I have been encountering, however, a debate as to whether or not India should be putting up a fab, or a latest-technology fab. I think the decision will mainly be driven by market forces, and is best left to the people trying to make these investments based on the financial viability of the projects. They see growing consumption in India and may want [to bring] the manufacturing closer to the market.
It’s difficult for me to say whether [India should] invest in semiconductor manufacturing or not, but there are arguments on both side. Manufacturing is a volume game, and we’re a little late getting into that game. One the other side, in order to capture a larger portion of the semiconductor value chain, you’ll have to move manufacturing to India. Some companies in India are putting their resources into this [idea]. It’s a major decision because of the investments involved.
Pratap Reddy, ArchPro
I have been associated with India in one way or another since 1995. That’s when I did my first entrepreneurial venture, moving from the U.S. to Bangalore to start Synopsys India. In those days -- beside Cadence -- there wasn’t anything in India [by way of EDA]. I spent 3 years starting the Synopsys organization and development team.
In 1998, I left the EDA space and went into the mainstream fabless IC space with a couple of startups before ArchPro. These startups both had a significant presence in India in varying degrees. Of course, in those days I was a user of EDA tools not trying to develop and sell tools. With ArchPro, I came back to the EDA space to focus on certain power management problems.
ArchPro has a unique model. Clearly we are headquartered here in California -- most of our executive management is here, plus engineering, marketing, and a couple of architects. But predominantly our development is in Bangalore. Also, we have a significant applications engineering force in India, mainly to cater to the local customers and also as application sales providers in Japan, Korea, and Europe.
[You have to look closely at the reasons the EDA companies first went to India.] When I approached Synopsys in 1994 with the idea of having an off-shore Synopsys India, it was the golden years of EDA -- Synopsys and logic synthesis were on a tear. There was not really any economic pressure at all to make the move to India. The primary purpose of proposing and starting the center in India was that most of the EDA players at the time -- Synopsys, Cadence, and Mentor -- were predominantly a workforce with software-oriented people. Even though the SOC and chip designers [were using the tools], there was very little hardware talent in the companies.
My main idea was to go off-shore to [have access] to chip and system-level designers, to take advantage of having those designers in-house, to develop domain-specific knowledge, and to have real chip designers using the tools and creating IP. That was the motivation for the move the India.
At the time, it took a while for people to comprehend all of it. [Of course], now it looks like a solid proposition. India now has a number of design centers and a number of [different companies] doing ICs there. It’s an entirely different story today -- the challenges that the EDA guys are facing, both as sellers and buyers of tools.
So, broadly, there are two categories [of topics] related to doing EDA business in India. Clearly, EDA companies that are founded here [in North America] have off-shore organizations in India. ArchPro’s in this first category. But the second category is having EDA organizations in India itself, trying to do business there. If you really look at this “flat” world, things have changed significantly -- there’s not a huge wall [between geographies] like in the old days.
If you look at the exciting players in EDA -- Synopsys, Cadence, Mentor, Magma -- they do all have R&D centers in India, the first category, but it’s only a certain percentage [of their effort]. Things get done there, and certain activities are supported, but today it’s more [because] of the cost issue.
However, within the second category where people are thinking of doing EDA work in India, it’s possibly a lost cause. Even here in Silicon Valley, EDA is such a small space. It’s only a $4 billion or $5 billion market. Yes, anybody can start a company, but it’s not really viable to have something in India under the current business models or at the current stage in the industry -- unless, of course, there’s a sweeping change in the whole design chain.
For instance, with new process geometries, or things like power, that we’re addressing, we’re talking about very innovative stuff. Can that happen in India? Possibly, but you have to look at the big market. If it’s there, perhaps a startup can work in India.
Another [concern] -- as a vendor, if you’re trying to sell your products in India, most of the decision making today for the multinational organizations happens outside of India. That means the selling process has to happen in both places. You’re selling value to the design community in India, but [handling] the legal part and contracts, etc., outside of India. Most of the design centers out there [in India] are focusing on the engineering. There are no EDA managers [on site], no contract person to [handle the details]. All the big companies make purchasing deals for the whole company [at a central location]. That may change over time, but right now it’s quite natural for people [not in India] to be making the purchasing decisions.
The other interesting thing is that if you look at most of the companies in India, they have an STP organization, and most people don’t want to break away from that. If we sell into India, we have to use a different infrastructure to do the selling there versus developing relationships with the customer here. Synopsys, for example, has 2 distinct entities -- one for R&D and one for selling. They can still be a STP, but they are different tax entities and the people who handle the legal processes -- the kind that originate in India -- actually do it outside of India.
[Having said that], there is a little bit of EDA emerging in India. Several of the large design services and IP companies are finding a lucrative market in India, but they continue to service customers worldwide.
Technically, you could start a company in India, but I would not do it. In a startup, you need access to the people [who can help you do things], and fundamentally I don’t believe that’s possible in India. But again, if there were a fundamental change in the design flow -- the first in 25 years -- a new set of products would be required and there might be new opportunities.
EDA is a very difficult niche for investment and new startups, but there are huge opportunities as well. ArchPro is an example. There are changes that are going to have a profound impact on the flow, whether the change is being driven from here or from India. I’m very bullish on EDA for the short and long term.
Vic Kulkarni, Sequence Design
The recent ISA Vision Summit was a great opportunity to learn what’s going on in India, with over 250 CXOs and VPs of engineering in attendance. While I was there -- I was one of the speakers at the conference -- I was surprised to learn that there are now 12 or so EDA startups in India.
The total EDA workforce in India today is in the range of 2000 engineers working in Noida, Hyderabad, Bangalore, and Pune. Also, [my understanding of the approximate numbers of employees by company are] Cadence with 800, Mentor with 300, Synopsys with 200, Magma with 120, Atrenta with 230, CoWare with 30, Sequence with 35, ArchPro with 10, Synfora and Bluespec with 20 each, Calypto with 30, Apache with 10, and SoftJin with 100 or so. Of course, these numbers are approximate and can change, but it gives you an idea of the size of the EDA community there today.
When I was in Hyderabad at the Summit, I found quite a few companies’ hiring managers. They say they’re getting tons of resumes from people who want to go back. People who are not from India are moving there as well, learning Hindi, and finding it to be a fascinating culture.