Indian industry proposes to extend deadline of India's semicon policy up to March 2015!

If you recall some time ago, I’d mentioned that the Indian semiconductor policy, which was announced back in 2007, had supposedly expired on March 31, 2010!

Now, the Indian industry has come up with recommendations, which include extending the Indian semicon policy up to March 2015!

For those who’ve come in late, back in September 2007, the Department of Information Technology, Ministry of Communication and IT, Government of India, came up with the Special Incentive Package Scheme (SIPS) to encourage investments for setting up semicon fabs, and other micro and nanotechnology manufacturing industries in India!

I am very grateful to the India Semiconductor Association (ISA) for sharing the details of the summary of inputs and amendments to India’s semiconductor policy.

As I mentioned, the recommendations include extending the Indian semicon policy up to March 2015!

This is fair enough, although I am sure it can extended for an even longer duration. Some other key recommendations include lowering of threshold limit for ATMPs and other ecosystem units, development of ecosystem, faster project appraisal time, etc. — and all of these are significantly necessary.

Should India have a fab? Why not?

There may be debates over whether India should have a fab or not! However, it is pleasing to see that there is still hope. Actually, why not have a fab or a foundry? Use it to serve the global market! The Indian semiconductor industry needs a serious rethink in terms of strategy. Maybe, it cannot survive on chip design services alone!

About 15 months ago (see Feb. 2009 archive on this blog), I had written “Can the Indian semicon industry dream big? (And even buy Qimonda?)! Well, time, I repeated that story! Here’s why!

If you have noted, early June 2010, ATREG, a division of Colliers International, has been appointed as advisor to market the sale of the advanced 300mm manufacturing campus of Qimonda in Dresden, Germany. Now, here’s a great chance for India or some Indian investor to grab this fab!

The highly accessible campus, located in the State of Saxony, features a state-of-the-art 300mm semiconductor fab including 281 advanced front-end semiconductor manufacturing tools, an advanced 300mm R&D fab and 360,000sq. ft. of administrative space. The campus also includes excess land, which could be used to construct a mirror-image of the existing 300mm fab, potentially doubling production capacity.

ATREG will focus on finding an operational purchaser for the facility. As originally constructed, the facility was capable of producing DRAM chips with a maximum volume of approximately 10,000 wafers per week.

The fully automated, world-class Qimonda Dresden 300mm wafer fab was built in 2001 and was the world’s first 300mm production facility. The state-of-the-art, 300mm R&D facility was built in 2005. The world-class 300mm equipment includes hundreds of advanced front-end manufacturing tools, many of which were used in volume production at 65nm. Though production has ceased, the cleanrooms remain in a production-ready state so that a potential purchaser could restart operations quickly.

There, I’ve said it!

There’s an opportunity waiting out there to be grabbed!! If India or someone in India does not move fast and attempt to buy, someone else, from somewhere else in world will surely buy this fab!

Let’s go back to February 2010, when the Karnataka State Government had announced its semicon policy. Perhaps, here’s an opportunity for Karnataka to take a lead!

Industry recommendations for semicon policy

Now, back to the recommendations from the ISA and the Indian semicon industry, which has been reproduced below:

Government of India Semiconductor Policy 2007: Summary of Inputs and amendments: proposed by committee members and industry.

1. Extension of the Policy:

The World Bank has confirmed that global economies are currently facing a recession. The global economic slowdown has severely impacted the semiconductor industry leading to piling up of inventories and reduced capital expenditure. While it is difficult to project the year of revival of the industry, the experts opine that the present situation for the semiconductor industry would last for at least two plus years. It is, therefore, proposed that the deadline of March 2010 may be extended till March 2015.

The extension will provide time:

* To market the Policy and improve the prospects of India to attract investments.

* To highlight the importance of the domestic market to the potential investors. It may be mentioned that the domestic semiconductor market (TM, i.e., the Total Market), as per the ISA-Frost & Sullivan India semiconductor market update report ( 2008-2010) is projected at $ 7.6 billion in the year 2010.

