It’s a simple enough question: Is there now, or will there be at some point going forward, an India-based EDA industry? The reason for asking the question seems obvious. The answer is not so obvious.
The Republic of India is the second-most populous nation and, per Wikipedia, the largest democracy on earth, with 1.1 billion people, 28 states, 7 territories, 22 official languages, and 1600 minor languages and dialects arrayed across 3.3 million square kilometers. Hindi and English are considered by many to be the “principal” languages in India; Hindi is spoken by over 200 million people, and English by over 400 million.
India is home to the second-fastest growing economy in the world (after China), and that circumstance is the sub-context of this article. Per The Economist (February 3, 2007), India’s economy expanded by 9.2% in 2006 and is on track to outpace that rate in 2007. Whether that growth rate is good or bad for the country, or the world, is yet to be determined, but the immediate impact is clear -- India is hot. Business opportunities are coming online in India at a far faster rate than most could have predicted even 5 years ago, and the semiconductor sector in India is part of that landscape.
Last month, the newly formed India Semiconductor Association hosted the ISA Vision Summit 2007 in Hyderabad. Reading from the briefing document associated with the event:
“The Indian semiconductor design industry, comprised of VLSI design, board design, and embedded software companies, has design companies across Bangalore, Delhi & Noida, Hyderabad, Chennai, Pune, Ahmedabad and Goa. All of the global top-ten fabless design companies have India operations, and 19 of the top 25 semiconductor companies have a strong presence here.”
“The semiconductor design industry in India had [gross revenues] of US $3.2 billion in 2005, with an engineering workforce of around 75,000. It is estimated to reach US $43 billion by the year 2015 and [to] provide jobs to 780,000 professionals with a CAGR of around 30% for this period.”
“With its growing middle class population of nearly 400 million people, which will only increase over time, India’s electronic equipment consumption, which was estimated at around US $28.2 billion in 2005, is expected to reach US $363 billion by 2015 growing at a CAGR of nearly 30%. Indian electronics equipment domestic production was US $10.99 billion in 2005, and [is projected to hit] US $155 billion in 2015.”
If your eyes have not glazed over at these predicted red-hot rates of growth, you can see that India, both as design community and end-product market, is emerging as a force to be reckoned with. Hence the question: Will an India-based EDA industry emerge to meet the demands of India-based designers? Not “off-shore” R&D facilities for the currently established players in EDA, but new, locally-based EDA companies built on Indian venture capital expressly supplying the growing needs of the Indian design community.
EDA vendors constantly argue that they need to be “close to their customers.” If the design community in India is set to increase 10x over the next 10 years, will India become one of the global epicenters for emerging EDA companies at the same time?
To answer these questions, I spoke by phone with five people involved in the EDA industry, and exchanged email with a sixth, all of whom have ties to India either by birth and education, or through business, or both:
Kamal Aggarwal, Vice President of Marketing & Strategy at SoftJin Technologies (Bangalore)
Pratap Reddy, Chairman & CEO at ArchPro Design Automation (San Jose)
Vic Kulkarni, President & CEO at Sequence Design (Santa Clara)
Rajeev Madhavan, Chairman & CEO at Magma Design Automation (San Jose);
Daya Nadamuni, Silicon Valley-based Market Analyst and weekly blogger for EETimes India
Raju Pudota, Managing Director for Denali Design Systems India (Bangalore).
I was surprised by the fairly consistent answers I received from the first five on the list, and the contrasting assertions put forth from the sixth. Five appear to say that something’s coming, but it’s not here yet. One appears to say that something’s already here. Perhaps only time will tell who’s right.
Kamal Aggarwal, SoftJin
There is a lot of tool development going on in India, but [it is] predominantly for U.S.-based EDA companies. Depending on the company, they may have 10-to-20 percent of their staff based in India working in tools development, and activities related to development. At the same time, there have been a few India-based startups. For instance, SoftJin started in 2001, and since that time we’ve also seen a couple of other startups in India.
Our take on EDA is slightly different from the predominant product model. We do customized EDA. We develop EDA tools for specific requirements of semiconductor companies [who] ask us to develop a tool not available on the market that they would like to have for in-house use. Primarily, we partner with either in-house CAD groups who’s mandate it is to develop the tools, or we work as tools developers for other EDA product companies who want to make use of our services or offerings.
There are always challenges for new players [trying] to make a dent in a mature market [like EDA], but we’ve been growing at a reasonably healthy clip. In 2004 we had 14 engineers, and [today] have about 100 engineers [providing] post-layout tools and tools targeted at programmable platforms.
Our marketing approach in other geographies is to work with customers in the U.S. and Japan -- a challenge when we are headquartered here in India. [However], having India as the place where we do tool development has not been an issue for our customers, apart from the business issues related to manpower or IP protection that any prospective customer has to deal with [working across] large geographies.
The EDA market in India is growing. It started from a small base, but is growing as semiconductor companies set up large facilities in India. We are not selling to semiconductor end users, but to tool developers, so to the extent that tool development has moved to India, for us the EDA market is right here in India and right now. Three or four years ago it would have been difficult to [support an India-based EDA industry] without a critical mass of designers to develop tools locally. Now we have local developers and are able to find local, experienced designers who we can test ideas on, which is very useful.
From the supply side, there is the dynamic today that a lot of EDA tool developers with long experience working in U.S.-based companies are looking to move back to India to be part of Indian companies. By offering a challenging opportunity, we are offering an invitation to come back to India where [the engineers] were born and brought up.
And experienced engineers are not just coming back in EDA, but in VLSI design as well, to work for Indian companies or in the Indian centers of foreign companies. For instance, Vinod Malhotra, our VP of Engineering, has long years of experience managing R&D post-layout tools. He recently came back to India [after working at Synopsys in the U.S.] and has joined SoftJin because he wanted to be part of an Indian EDA company generating new products.
It’s never an easy decision to make [this move]. Silicon Valley has a very unique blend of cultures and provides a huge opportunity for intellectual people to grow and work on challenging problems. The one thing we have seen, however, is that gradually the conditions are emerging in India where similar opportunities are arising here and giving an inducement to return.
[In addition], our universities are becoming increasingly sophisticated. In the past, a good proportion of our top students went abroad for higher studies or to work. That proportion is coming down as a lot of engineers here are looking to get absorbed into local companies.
Will there eventually be a complete semiconductor ecosystem in India? I believe we are gradually moving to a point where there is valuation in all points of the ecosystem -- tools development, usage, design, and manufacturing. India is becoming a growing market for semiconductor chips, so it’s natural that this could lead to an integrated India semiconductor ecosystem. That’s [certainly] the vision of the India Semiconductor Association -- to move towards a point where more and more of the parts cooperate with each other.