Pune now on world semi-conductor map

City is the new semiconductor design and R&D destination,offering an alternative to Bangalore where most firms are based

Written by Express News Service | Pune | Published:July 21, 2012 1:59 am

Pune has emerged the new semiconductor design and R&D hub of India for global companies,and an alternative location to Bangalore that is home to the majority of these companies. With attrition on the rise in Bangalore,companies keen on multiple locations are expanding to other cities. The abundant talent in Pune is attracting semiconductor R&D companies to head for Pune,where 5,000 electronic engineers come up every year.

Pune is the fastest growing destination for semiconductor companies,says Santhanakrishnan Raman,MD,LSI India Research & Development Pvt Ltd. LSI has a base in Bangalore and has set up a centre in Pune. One-third of the LSI team is based here.

“Talent is the only ingredient needed for this industry and that is not easily available. So you go where the talent is,” says Raman on the emergence of Pune.

Another semiconductor design company,Applied Micro has one-third of its global design team based in India at Pune,says Pradeep Dharane,MD of Applied Micro. Nvidia has a large R&D team doing critical work out of their centre. Marvell Semiconductors,Imagination,Qlogic, eInfochips,MindTree,Open Silicon,Tensilica,Wirpo,Sasken are there and now Intel has joined the list. There are 20 companies just doing VLSI (very large scale integration) work. VLSI enables creation of integrated circuits with millions and billions of transistors.

This industry is present in select pockets in India. Besides Bangalore they have a presence in Pune and Noida. Hyderabad has stagnated. Most of these companies are captives of global companies but as the ecosystem grows the number of homegrown start-ups are growing.

At present,about 15-20% of these companies are Indian start-ups. To showcase Pune’s prominence on the global semiconductor,electronic design and embedded systems map,VLSI Design is holding an international conference in Pune in January 2013. Pune was selected for the 26th international conference,which is hostaed by the VLSI Society of India,indicating its emergence on the global semiconductor,electronics design and embeded systems map,Niranjan Pol,coordinating the event said.

While it is hard to put a value on the work being done here,these companies contribute to multi-billion dollar products in design and R&D,says Raman.

“We are on par in the VLSI space and embedded software with US,Japan and Europe but as their size is small the visibility is not there,” says Raman.

But when it comes to the complexity and criticality of work,the average revenues per employee at these companies can be around US $ 500,000 compared to software services industry’s average revenues per person of about US$ 80,000 in the best software services companies. Dharne says these companies in India are doing design and R&D work that could be as much as 50% to 70% of the work.

According to Zinnov Management Consulting global R&d spend is expected to grow to US $ 1.4 trillion in 2012 and drive up demand for R&D and product engineering services and on an average 45% of the R&D headcount either captive or outsourced would be located outside the headquarter country. India is a leading offshore engineering R&D and product engineering services destination with the presence of 15 of the top 20 global service providers. Semiconductor is the third the largest vertical in the global R&D service provider landscape,says Zinnov. The semiconductor industry R&D spend is around US $ 36 billion. About 11% of the revenues for engineering R&D and product engineering services comes from the semiconductor sector.

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