Bangalore next big city for chip design

Bangalore next big city for chip design
Business Standard

When Apple Computers wanted to unwire its mobile music player iPod,(make the iPod wireless headset compatible) the firm shopped around for the chip design and eventually located it at a little-known Bangalore-based firm called Impulsesoft. Today, Impulsesoft's technology is present in most of the wireless media players brought out by consumer electronics giants.

Impulsesoft represents a fast-growing community of firms engaged in chip designing. A chip or microprocessor is the most complex part of an electronic device and designing chips is at the top end of the software value chain.

Bangalore is now home to 70 of the 130 firms (including multinationals) engaged in chip design in India. That makes it not just way ahead of the rest of the Indian competition but one of the top global clusters in chip design ,comparable to Silicon Valley, Cambridge (UK) and Taiwan.

By another measure, number of VLSI (very large scale integration, as high-end chips are called) engineers working in a cluster, Bangalore is second to Silicon Valley and ahead of the rest. But given the pace at which chip design work is growing in Bangalore, even by this measure, it will be at the top spot in the not-too-distant future.

If you break up chip design work into design services (designing for others) and proprietory or innovative designing, Silicon Valley and Cambridge are clearly ahead. But global ranking by this measure also is slated to change.

Of the 70 firms designing chips in Bangalore, nearly 30 are captive offshore design centres of MNCs such as Intel, Texas Instruments and NXP Semiconductors (formerly Philips). But, irrespective of where in the world an innovative chip design firm may be located, more and more of them are acquiring a Bangalore branch.

What is perhaps most significant, is a new tribe of innovative startups headed by entrepreneurs of Indian origin (the firms may be registered anywhere in the world) whose development work mostly goes on in Bangalore and which own the intellectual property they create. It is this tribe that is setting out to close the innovation gap after the services supremacy is fully established.

“As far as chip design services are considered, Bangalore is clearly way ahead of the rest of the clusters (Silicon Valley, Cambridge, Taiwan) in the world. Global players opt for chip design services offered by Bangalore firms for multiple reasons like talent availability and cost advantage,” says Atul Arora, President (Commercial Operations), ARM India, which provides tools and software for designing chips.

When compared to other chip design clusters of the world, Bangalore has the fastest growing community of VLSI engineers 15,000, next only to Silicon Valley in the US, which has 55 chip design services firms employing around 20,000 VLSI engineers.

The industry in the US is nearly two decades old whereas Bangalore entered this premier club less than a decade ago. “Most firms operating out of the Silicon Valley have also started their operations in Bangalore. This particular trend is on the rise and looking ahead, Bangalore can expect more chip design work and an increase in the number of engineers,” Arora points out.

The Cambridge (UK) cluster has 12 firms and employs around 2,000 VLSI engineers. Its work is focused on technology innovation. Taiwan, whose strength lies in manufacturing, has three firms offering chip design services. “Taiwan is looking for strategic pacts with Indian design firms. Taiwanese manufacturers intend to bank on Indian design expertise in the future,” Arora says

Last year, two delegations representing the Taiwanese semiconductor manufacturing companies were in Bangalore looking for tie-ups with chip design servicing firms.

India Semiconductor Association (ISA) President Poornima Shenoy attributes the rise in chip design work to the growing semiconductor ecosystem and availability of talent. “The fact that intellectual property (IP) protection is very strong in India is another major contributing factor. Design work will continue to flow into Bangalore,” she predicts.

Last year alone, the ISA, the apex body of the semiconductor industry, saw its membership double.