at bare minimum 750 megabytes of memory to run Vista, and it's much better at one gigabyte," Matas says. "That's going to push the average amount of memory per PC up."

Also, 2008 is both an election year and an Olympic year, with all that implies. "We've often seen good boom years for chip demand in Presidential election years. And we think China will want to show off how technically advanced a place it is during the Olympics in Beijing, so we'll certainly see a lot of action resulting from that."

Stale Chips, Sliding Revenues

The industry is facing what may be its worst slump in a decade, given an end-of-year inventory glut and the impact of Vista.

It's been clear for some time that 2007 would be a tough year for chipmakers. What's been less clear is exactly how tough it would be.

Until now. The seasonal slump that hits the industry every January is well under way, and this year's slowdown may be the worst in a decade, with only the faintest hope in the cards for the second half, say analysts and industry groups.

Sales of microprocessor chips that go into desktop and notebook PCs, server computers, and high-end workstations are selling at about their usual volume, but revenues are down as sale prices slide, according to Osha.

Cyclical Woes

The culprit, as with most years, is an inventory hangover from the fourth quarter. With PC makers like Dell , Hewlett-Packard, Gateway, and Apple having stocked up on chips to meet high demand during the holiday season, as usual, they're ordering fewer chips at the beginning of the year.

"Selling prices appear to be the culprit as OEMs [PC makers] and distributors work to liquidate inventory taken on during Q4," Osha wrote.

But what makes 2007 special? At least one reason is the transition to the Windows Vista operating system. Microsoft has said it sold 20 million Vista licenses in its first month of general release. Still, PC upgrades on both the consumer and enterprise side of the business have been slow to materialize amid questions over whether to upgrade immediately. Meanwhile on the Apple side, new machines and a new operating system are expected early in the summer, kicking off an upgrade cycle that should last well into the second half of the year.

PC shipments grew about 10% in 2006, according to estimates by research firm Gartner, to slightly less than 240 million units, and revenue remained flat, at about $201 billion. The firm has forecast meager unit growth—about 9.9%—and essentially flat revenue growth for 2007.

Price Declines

Demand for servers, the computers that run Web sites and corporate networks, is also being crimped. Virtualization, the technology that lets many operating systems run on a single computer, has been eating into server sales, says IDC, which cut 4.5 million servers from its sales forecast for the second half of the decade. For the period, the researcher now expects unit growth of 39%, from 61%.

Osha's note came on the heels of word from the Semiconductor Industry Assn. that worldwide chip sales in February increased only 4.2% vs. February, 2006, and were down 6.5% from January, or by more than $1 billion. The total revenue reported for the month was $20.09 billion. SIA President George Scalise noted in a statement that sales of microprocessors were up 8%, but that prices on those chips were down by 15%.

Dean McCarron, head of Mercury Research, a researcher that tracks shifts in the microprocessor market, says that while he's seeing price declines, there's no reason for alarm. "It's worse than the usual seasonal pattern, but not vastly so," he says.

Missed Targets

The pain is being felt differently from one chipmaker to the next: Many analysts agree Intel will weather the slump better than AMD. Osha wrote that AMD's inventory troubles are worse than those faced by Intel. He expects Intel to see its processor revenue decline by only 8%, vs. a 20% slide for AMD. "It's apparent that Intel is likely to emerge from the quarter in better shape than AMD, and we expect Intel's Q2 outlook to be better than AMD's as well," he wrote.

AMD said on Mar. 5 that it will likely miss first-quarter revenue targets that had been between $1.6 billion and $1.7 billion. AMD's stock price has been sliding since then. It closed at $12.90 on Apr. 3, down more than a dollar over the last month, and within 10¢ of its 52-week low.

AMD vs. Intel

AMD is said to be readying a competitive response designed to challenge Intel The company is near an announcement on a new set of Opteron processors for servers that it's describing as retaking the performance lead from Intel. Additionally, AMD plans to launch a new advertising campaign to hit the point home.

Server chips are traditionally where AMD has given Intel the biggest worry, and it was the first few generations of Opteron chips that did the most damage to Intel's market share over the last few years. But Intel responded and, by most measures, has been ahead of AMD for the last several months.

As of the end of 2006, AMD had been holding its own against Intel in the market share race, according to Mercury Research figures. Its share of the combined market for PCs, notebooks, and servers at the close of the fourth quarter of 2006 stood at 25.3%, up from 23.3% in the third quarter and 21.4% in the fourth quarter of 2005. Intel's share, meanwhile, has been slipping from 76% in the third quarter to 74.4% at the end of the fourth.

And while that's good news for AMD on one hand, Intel's favorite weapon of choice historically when faced with a resurgent AMD has been tough pricing. Combined with a market where demand is worse than it would otherwise be, you have the makings of a difficult first half of the year.

