Texas Instruments CEO: India is chip-design force

India is emerging as a chip-design powerhouse, according to Tom Engibous, chairman, chief executive officer, and president of Dallas-based semiconductor maker, Texas Instruments Inc. (TI). “Even as we cut annual expenses by US$600 million by the end of 2001, and reduced headcount in almost every location in the world, during one of the most severe downturns for the semiconductor industry, we more than doubled our staff at our R&D center in India to 1,000 people, and we plan to continue to add talent in India,” Engibous said Thursday at a press briefing in Bangalore.

A number of multinational semiconductor companies including Broadcom Corp. of Irvine, California, Santa Clara’s Intel Corp., and Cypress Semiconductor Corp. of San Jose have set up integrated circuit (IC) design centers in India. “If you look at the United States, the number of electrical engineering graduates from 1987 to 1999 has halved, and continues to go down, ” said Engibous. “Multinationals are adding capacity in areas where there are skills and talent, and if you look around the world, the selection of India is obvious.” TI India also hopes to take advantage of the large number of engineers of Indian origin in the U.S. who are expected to return to India over the next few years, Engibous added.

TI is designing a single-chip solution for GSM (Global System for Mobile Communications) phones which is scheduled to be available to customers by 2004, according to Engibous. Texas Instruments (India) Pvt. Ltd., TI’s R&D center in Bangalore, is one of three centers, the others being in Dallas and France, that are working on designing this product that integrates into a system-on-a-chip (SOC) about 15 chips that are currently used in GSM handsets. “When you integrate a lot of functions on a single chip you are bound to get a lower cost device with lower power consumption,” Engibous said.

Besides its own design center in Bangalore, TI is also outsourcing R&D in India to local companies such as Wipro Ltd. and Sasken Communication Technologies Ltd., both based in Bangalore. Local companies contribute about 400 engineers who do IC design and embedded software development for TI India. “It is not an issue of cost alone,” said Biswadip Mitra, managing director of Texas Instruments (India). “In many cases we find that the local companies have competency in a particular area that far exceeds what we have in TI India. If we were to try and build that expertise ourselves that would take time, and delay the product.”

The semiconductor industry went through its worst downturn in the industry’s history in the last 20 months or so, according to Engibous. “2001 was the worst year that we ever experienced by a factor of two compared to the prior worst in 1985,” added Engibous. “We held our R&D flat even as one-third of the revenue of the industry disappeared, and continued to invest $1.5 billion in R&D, and $1.8 billion in capital expenditure, while at the same time cut down $600 million of overhead costs annually by the end of the year 2001.”

If the PC era was enabled and driven by general-purpose microprocessors, the mobile Internet and broadband markets will be driven by signal processing, according to Engibous. “DSPs (digital signal processors) and analog semiconductors are the most relevant semiconductor technologies for the communications era, and TI is well positioned in both these semiconductor areas,” he said. TI is investing in solutions for broadband and wireless applications including cable modems, wireless LANs, and digital still cameras, and the development work for some of these products, both at the IC and application level, is being done by TI India.