As recently as 4 years ago, I didn’t go to India that often because there was no compelling business reason to do so. Now, there are compelling reasons to go. It’s all about globalization and things happening in China and India. There are over 125 companies who are potential EDA customers in Bangalore, Hyderabad, Dehli, and so on -- wi-max companies, mobile computing companies, and so forth.
Also, the engineering colleges in India are producing more and more advanced-technology engineers, and successfully measuring up to international standards. The IITs are, of course, excellent. But there are also lower-level colleges turning out quality engineers. [In fact], there’s been a sea change in engineering education, and not just in India. Many universities are moving [away from the idea] of a campus and going “worldwide” with web-based training. The IITs are seeing the change and understanding that branding is important, even for universities. There will be even more shifts [in this area] over the next 5 years.
The only thing holding back EDA in India is the training issue, and questions of how you train the resources you need in chip design itself. I’ve seen tremendous progress over the last several years -- government training of VLSI designers with investments from companies like Cadence, Synopsys, and Intel. Training institutes themselves have become profit centers. People are really hungry to learn chip design.
While I was at the Summit, I also talked with [various government officials and professors] and learned that there is a move to make Calcutta a leading-chip design center [to rival] Bangalore. They have millions of dollars for the project and I was amazed -- I have never seen politicians speak so elegantly about technical education. I was really shocked to see such savvy. They are not old-fashioned bureaucrats, but next-generation leaders. Jody Shelton, the executive director of the FSA, was at the Summit as well. She told me that she had never seen politicians anywhere speak so well about technology either.
Brian Lewis from Dataquest was also there, on a panel talking about a key controversy going on in India. Does the country need a 90-nanometer state-of-the-art fab? The controversy actually was a little bit emotional. People were saying, “You guys always told us not to create manufacturing -- first in cars, and then in chips. But we wouldn’t be behind in those things if we had started back then.”
The India Semiconductor Association is raising the capital to create a fab to compete in the market. [However], it’s my opinion that they should not go and chase a fab for the sake of a fab. There are already expert fabs elsewhere -- really, how can you compete with TSMC? Instead, they should focus on applications in India that don’t require 90 nanometers.
For instance, products like the Texas Instruments’ Speak & Spell chip from many years ago was a type of application that had a huge market, but didn’t need next-generation technology. They should let the design community try to find these applications. Let the community find the next killer app, whether it’s solar, or handheld, or an Internet application for farmers, which in itself is a market of 600 million people in India.
One note in all of this discussion about India does worry me, however. Intel is saying to us that they have 2000 designers in India, but they’re not paid on U.S. salaries, so why are companies like Cadence, Mentor, Synopsys, etc. using U.S. pricing for their tools. They’re asking if there shouldn’t be a local cost-of-living adjustment for the tools. That’s definitely a trend we all need to watch out for -- pricing today is based on a worldwide LAN, not on local pricing.
So yes, EDA will continue to grow in India, but the creativity is still in Silicon Valley. Of course, Silicon Valley doesn’t have a lock on creativity. If the developers in China and India want to create their own markets for EDA tools, they can do it.
Rajeev Madhavan, Magma Design Automation
An India-based EDA industry is far from happening -- the domain expertise is just not there to do it yet. And even if they have the domain expertise because some of the customers are there, they have little of the necessary business expertise. It’s one thing to build the technology, and something else altogether to build the business. It will be at least 3 years before I could see it happening, and when it does people will see early-stage companies fail.
Right now there are some companies like SoftJin in Bangalore which do consulting, and there are some companies doing QA, but these companies are providing design services to EDA companies to make their products more stable, better, or more tested. Those types of businesses I can see [succeeding]. But in terms of doing really good EDA in India, not yet. The management talent in India is still extremely weak, with little experience managing customer requirements.
Will that change going forward? Yes, in 15-to-20 years we’ll see as many startups in India as we see in Silicon Valley around anything having to do with IC design. That’s the case already in India in IT. But it’s a pretty aggressive business model in EDA, and [for now] the VCs are only just starting to appear in India.
The EDA industry is one of those places where the “Me, too” [factor] has not changed. You have to be significantly better than the other guys to succeed. You have to know the customers and the business side of the industry, and the execution has to be really good. You have to have productivity and understand the number of people doing chips. This is a business that’s really cut-throat. An EDA startup only has 6-to-9 months to make a dent, or you will become the living dead. If you don’t succeed in that time you will fold. The sad thing is that this is an evolutionary market, not a revolutionary market -- it takes a lot more venture capital to succeed.
Will there be manufacturing in India? Speaking as a person from India and an entrepreneur living here in Silicon Valley -- from an expat’s point of view, India should not get into manufacturing. The only reason to do it would be if the costs would be cheaper than manufacturing in China. [I don’t believe] India can compete with China with a 300 mm, 65-nanometer fab.
Between the amount of investment it would take [to build the fab], the amount it would take [to operate the fab], and the discipline it would takes -- it would require a lot of time to succeed. Even China has not had big successes so far, so what makes India think they can start 10 years later and succeed? I know there’s a lot of patriotic reasons for building a fab, but purely from a technical and business perspective, it doesn’t make sense.
Daya Nadamuni, Market Analyst
Most of the work being done in EDA in India has been support and R&D, starting with the multi-nationals opening centers in India. But that’s a more recent development that went hand-in-hand with support -- field application support engineers followed the design centers into India as they were established by the semiconductor companies.
Now we see that even the foundries are getting in. There was a small news item recently from TSMC announcing a new sales office in Bangalore. It’s actually surprising that it took so long for TSMC [to make this move] as they’re one of the more popular fabs in India.
From a design-tools and support-engineering point of view, EDA has been gathering steam in India since about 2003. The EDA commercial tools market is growing really fast in India. For instance, SoftJin is one example of a locally-funded EDA tools company. They started out as a service provider, and then commercialized a product. That’s a strong path to follow. [Of course], if there is going to be more and more electronic product design in India, they will need to find the tools somewhere, so we could see some homegrown tools companies coming online in India to support local fabrication plants.
Perhaps in 15 years or so, we will see India-based EDA companies -- or maybe even in 10 years. But a lot of the research that supports EDA development comes out of the universities, and I don’t think the Asian and Chinese universities are yet able to develop breakthrough technologies that can be commercialized. That will be the gating factor that will determine the timeframe within which an Asia-based EDA industry will emerge.