India’s chip-maker to make semiconductors for mobile phones

By C Somayaji and G Chakravorthy/Bloomberg

Bangalore: Hindustan Semiconductor Manufacturing Corp., an Indian chip-manufacturer, plans to make chips for mobile-phones when it sets up factories in India, the world’s fastest growing wireless market.

The company will select a location for one of the manufacturing sites within three to four weeks, Deven Verma, chairman of Hindustan Semiconductor, said in a televised interview on 4 April in Mumbai.

Hindustan Semiconductor, founded by a group of Indians based in California, plans to invest as much as $4.5 billion (Rs19,318 crore) in two manufacturing plants in India. The company will license technology from Infineon Technologies AG, Europe’s fourth- biggest maker of semiconductors, Verma said.

India last month began offering a package of incentives for chipmakers, including interest-free loans and subsidies, as it seeks to attract as much as $5.5 billion in investments for chip and electronics factories over three years.

Subsidies will be provided for as much as 25% of the capital needed for companies in the first 10 years, Dayanidhi Maran, India’s federal minister for communications, said on 22 February. The incentives came into effect on 21 March.

http://www.livemint.com/2007/04/04102509/Indias-chipmaker-to-make-sem.html

MosChip Enables Gaming Platform Connectivity

MosChip Announces the Successful Deployment of Its PCI-based UART Chip by Gaming Company, Densitron -- One of the First Chip-Level Gaming Applications from India

SANTA CLARA, Calif. & HYDERABAD, India -- Hyderabad-based MosChip Semiconductor Technology Limited, India's first fabless chip design company, has announced that it has made an entry into the gaming platform arena with its high performance connectivity solutions.

UK-based Densitron Gaming, a subsidiary of Densitron Technologies PLC (LSE:DSN), and a leader in embedded computer products for the gaming industry, has selected MosChip's PCI-based product for its gaming platform, "Sapphire." This platform is being supplied to the Russian gaming giant, the Unicum Group, which in turn, is using this in its "Sensation" line of state-of-the-art video slot machines sold globally.

MosChip, a leading provider of high performance connectivity solutions for consumer, industrial and computing applications, has now added this new gaming application to its growing list of successful products powered by the MCS9845 PCI to Dual UART/ISA controller chip. The chip goes into the platform CPU motherboard which is a custom solution developed by Densitron for the Russian gaming giant.

"Moschip MCS9845 was the ideal chip that allowed us to provide a total of eight serial ports in the gaming platform providing a comprehensive feature set for the I/O intensive environment of today's video slot machines," said Craig Stapleton, Product Manager at Densitron. "We have been very pleased with MosChip's support and device drivers and plan to use this chip in our future products."

"We are pleased that MosChip's flagship PCI to serial/parallel product has been selected by Densitron, a leading supplier of gaming platforms around the world," said Prem Talreja, VP of World-wide Sales and Marketing at MosChip. "The need for serial ports or UARTs continues to grow from traditional industrial markets to consumer electronics and our line of PCI and USB adapter chips are ideally suited to meet the demand."

Today, if Densitron is using a platform that needs eight serial ports that means the need to integrate peripheral components, for example multiplayer cards or credit card interconnects are becoming more and more important - in a gaming platform. "So, is the need increasing in various other industrial and consumer applications like point of sale (PoS) terminals (right from small grocery stores to airline booking offices) or industrial controllers in the manufacturing domain which use MosChip's several products in the PCI, USB and Internet security space," Mr Talreja explained.

MORE ON THE PCI-BASED UART SUPPLIED TO DENSITRON

The MCS9845 is a PCI-based high performance Universal Asynchronous Receiver-Transmitter (UART) chip with an integrated ISA bridge. The combination of standard 16C550 Dual UART with an ISA bridge -- for additional UARTs, Parallel Printer ports and other connectivity -- makes the MCS9845 an ideal choice for applications which require Dual UART functionality and ISA scaling flexibility in a single chip solution.

MCS9845 is a member of a family of product that enables the PCI to Serial/Parallel applications. Other products in the family are:

Co MCS9835 - PCI to dual UART and Printer Port

Co MCS9820 - PCI to single UART

Co MCS9815 - PCI to dual Printer Ports

Co MCS9805 - PCI to Printer Port

In addition to Densitron's "Sapphire" platform custom board, the MCS9845 and its companion members have also earned its reputation as a proven, affordable and versatile component through numerous applications in PCI cards, I/O bridges, high speed modems, monitoring equipment and embedded systems.

The MCS9845 is available in the 128-QFP (Standard or RoHS) package, and is priced at $4.50 in 1,000 piece quantities.

