The Hindu Business Line : Insourcing of chip design on the rise

Bangalore April 12 Insourcing, or contracting in, of chip design work in the country is increasing. Investments in the range of $3 million are made in the first year of setting up operations, which could consist of a ten-member team of specialist chip design engineers.

Helping Japanese investors set up operations here is FTD Technology, a Singapore-based group. Last year, the firm tied up with Tokyo-based Elpida Memory Inc to set up a design centre here that would make Dynamic Random Access Memory (DRAM) chips, which are used in servers, mobile phones, digital cameras and PCs.

Now, a similar agreement has been formed between FTD's Auxineon and Toppan Technical Design Center Co, the electronics division of the $15 billion Toppan Printing Co, to set up an entity in Bangalore under the name Tesla. TDC has eight design centres in Japan and this is its first foray outside for design and development work. It employs 300 engineers and has a turnover of $3 billion.

They will design integrated circuits for displays, wireless transceivers, key-less entry remotes and other human interface devices. Starting with a team of 10 people and an upfront investment of $1.5 million, the company will grow to 50 in the next 18 months and will invest in a test set-up. The investment will grow to $10 million in the next three years. "In the future, Tesla will provide strategy and new business to us," said Mr Akira Aso, President, TDC, Japan.

Skills Shortage

"The need for analogue engineers drove them to India, where it is possible to train the burgeoning engineering population. This skills shortage will increase as below 90 nanometre digital circuits will also behave like analogue ones," warned Mr P. Bala, Chairman and CEO, Auxineon.

The company has tied up with various universities to get engineers interested in analogue domain. Next week, another Japanese firm in the Power IC domain is expected to set up operations in India via the in sourcing route. A month later, a Korean firm will join the horde, followed by two more Japanese automotive electronics product firms, said Mr Bala.

CULTURE

The booming chip business is bringing cultures and countries together. Language (even technical terms) and management philosophies contrast sharply across borders. Kaizen — the Japanese philosophy of continuous improvement — meant changes in the specifications (defining the product's functions) every day.

It confounded Indian engineers designing chips for Japanese chip makers. "At first it was difficult for the engineers to adjust to the Japanese way of work. We found it different from the American way of work," said Mr P. Bala.

Semiconductor Industry

However, the step to crossing language and cultural barriers has been jointly taken. The semiconductor industry is now catching up with its ICT counterpart. Chip design work is flowing into the country as talent seekers from saturated countries such as Japan and Korea look to the mushrooming engineering pool here.

"Yes, our cultures are quite different. Interaction and swapping engineers between the two countries to better understand each others' cultures has begun. We hope to make the relationship successful," said Mr Akira Aso.

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