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Semi, India and Innovation

April 25, 2008

Perhaps after economics and markets, semiconductors is something which I actively fill my time with. I am not even sure if it comes second, maybe even first.

With all the knee jerking around from the government, its seemingly pointless even to talk about it. Each year surprisingly ISA [Indian Semiconductor Association] comes up with some new Frost and Sullivan report and then again government, sniffs, tastes, babbles and goes back to its stupor.

I thought I will give the new report a look, to check if its free. [And whenever those swanky business intelligence comes into play, I get mighty spooked out. For a mere 300 pages report they charge ten times in dollars. Yeah! yeah I know- ‘knowledge-is-power’ rhetoric]
I have shot them a mail, if I could get a sneak peek of the report, and while I wait, let me do some of my own forecasts. I will talk about three, just three, but the most lucrative three verticals in this business. Semiconductors is such a huge business, that predicting it normally leads to eating a humble pie. So let me talk about just three of those top notch domains, which I am extremely bullish on.

Reconfigurable computing is a lucrative business and I can see a huge impetus of research, development, newer business avenues and innovative ways of harnessing them, coming to foresight in India. This is not from a technology point of view but a business point of view. One problem which is continuously a pinch in the pocket is the power consumption. But again, this is a price to be paid for the reconfigurable computing. Reconfigurable computing has seen a huge tremendous growth in the whole wide world (www? 🙂 ).

Even till 2000, it was just a more exotic, unwanted design solution to something which didn’t have a replacement (I am talking about ASIC). But ASIC development requires a long engineering cycle, thus bumping up the NRE.

Enter FPGA. India is currently seeing a very low activity in reconfigurable computing primarily because, lack of design impetus. One important marker, is that India will have a huge booming semiconductor industry in the coming years, come hell, heaven or devil. But this will not be an expression of the inherent cost arbitrage advantage. I don’t think Intel, AMD thinks about paying their lead designers something less to boost their profit margins. If cost arbitrage comes into play it will be just a side note on the balance sheet and not the center piece.

India is gearing up for a huge design and services industry. And when you factor in FPGA and reconfigurable computing business into it, including the soft-IP and FPGA cores into the business, I am sure it will pattern in an explosion of sorts.

FPGA business has two primary divisions. Core design services and Silicon Design, out of which core design is a huge business and India will have significant share of it in the coming years, thanks to the intellectual talent over here.

ASIC Design It wont be an understatement to say that perhaps after FPGA business, I am highly bullish on ASIC sector. More precisely embedded computing section. Consumer electronic industry is poised to grow with a YoY CAGR of anywhere between 20% to 25%.

That is the scale of growth I am talking about and embedded computing is poised to be a rockstar among this. But one potential glitch in the system is, a strong and booming embedded computing industry requires a domestic fab. And Taiwan, Korea, China, US has been the examples of these. So till, the fab is not set, effectively the entire growth ecosystem is not being fired up. But once it does, embedded electronics market riding on the wave of consumer durables, PC, laptops, defence(a huge chunk) will grow by leaps and bounds. The audio video industry alone is presently clocking a 10% CAGR with $4.5billion of revenue. And audio/video is just the tip of the embedded iceberg.

Grid Computing. I don’t know if I am right in clubbing this with semiconductors but its definitely going to be the Beatles of Indian semiconductor technology [a tongue in cheek analogy from ASICs being the rockstar]. I would have been more precise had I included chips packing in themselves ‘processing firepower’ , as the center of my attention. But no, considerable thought has gone in naming the third resurgent group as grid computing.

Let me talk about grid computing first and then I will come back to my rationale of including it here. With immensely calculation intensive and number crunching situations arising in modern researches, and even in mundane things like weather/climate prediction (which we often take for granted), computing power as a commodity has become a highly bankable resource. But attached is the high cost of deploying supercomputers and high cost of designing.So grid computing has come up to serve this. Grid computing essentially means the computing harnessed from “multiple computing clusters which act like a grid, generally not located within a single administrative domain“. And the best thing is, the business part of gird computing is what people normally call as cloud computing, which Amazon is so actively pushing around.

Now comes my rationale of including this technology as a performer in the Indian semiconductor portfolio. With the rise of the fourth fastest supercomputer being an immensely cheaply made supercomputer harnessing the power of parallelism, I can safely bet that India is a huge untapped market from the point of view of grid computing. You may be wondering what grid and what computing I am talking about, when the PC penetration is one of the lowest in the world. Yes true, and I don’t intend to say that this business can be harnessed only through idle CPU cycles off the PCs of people who are busy browsing bikinis and babes (Indians use Google to search about sex the most, says Zeitgeist). What in turn I am focusing on is, a total business ecosystem, growing to offer better, custom made grid systems, businesses with immense research focus on better routing algorithms [like Akamai, but more specialized] , design houses researching on processors which can handle network intensive communication as robustly as they can crunch numbers and so one. Or maybe even rise of specialized processors with slave-master mode. With the slave being a superbly efficient number cruncher and master being a routing optimizer. Implications of technology are many. But I can see a huge section latently wishing for it. You may wonder whom I am talking about? I know of somebody whom you can’t even imagine wishing for such computation power.Hint: Think money. [ Keep guessing, I will be letting you know about it soon]

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2 Comments leave one →
  1. May 21, 2008 12:52 pm

    Good preview on semiconductor & India. Looking forward to have more similar articles from you in the future. Keep up the good work!!

  2. Soham Das permalink*
    May 21, 2008 9:38 pm

    Thanks 🙂

    I appreciate your interest. 🙂

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