For additional information on this compact, low power, product, please visit http://www.moschip.com/html/MCS9845.html

About MosChip

MosChip Semiconductor Technology Limited, a fabless semiconductor company, was founded in 1999 with headquarters in Hyderabad, Andhra Pradesh, India. The company's design center is in Hyderabad. The sales activity is handled by its wholly owned subsidiary, viz., MosChip Semiconductor Technology, USA. The company has several products in the PCI, USB and Internet Security Space. For more information about MosChip, please visit www.moschip.com.

About Densitron

Densitron Gaming is a leader in embedded computer products for the gaming industry. Densitron Gaming designs, manufactures and sells technologically advanced PC products tailored to the specific needs of the gaming industry. With an installed base of more than 30,000 units worldwide, the ConnectBus[R] range of products is proven in the harshest environments worldwide. Visit us at http://www.densitron.com/computers for more information on our products and services. Densitron Gaming is a wholly owned subsidiary of Densitron Technologies PLC (LSE:DSN), which is a publicly held company, traded on the London Stock Exchange.

SAFE HARBOR: This release comprises certain forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those mentioned in such forward-looking statements. The risks and uncertainties including but not limited to, those risks and uncertainties, viz, our ability to compete in highly competitive semiconductor industry, ability to define, develop and sell new products, dependency on subcontractors for the supply and quality of silicon wafers, dependency on international markets considering the cyclical nature of the semiconductor industry and our ability to attract and retain technical manpower. MosChip may from time to time make additional forward looking statements in any manner and does not undertake to update any of these forward looking statements that may be made from time to time by or on behalf of the company.

24102006 http://www.allbusiness.com/services/business-services/3952557-1.html

Infineon may join consortium for $4 bn chip fab

Hindustan Semiconductor Manufacturing Company (HSMC) is set to announce the technology partners for its $4-billion semiconductor chip fabrication plants.

This is the first announcement after the notification of the semiconductor policy on March 22. The announcement of SemIndia’s $3-billion fab unit in Hyderabad, which is being set up in collaboration with Advanced Micro Devices, the world’s second-largest chip-maker, was made before the policy was unveiled.

Interestingly, the HSMC fabs will be based on technology from a consortium of European companies that could include at least one of the semiconductor biggies — Infineon and ST Microelectronics.

While confirming that the technological co-operation would come through a consortium, Devendra Verma, promoter, HSMC, refused to divulge the names of the partners, owing to a non-disclosure agreement.

The names will be made public on Wednesday in the presence of Union IT minister Dayanidhi Maran. Infineon is Europe’s largest and the world’s second-largest manufacturer of semiconductor products for the automotive and communications sectors. The $10-billion ST Micro, too, is a strong player in similar areas, with a leadership position in several segments. It was the number one supplier of camera modules for mobile phones in 2006, apart from semiconductors for set-top boxes and power-management devices.

It was also the third-biggest semiconductor supplier in China in 2005.

Verma is currently talking to at least five states for setting up the fabs. The location will be finalised in four weeks from the announcement of the tech co-operation, he said.
The company will focus on chipsets and other semiconductor products for the domestic electronics industry, mainly mobile phones, direct-to-home TV set-top boxes, automotive and smart cards.

The first unit is expected to cost roughly $1 billion. The HSMC announcement could be just one of the first announcements. More such can be expected in the coming days, now that the semiconductor policy is in place, though the industry feels some glitches need to be ironed out.

For starters, the cap on just 2-3 fabs for government sops has caught the industry by surprise while a 9% discount rate to calculate the net present value of the projects has met with some unhappiness. At last count, there were at least four projects vying for subsidies from the Centre, whose participation is crucial for the viability of the capital-intensive semiconductor ventures.

http://www.dnaindia.com/report.asp?NewsID=1087475

Centre will woo Intel again on chip fab

NEW DELHI/HYDERABAD: With the semiconductor policy finally getting notified, the Union minister for Information Technology, Dayanidhi Maran, has said he will revive talks to get Intel to consider India once again for a manufacturing facility.

The lack of a semiconductor policy in India had forced the world’s biggest chipmaker to shift consider Vietnam instead some time back.

“We expect that with the semiconductor policy in place, we would be able to attract investment worth Rs 24,000 crore or even more in this sector in the next two-three years,” Maran declared. By March 31, 2010, India will house two-three semi-conductor fabs each with an investment of $2billion-$3billion.

Some of the biggest names in the industry are already making a beeline for India. The semiconductor policy came into effect from March 21, 2007, the minister said, adding that the Department of Information Technology (DIT) would soon be setting up an appraisal committee for the evaluation of the semi-conductor projects trying to set up shop in India. The committee, to be responsible for verifying the projects and forwarding recommendations for approval from the government of India, would be headed by additional secretary in DIT.

