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Embedded chip design market set for $10 bn export

A recent study shows that out of about 200 semiconductor firms in India, about 120 are into chip design, reports Venkatesh Ganesh.

india Updated: Jun 03, 2007 22:48 IST

The Indian embedded chip design market will surge to Rs 1,76,300 crore ($43 billion) from the current market size of Rs 13,325 crore ($3.25 billion), according to research group Frost and Sullivan. Embedded chip design means designing of chips that are used in mobile phones, electronic products like television sets and a host of other gadgets.

Further, a recent Nasscom-Mckinsey study said that the domestic embedded systems market in India is geared to generate exports worth Rs 41,000 crore ($10 billion) by 2008. This is witnessed by number of chip design companies investing in new design operations in India or significantly expanding the existing facilities.

The companies include Agilent, Dell, Via, Rambus, Elven Technologies, Sasken, Sandisk and even giants like Intel and Cisco, among others. Indian companies are also realising the market potential for embedded chip design and are expanding through acquisitions and expansions of existing facilities.

Recently, Elven Technologies, a subsidiary of Aftek Infosys acquired the Indian operations of US-based Applied Micro Circuits Corporation (AMCC), a Nasdaq listed company that is into semiconductor segment. Similarly, software major Wipro acquired the US-based New Logic in this segment. Out of approximately 200 semiconductor companies operating a facility in India, about 120 of them are into chip design and the rest undertake software development.

“A country traditionally acknowledged for its software development capability is now exhibiting its competency in chip design,” said Vinod Agarwal, CEO of SemIndia, a semiconductor-manufacturing consortium.

“The competition that global companies face in creating new products, marketing them faster, adding new features and functions to existing products while keeping the costs low, are some of the key factors driving this trend,” said Shrikant Inamdar, Director, Elven Micro Circuits. Ahmedabad-based eInfochips, with Texas Instruments and Rambus as its customers, has similar plans.

“We are expanding our operations globally and are simultaneously strengthening the home base by adding 300 more engineers in the current year,” said Pratul Shroff, CEO, eInfochips. The company recently set up its Japan subsidiary and Chicago operations.

First Published: Jun 03, 2007 22:47 IST