BANGALORE, India One of India's top information technology companies, Wipro Technologies, has abandoned its efforts to develop semiconductor intellectual property (IP). After two years of losses, the company's U.S. subsidiary, EnThink Inc. (Santa Clara, Calif.), will narrow its focus to creating IP for the Bluetooth wireless initiative.
EnThink was the first Indian-owned electronics company launched overseas to develop IP. Its failure is likely to bolster arguments here that India's information technology companies can only compete globally in the application software sector.
Indeed, industry observers have decried India's relative lack of success in hardware development, even as its software development efforts soar.
Wipro vice chairman Vivek Paul, who is also a member of EnThink's board of directors, declined to provide specific reasons for EnThink's decision to abandon chip IP development, but hinted that bad timing and the wrong product focus had played a role.
Henceforth, EnThink will instead go "whole hog" into developing Bluetooth IP, Paul said. A search has begun for a new chief executive for the U.S. subsidiary. Sridhar Mitta, the former chief executive, resigned two months ago. Three other top executives, including some hired in the United States to give the company a local feel, have also resigned.
Mitta, one of India's best known technologists, was said to be unhappy with Wipro's strategic and financial control over EnThink. He was also said to be critical of Wipro's decision prohibiting EnThink to function as a startup.
When founded, EnThink was was widely viewed as a winner that would combine the speed and flexibility of a startup with the backing of a stable and prosperous corporation. Asked about his departure, Mitta tersely said he wanted to move on. He now heads an incubation and advisory firm with branches here and in the United States. Mitta had been with Wipro for 20 years.
While Wipro insisted that EnThink is merely changing course, a top Wipro executive said EnThink is now no more than a shell company. It is even possible that the U.S. subsidiary will be closed, he said.
EnThink was launched with a modest investment of $2.5 million, but later found that it could not attract venture capital to fund its operations. But Wipro was unwilling to pour more funds into EnThink as losses mounted and morale sank, sources said.
EnThink had earlier licensed IP worth about $1 million to U.S. companies such as VLSI Technology and National Semiconductor. Its portfolio of IP cores covered IEEE 1394, USB, ATM and Ethernet. Design and development work was completed in Bangalore with a base of about 40 software engineers. Separately, eight employees in the United States focused on concept development, architectures and marketing.