2. Lowering of threshold limit for ATMPs and other ecosystem units:

It is suggested that the threshold limit for certain categories of ecosystem units like ATMPs, optical LEDs, storage devices, LCD, FPD, Photovoltaics, fuel cells, micro and nano technology products (as defined in the SIPS) needs to be re-visited, as these units may not require large investment of the order of Rs. 1,000 crores.

Lower threshold limits (to qualify for the incentives available under the policy) is expected to generate interest for such categories of eco-system units, which has not been seen so far. This lowered threshold limit needs to be defined in consultation with industry experts.

The above areas, though low in technology vis-a-vis the technology required for wafer fab, form an important part in the value chain of chip manufacturing. Location of several of the manufacturing infrastructure in the above ecosystem areas in the country can also serve as a pull factor to set up wafer fabs.

It may be mentioned that countries like Hong Kong, Singapore, Malaysia, etc., took this approach initially and went on to have wafer fab facilities.

Context-aware traffic mediation software could help telcos manage data tsunami: Openwave

Given the rising (and no end in sight) surge  in demand for mobile content and data services, mobile network service providers are facing the challenge of effectively managing exponential growth in data traffic. Service providers must also find ways to maximize bandwidth without sacrificing end user experience.

Anand Chandrasekaran, director of Product Management, Openwave.

In conjunction with the Mobile Marketing Association Forum (MMA Forum) APAC event held this April 13-15, I had the opportunity to interact with Anand Chandrasekaran, director of Product Management, Openwave Systems Inc., which also did a global launch of it product — the Analytics Express at the event.

Managing data traffic challenges
Despite claims of vendors to have solved growing data traffic challenges, those still remain. How can Openwave really help manage this?

According to Anand Chandrasekaran, a fundamental shift has occurred in the industry. He said: “The demand for mobile data that we planned for years ago is finally here – only it’s bigger than everyone predicted. The proliferation of new devices like the iPhone and HTC Incredible, along with vastly improved user experiences and unlimited data plans (to date), has caused a tremendous and unprecedented surge in mobile data demand – AT&T disclosed this year that 3 percent of its users consume 40 percent of its bandwidth resources. This increase in traffic and the competitive pressure to keep data plans flat are squeezing service providers’ margins.”

Now let us look at how service providers can tackle the bandwith issue. As per Chandrasekharan, until now, one approach has been to add network capacity through additional equipment CAPEX. Unfortunately, this strategy is expensive and provides only a short-term solution.

Not all service providers have the financial strength to simply throw money at the problem, nor does that guarantee a sustainable solution. Service providers need to take a more holistic approach in developing solutions that will maximize available bandwidth while being able to monetize this surge of mobile data traffic.

An effective way for mobile service providers to handle the approaching data tsunami is to deploy context-aware traffic mediation software that sits in the data path, empowering them with a full view of their network, their subscribers’ profiles and the mobile devices in use. Context-aware traffic mediation enables service providers to monitor, manage and monetize traffic by creating and delivering smart policy-driven services.

According to him, Openwave’s Traffic Mediation solution runs on an open, IP-access platform that acts as a single control point for traffic management and provides services such as content adaptation, web and media optimization, network security, smart policy control and dynamic charging and campaigning.

Ten commandments of effective standards!

Karen Bartleson, Senior Director, Community Marketing, Synopsys.

Do you know how to distinguish between a ‘good’ standard and a ‘bad’ standard? Or, how would you go about trying to develop a standard in the first place? What makes a standard ‘effective’?

Are you wondering why am I asking such questions? Here’s why: Today, Synopsys sent out a release stating that under the imprint of Synopsys Press, it has published The Ten Commandments for Effective Standards.

I was absolutely thrilled when I discovered the author’s name — Karen Bartleson, Senior Director, Community Marketing, Synopsys and IEEE-SA Corporate Advisory Group member, who I met just about three months ago, during a seminar in Bangalore on IEEE Standards for Design Automation: Their Impact on an industry.

Back then, I enjoyed discussing with her how Synopsys was making use of the social media to connect with its customers. You can find the blog post in the March 2010 archive.

