Indian, Taiwanese cos see opportunities3 min read . Updated: 21 Feb 2008, 12:29 AM IST
Indian, Taiwanese cos see opportunities
Indian, Taiwanese cos see opportunities
Bangalore: India and Taiwan might not have direct diplomatic relations due to India’s “one China" policy. But this is not preventing the semiconductor industries of these two countries from expanding their partnership.
While Taiwan is the second largest chip design industry (by revenue, only behind US), India is home to more than 100 companies in the semiconductor space. Indian firms see opportunities in embedded software and chip design services, while the Indian market as an alternative to China is what attracts Taiwanese companies.
As a testimony to the interest, a six-member contingent mainly comprising professors from Taiwan-based universities who work closely with the industry, turned up at the third annual summit of the Indian Semiconductor Association (ISA) at Bangalore.
For two days, the delegation interacted with industry captains, academia counterparts and government officials to promote knowledge sharing.
T.-J. Brian Shieh, president of Powerchip Semiconductor Corp, says, “I came to see for myself the inflection point at which India is now. It is similar to where China was six years ago...(in the chip manufacturing space)."
Taiwanese firms can leverage the market knowledge of Indian firms in the domestic telecom space, while mentoring India in setting up its chip fabrication unit.
India’s electronic equipment consumption estimated at around $28.2 billion in 2005, is likely to reach $363 billion by 2015 growing at around CAGR 30%, according to the ISA-Frost and Sullivan report. India’s electronics equipment domestic production is to touch $155 billion in 2015.
Last September, the Taiwan Semiconductor Industry Association, the trade body representing the Taiwan semiconductor industry signed an MoU with ISA to foster business ties with member companies.
“The collaboration will be key as we can learn the ropes from Taiwan in setting up chip fabrication units that are to come up in Hyderabad. The two countries are culturally similar, so it is easy for assimilation of ideas," says Poornima Shenoy, president of ISA.
Acknowledging that collaboration at the government level is restricted, M. Madhavan Nambiar, special secretary, ministry of communications and IT, department of IT, says the industry-level interaction is encouraging. “It’s not that there aren't any government-level interactions with Taiwanese counterparts, but we would like to keep it low-profile. Taiwan sees an opportunity in India as an alternative to China, as it doesn't want to keep all its eggs in the China basket," Nambiar adds.
While Taiwan has a good hardware talent pool, it falls short in access to a large market such as India. This has prompted more than 30 Taiwanese firms to set up base in India. Among them are VIA Technologies Inc, a developer of silicon chip technologies and PC platform solutions, MediaTek Inc., and the world’s two largest contract chip makers, Taiwan Semiconductor Manufacturing Co. Ltd (TSMC) and United Microelectronics Corp. (UMC).
The Noida-based software development arm of MediaTek creates the user interface for mobile phones, a key company product. TSMC chose Bangalore for locally supporting its customers in North America, Europe and Asia with design activities in India as well as to help new fabless companies in India grow and expand. UMC’s customer support office in Hyderabad Technology Park is on similar lines.
Only two Indian companies, Wipro Technologies and MindTree Consulting Ltd, have made inroads in Taiwan; Wipro has 15 clients in Taiwan while MindTree has five, for embedded design services and IP. Both began their Taiwan connection in 2002.
There are about 11 original equipment manufacturers and device manufacturers (or OEMs and ODMs) that have licensed Wipro’s chip IPs in wireless technologies such as Bluetooth. Software competency has enabled MindTree to synergize with hardware manufacturers, especially in the computer peripheral space.
Although Taiwanese company Powerchip is yet to tie up with a Indian chip design firm, Sheih commenting on the Indian industry says, “it’s time now for the firms here to go for product development rather than just do service-level design work, in order to move up the value chain."