The Next Silicon Valley

India flexes design muscle as China tech draws global scrutiny

While China and telecom giant Huawei face withering scrutiny over contentious global trade, technology, and data security issues, India is riding a wave of industry investment in its semiconductor and system design sector.

Investors include longtime Silicon Valley players like Intel which recently added about 100 engineers to its India design team by acquiring Ineda Systems, a fabless semiconductor design company based in Hyderabad.

Intel already has a few hundred engineers engaged in software development in Hyderabad, and has plans to set up a global technology center in the city which will scale from 1,500 to an expected 5,000 engineers in the future.

Successful local tech entrepreneurs have also been long-term investors in India’s electronic design and engineering sector. Most recently, Sridhar Vembu who founded software maker Zoho, secretly funded a chip design team of 50 engineers for 8 years at a Bangalore tech hub.

Last weeks Vembu, and fabless chip maker Signalchip disclosed the investment payoff: India’s first “indigenous semiconductor chips” for 4G/LTE and 5G NR modems.

With India having more than 1.1 billion mobile phones in use, one of the highest in the world, Signalchip has created high performance and cost-efficient systems to enable what it calls “densification of the network.”

Intellectual Property

The chip set incorporates a massive development of software and hardware intellectual property — and its market launch positions Signalchip, and India, at the cutting edge of communications systems design.

For Indian techno-nationalism , the so called-Agumbe chip set is also significant because it marks a major step toward India’s technological independence at a time of mounting concern over global data security.

In a statement, India’s Secretary of Telecom, Mrs Aruna Sundararajan noted that “data security is the paramount concern in the world today and India cannot remain secure in terms of data, unless it manufactures its own chips.” While the US and China are battling it out for the core ICT technology, India cannot lag behind Mrs. Sundararajan said.

Enter Google

New investment is also flowing into India’s design sector from some of Silicon Valley’s biggest and best known technology companies. One of the biggest players here is Google, one of many system makers looking to reduce their exposure to traditional chipmakers such as Intel and Qualcomm.

Toward this end, Google is expanding its efforts to design its own smartphone and data center chips by building a new team of design engineers dedicated to the project in Bangalore.

The moves have escalated the premium on software and hardware design skills in India, thrusting system and chip makers into fierce competition for top talent. According to one report, Google has already poached design engineers from Intel, Nvidia, and Qualcomm.

Based in the south Indian state of Karnataka, Google’s new design team is said to include at least 16 engineers and it could ultimately swell to over 80.

It’s “the latest sign that the tech industry’s biggest players are trying to rid themselves of reliance on the traditional chip business,” one observer noted.

Fabless Followers

India’s chip design sector is also getting a boost from the Indian Electronics and Semiconductor Association (IESA) which recently opened a fabless laboratory in Bangalore to incubate early-stage startups for chip designing and make small and medium enterprises (SMEs) to access funds and enter the market.

“Our vision is to make Karnataka the hub around which the next breed of Indian fabless startups can thrive and accentuate the other fabless companies into the next realm of growth. Along with IESA, we will propel the ESDM sector and support innovative domestic companies,” said George at the lab inaugural event.

“The lab is aimed at incubating 20 early stage fabless startups in three years and 50 in the next five years for chip designing and create jobs in the electronics system design and manufacturing (ESDM) sector,” said IESA president Rajesh Ram Mishra.

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