BANGALORE, India Though most Indian chip designers work for large, multinational companies, there's been a marked swelling in the ranks of domestic startups doing silicon and intellectual-property (IP) design on a global scale. Those companies enjoy the same advantages of the multinationals notably an abundance of local engineering talent, available at low cost. But they also endure such challenges as high EDA-tool costs and the attrition of trained engineers to the United States.
Most of the Indian companies are legally set up as subsidiaries of U.S. corporations located in Silicon Valley. That provides customs and taxation advantages, as well as a home office located near customers. But most or all of the engineering work and decision-making occurs in India.
In Bangalore, India's Silicon Valley, a formerly multinational design center has become an Indian operation. Softw are and Silicon Systems Ltd. was a design center for S3 Inc. until early last year and was involved in the design of the Savage 3-D chip.
The Bangalore center's expertise is in DSP, audio and networking. Last year, S3 decided to pull back in those areas, said Sridhar Manthani, managing director of Software and Silicon Systems. "They wanted us to do graphics, but our interests were different, so we bought them out," he said.
Today the company has 24 engineers designing ASICs, firmware and embedded software. It's legally set up as a subsidiary of Thinkit (Santa Clara, Calif.), which serves as the marketing arm. Thinkit is apparently doing its job: Manthani said that the company has as much work as it can handle and that it doesn't want to grow beyond 30 or 40 people.
Software and Silicon Systems is working on a million-gate Gigabit Ethernet LAN chip in 0.25-micron technology. The company does RTL design, verification, synthesis and floor planning, leaving layout to its Asian foundry par tners.
Connections are helping the company land contracts. Manthani, formerly vice president of engineering at S3, was in the United States for 15 years; cofounder Sunil Nanda was a founder of EDA startup Redwood Design Automation. "The quality of the people here is really outstanding," Manthani observed. "You get people who are less jaded, I think; they really want to work."
On the downside, Manthani said, the company lacks the "continuous market update" it would have in the United States. And "costs are not as low as they should be," because of high travel and communications expenses.
Like the multinationals, Software and Silicon Systems must train graduating engineers to use EDA tools. As for the other bane of Indian electronics companies attrition of talent to the United States Manthani said the company has a good track record in personnel retention.
A high-tech giant
The largest Indian concern to set its sights on global chip design is Wipro Corp., whose $500 million in revenue makes it one of India's biggest high-tech companies. Wipro's Infotech group has a 700-person-strong Technology Solutions division that does ASIC design along with developing networking software and operating systems.
Moreover, Wipro has funded a startup, EnThink Inc., that will provide IP cores and integration work. EnThink is set up as a U.S. company, with corporate headquarters in Santa Clara, Calif., but most development work will take place in Bangalore.
Wipro's hardware activities started with board and system design for the internal Indian market. The company branched into IC design in the early 1990s and has developed some hard macros for VLSI Technology Inc. It has also designed a multiprocessor CPU board, including ASICs, for Sequent and has done high-density FPGA design for Cisco Systems and Nortel.
ASIC, board and system design activities will continue inside Wipro, but EnThink will take over Wipro's IP creation and integration. "To keep current, we've got to stay in Silicon Valley, hence the creation of EnThink," said Ashok Soota, group president for Wipro's Infotech Group. He said EnThink will operate as a "completely separate entrepreneurial entity, with its own market, challenges and rhythm."
EnThink is focusing on IEEE 1394 products, including synthesizable cores for the P1394a link layer, OHCI and PHY. The company will differentiate itself from competitors by customizing IP for specific applications, said marketing manager Ashish Basu.
Meanwhile, Wipro's claim to fame is its ability to offer board and software development in addition to ASIC design services, said Vinod Deshmukh, vice president of technology solutions at Wipro. The biggest challenge, he said, is winning customer confidence: "We have to convince management that this activity can first of all be done outside of the company, and then out of the country."
The high cost of EDA is a d aunting problem for Wipro, which pays 25 percent premiums over U.S. prices for tools. "Here the drive is to optimize tool usage," Deshmukh explained, whereas "a design house in the U.S. might have four or five times the number of licenses. EDA vendors should have lower prices for developing countries."
Just as such companies as Hewlett-Packard helped spawn Silicon Valley, ex-Wipro engineers have launched other Bangalore high-tech startups. A case in point is Arcus Technology Ltd., and 80-person provider of intellectual property and ASIC designs.
Avant! Corp. last year announced plans to acquire Arcus, but nothing has been finalized, and discussions are still under way, said Gopal Garg, Arcus vice president of technology and sales. "We want an arm-lengths relationship," he said. "We don't want Avant! customers to feel we are competitors."
Garg said Arcus has designed more than 50 ASICs, all in India, for such customers as Nortel, Lucent, Fujitsu, Siemens, Cisco and Sony. One recent project was a 750,000-gate 100 Base T Ethernet switch, now being retargeted to 0.25 micron, for NKK Japan. Arcus has developed 16- and 32-bit RISC cores for internal use and has begun to sell IP externally.