The other members of the committee would consist of senior officials from the department of commerce and finance and technology experts as well. The incentives for the semiconductor industry were announced almost a month back. But the DIT is likely to put the details of the semiconductor policy in the public domain only tonight.

The government on February 22 announced that 25% direct subsidy of the capital expenditure can be availed of by semiconductor manufacturers located outside SEZs with no countervailing duty on capital goods and 20% subsidy can be availed by those located within SEZs. For semiconductor manufacturing, the minimum investment for availing the incentives has been pegged at Rs 2,500 crore, while the threshold for other products like liquid crystal displays(LCDs), organic emitting diodes, plasma display panels, storage devices, photovoltaics and other advanced micro and nano technology products and assembly and testing is Rs 1,000 crore.

It has been indicated that the subsidy will be in a combination of tax concessions, interest subsidy and interest free loans. The plants will be able to enjoy the tax benefits until March 31, 2010, the minister said.

The first of the chip-plants to come up in the country is likely to be SemIndia Inc’s $3 billion fab project in Hyderabad. The factory will make chips using 65 nanometer and 90 nanometer technology.

“The notification of the policy opens up a new era in India’s semiconductor quest,” said B V Naidu, managing director, SemIndia Fab City which will house up to eight units. The Fab City has received proposals from four companies to set up units within the complex apart from a gases plant by Linde BOC, Naidu said.

From http://www.dnaindia.com/report.asp?NewsID=1086523

Global Top Semiconductors companies

AMD had nice Financial year of 2006 as compared to 2005 and Intel took a hit.

NXP is Philips semiconductor

Will Indian companies get place in it in 2010 ?

or

Will these companies shop for Indian Semiconductors companies to set up low cost mass market manufacturing destination ?

Chip makers may see fund rush soon

A Slew of announcements for committing investments in the Indian semiconductor manufacturing sector in the next few months is expected, according to the Indian Semiconductor Association (ISA). This follows the announcement of the Semiconductor Policy on Thursday by the Union government.

Rajendra Khare, chairman, ISA, welcoming the policy, said, “The domestic electronics market is growing rapidly. Reports suggest that about 28% of the country’s economy will be effected by this sector in future. We will see investment coming in soon.” Players have been waiting in the wings for the policy before announcing their manufacturing plans in India, he added.

One of them is Hindustan Semiconductor Manufacturing (HSMC) led by Devendra Verma. The company intends to invest $4.5 billion to set up a joint venture in India for semiconductor manufacturing. The group will tie up with a global major, one of the top five multinationals in this segment, to set up two fab units. The JV is likely to be announced within three weeks, said Mr Verma.

On whether the policy will have any effects on the existing design companies in India, Mr Khare said that manufacturing units will help build an ecosystem including testing and packaging units. “Apart from that, we expect the current pure design companies here to expand and grow. They will also bring in their product engineering to India,” he added.

India needs to consolidate semiconductor space

When it comes to availability and scalability of talent and talent cost advantage in the semiconductor design space, India rules among its peer countries, says the ISA-Ernst & Young Benchmarking Study: `India in the Global Semiconductor Design Ecosystem’. However, the country now faces challenges including improving quality of talent and maintaining cost competitiveness in order to sustain the fast paced growth of the sector.

Sunil Bhumralkar, Director, Ernst & Young India said, ``talent cost advantage and availability & scalability of talent are the key factors that give India the competitive edge over other countries as a preferred destination for outsourcing semiconductor design services. However it is imperative that we understand and address the challenges faced by the industry like robustness of IPR regime, quality of talent, quality of technical education, and maintaining cost competitiveness to sustain growth.’’

The study was done in two phases. Phase I was a survey among 28 semiconductor design companies in India -- MNC, Indian and EDA firms which account for over 65% of total employees strength in the sector. The second phase was benchmarking India against seven peer countries -- China, Taiwan, Israel, Czech Republic, UK, US and Canada on certain parameters including talent-related factors, business environment-related factors and infrastructure related factors.

India’s ratings were very favourable, according to Sunil Shenoy, senior manager, E&Y India who led the study. While the country was rated `high’ in availability & scalability of talent and talent cost advantage, it rated `moderate’ in quality of talent, quality of technical education, legal/IPR regime, maturity of semiconductor design sector, semiconductor market potential, quality of business environment and advantage in other operational costs, and `low’ in availability of good physiscal infrastructure.

According to the ISA-Frost & Sullivan report, the Indian VLSI and embedded design sector in 2005 was estimated to be worth $3.2 billion and is expected to grow to $43 billion by 2015.