The Ten Commandments for Effective Standards is available for a retail price of $29.95 hardcover, $19.95 softcover and $14.95 eBook through bookstores and online, including through Happy About and Amazon.com. So, I hopped on to Amazon.com to have a look. Here are the chapters! Quite interesting!

Cover of Karen's book!

1. Why standards?

2. Why effective standards?

3. The 1st commandment: Co-operate on standards, compete on products.

4. The 2nd commandment: Use caution when mixing patents and standards.

5. The 3rd commandment: Know when to stop.

6. The 4th commandment: Be truly open.

7. The 5th commandment: Realize there is no neutral party.

8. The 6th commandment: Leverage existing organizations and proven processes.

9. The 7th commandment: Think relevance.

10. The 8th commandment: There is more than one way to create a standard.

11. The 9th commandment: Start with contributions, not from scratch.

12. The 10th commandment: Know that standards have technical and business aspects.

13. Go Forth and Standardize.

Now, I’m not so lucky to lay my hands on Karen’s latest book. However, I’ve requested her to send me a copy, if possible.

But guess what, I managed to speak with Karen tonight, after all! I started by asking what compelled her to write this book?

She said: “As Synopsys created its publishing imprint, Synopsys Press, I volunteered to write the first book in the Business Series. Because standards are one of the areas where I have the most experience, and because I’d written short blog posts about good practices for standardization, it seemed like a natural topic for a book. I’d also searched for a similar book and finding none, decided that there could be a demand for it.”

I also quizzed her about ‘good and ‘bad’ standards. She added, “While I list several characteristics of both “good” and “bad” standards, the overall distinguishing factor of a “good” standard is that it’s widely adopted.”

And, how can the overall standardization process be improved? Her reply, “Leveraging proven processes and organizations, understanding business concerns, using alternate ways to create standards when appropriate, and learning to cooperate on interfaces while competing on products.”

Since it’s too late here in India, I only had three more questions on standards. First — the use of when mixing patents and standards. She said: “Patents that must necessarily be infringed upon in order to implement a standard pose a real challenge to standardization. These patents, called “essential patents”, can stymie a standards effort. Imagine if you implemented a standard, then were sued by an essential patent holder for doing so. There are several ways to deal with essential patents, some of which I describe in the book.”

There’s a chapter ‘Realize there is no neutral party’ — what’s that supposed to mean? Karen said, “It’s important to recognize that everyone who participates in a standards project has a reason for doing so. It puts people’s behaviors in perspective.”

Finally, ‘There is more than one way to create a standard’! What’s the secret? Karen concluded: “The traditional formal standards committee is what most people think about when they think about how standards are created. However, there are other ways to create them. One example is the open source model for creating standards that Synopsys pioneered in the EDA industry.”

Many congratulations and best wishes to Karen!  Thanks a lot for taking the time to speak with me tonight!

Global semicon sales forecast estimates based on Cowan’s LRA model

This is a continuation of my coverage of the fortunes of the global semiconductor industry. I would like to acknowledge and thank Mike Cowan, an independent semiconductor analyst and developer of the Cowan LRA model, who has provided me the latest numbers.

Here are the latest forecast results for 2010 global semicon sales estimates associated with the forecasting model — the Cowan LRA model for predicting worldwide semicon sales.

The World Semiconductor Trade Statistics (WSTS) today (6-02-10) posted the April 2010 actual sales numbers on its website. Consequently, this is the latest update to Mike Cowan’s forecast results as gleamed from running the Cowan LRA forecasting model incorporating the “actual” April sales.

The actual April global semiconductor sales as released by the WSTS came in at $23.385 billion, which is up 43 percent from last year’s April sales of $16.354 billion and down 11.9 percent from last month’s sales of $26.553 billion, (which was revised upward slightly from last month’s published sales of $26.533 billion).

Therefore, the latest updated 2010 sales number predicted by the Cowan LRA model is $301.865 billion corresponding to a year-over-year sales growth of 33.4 percent for 2010.