The company positions itself as a total solutions provider that can take a chip all the way from specification to silicon. Foundry partners include Goldstar, LG Semicon, UMC, VLSI Technology and Vitesse. Arcus Technology Ltd. is becoming a U.S. subsidiary of Arcus Technology Inc. (Fremont, Calif.), currently located on the Avant! campus.
While lower costs give Arcus an advantage, costs are "fast catching up," Garg said, especially for scarce senior-level people. He said Arcus has been able to avoid some attrition to the United States by offering employees a stock-option program.
Garg noted that the lack of a legal structure for IP protection in his country poses a problem for Indian companies. Arcus was once very close to a deal that would have i ntegrated its RISC core into a customer design, but it couldn't get a legal opinion on IP protection or potential conflicts with ARM Ltd., which makes a similar core.
"I don't think there is a lawyer in India who understands the VLSI business," said Garg. "If someone copies a device, I have no protection."
Most silicon-IP development in India is for multinationals, Garg noted in which case the multinational gets the IP and the Indian creators of the property only collect salaries. "If there was IP protection by the Indian government, the Indian economy would be much better," he said.
That atmosphere notwithstanding, spinoffs are cropping up in Bangalore. Armedia Labs, for example, is an Arcus spinoff. Armedia develops systems-on-a-chip multimedia and designed an MPEG-2 422-profile video decoder licensed by Fujitsu and Sony. One current project is a 0.25-micron, 500,000-gate HDTV chip that will handle video, audio, MPEG and transport functions.
Armedia is an Indian comp any "with a spirit similar to a Silicon Valley startup," said general manager Rajendrakumar Khare. Its employees have stock options in Armedia Inc. (Milpitas, Calif.), the parent company and marketing arm. That program, coupled with Armedia's leading-edge chip work, has helped the company avoid attrition, said Khare.
Armedia has 30 engineers and has won venture capital from Europe and Asia. Khare noted that startup costs in India are much lower than in Silicon Valley. The main challenge is that customers are far away.
"The U.S. team bridges the gap, but we have to make an extra effort to know what the customer is thinking," Khare said.
Not all Indian VLSI companies are in Bangalore. SiCore Systems Ltd. is located in the southern port city of Chennai, the new name for Madras. Working through its parent company, SiCore Systems (Sunnyvale), the company developed Universal Serial Bus and 1394 cores for Phoenix Tec hnologies and has done PCI and ARM integration work for Cirrus Logic.
SiCore's differentiation, said technical director V.R. Seshadri, is the ability to offer a complete solution for the customer, including firmware, embedded software and even a real-time operating system if needed. The company has 12 engineers in the United States and 45 in Chennai. "At the moment, we're sending engineers to the U.S. and doing jobs there, but three months down the line all the jobs will be executed in India," said Seshadri. "There should be no difficulty, since we will always have a project owner in the U.S."
One of the most exotically located Indian chip-design centers is ControlNet's operation in Goa, a former Portuguese colony that has become a tropical seaside resort. ControlNet (Campbell, Calif.) is not an Indian company, but Vinod Bhardwaj, its president and chief executive officer, is an Indian expatriate who wanted to set up a design center here.
ControlNet employs 42 people in the United States and 50 in India. The Goa center has been operating for four years and has successfully designed a 26,000-gate PCI MAC chip for Gbit Ethernet and a 200,000-gate Ethernet-switch tester chip. The center has so far done front-end design and is moving into layout.
Even though Goa is trying to attract high-tech investment, Bhardwaj has faced many challenges locating here. For starters, he said, it took a year to get permission to build the facility. ControlNet still doesn't have access to local power and thus must generate its own. And the center lacks proper access roads.
The legendary Indian bureaucracy has made its way felt in various ways. For example, when ControlNet's Bombay facility received two Synopsys licenses on five CD-ROMs, customs officials were so confused that they confiscated not only the software but also the truck that was hauling it. It took a month to get the software and truck returned.
ControlNet h as also been unable to get a direct Internet connection between Bombay and Goa, and, like other Indian operations, it is limited by the Indian government's refusal to allow voice-over-Internet service. Further, Bhardwaj said, the Goa center pays a 50 percent premium over U.S. prices for EDA tools.
But U.S. bureaucracy has also been a problem. Bharwaj said the company has sometimes been unable to procure temporary visas for engineers who need to go to the United States for short-term assignments.
Atecsoft, an EDA developer located in the northern city of Chandigarh, voiced the same compliant. But companies in Bangalore and New Delhi reported that U.S. embassies are issuing visas with no problems.
ControlNet came to India because high-quality talent is available at a relatively low cost. Still, people must be trained, and many end up going to U.S. companies. "We are becoming a training facility," Bhardwaj lamented.