These latest sales and sales growth are up from last month’s reported forecast estimates of $294.981 and 30.3 percent, respectively. These upward results reflect the relatively strong April sales as reported by the WSTS.

The full complement of the latest sales and sales growths forecast estimates for 2Q, 3Q, 4Q and 2010 are summarized in the table below along with 1Q’s actual numbers.

Source: Cowan LRA Forecasting Model.

Additionally, the May 2010 global semiconductor sales forecast estimate is projected to be $22.743 billion, which would yield a May 3MMA sales forecast estimate of $24.227 billion, which is normally published by the Semiconductor Industry Association (SIA) each month in order to characterize the semiconductor industry’s growth posture.

May 2010 global semicon update: Four quarters of sequential growth, yet still no one believes! Wake up, says Future Horizons

Here are the excerpts from the Global Semiconductor Monthly Report, May 2010, provided by Malcolm Penn, chairman, founder and CEO of Future Horizons. There are a lot of charts associated with this report. The report also covers market trends. Those interested to know more may contact Future Horizons.

March’s total semiconductor sales came in at $26,533 billion, slightly above our February expectation, closing the quarter at $69,181 billion. This was up 2.8 percent over Q4-2009 and one of the strongest first quarter performances ever in what is normally a negative growth quarter. We have now had four straight quarters of industry growth, yet still no one believes in the strength of the recovery!

Of course, something unexpected can always go wrong but the industry fundamentals have never been better aligned. Just as 2001 ushered in the conditions for the so-called the perfect (semiconductor) storm, 2010 is now wallowing in the inverse effect. Surprisingly, few firms are tough. Most are too timid, too cautious or too scared. Welcome to the brave new world of semiconductor company ambivalence and life-threatening risk aversion. “Hello”.

Future Horizons presented its review and forecast for the global semiconductor market on the first day of their ongoing 19th International Electronics Forum (IEF) 2010 in Dresden, Germany, May 6-8. Our overall prediction was that the 2010 chip market would have a barnstorming year; only a disaster of the Lehmann Brothers scale could now derail the market.

The overall five-year forecast presented was:

* 2010: +31 percent, with still some scope for upwards revision.

* 2011: +28 percent; based on: peak of the structural cyclical boom (could stretch into 2012).

* 2012: +18 percent; based on: normal cyclical trash cycle starting 2H-2012 (1H-2013?).

* 2013: +3 percent based on: market correction in full flow (could be negative, cap ex overspend and inventory build depending).

* 2014: +12 percent; based on: start of the next cyclical recovery (single digit, if 2013 is negative).

This would take the industry to around $300 billion in 2010 with a CAGR of 11.8 percent between 2010-14. It would also signal a 180-degree reversal in the industry’s fortunes following its ‘zero growth’ 2000-09 lost decade of growth. Moreover, despite the apparent bullishness of these numbers, given the now unavoidable 2010-11 fab shortage, the growth upside for 2010-12 is still huge.

The real tragedy however of what ought to have been good news for the industry was: (a) still, no one believes in the numbers; and (b) it was entirely predictable.

We first presented this forecast in January 2009, at the high point of the industry’s economic and business uncertainty. The only change we have made in the last 17 months was to increased 2010’s growth number from 15 to 31 percent number. Whilst all other industry analysts, business leaders, trade associations and economists alike wrestled with what was happening, we alone never lost faith in the industry or what the underlying fundamentals were saying.

This cycle’s forecast was the easiest we have ever had to make. All we had to do for the IEF meeting was to adjust for the fact that the 2009 recovery was faster and steeper than even we had dared to predict. The bottom line? The industry fundamentals may often get distorted by events but they never lie, ignore them at your peril.

We were ridiculed for our optimism in January 2009 and throughout the year when we stuck to our guns. We never stopped believing in the numbers however and never subscribe to industry fashion, trend or sentiment, despite this sometime being out on a limb with industry consensus.

We are proud of the fact only we got this analysis right but equally sad that no one had the courage to listen. This was not forecast luck either; this was simply doing what we do best, making a considered analysis and then believing in what the forecast tells us.