Study on semiconductor design, embedded software and services industry in India

The India Semiconductor Association (ISA) has released a study on semiconductor design, embedded software and services industry, along with Ernst & Young.

According to the report, the key challenges constraining the growth of the semiconductor design industry are summarized under five major issues:
i) Quality, availability and maturity of talent.
ii) Absence of a startup and SME ecosystem.
iii) Lack of a semiconductor ecosystem.
iv) Lack of adequate infrastructure, policies and implementable incentives.
v) External issues such as competition from Asian countries and protectionist policies by some countries.

The report then goes on to tackle each one of these issues in detail under elaborate recommendations.

These recommendations require the concerted and co-ordinated efforts by the government, industry and academia to aid India reach the next level of growth and achieve the specific goals envisaged for the industry. The goals are:

Goal 1: Maintain leadership in semiconductor design by incubating 50 fabless semiconductor companies, each with the potential to grow to $200 million in annual revenues by 2020.

Goal 2: Build on India’s favorable intellectual property protection image and make it among the top 5 destinations for intellectual property creation in the semiconductor design industry.

Goal 3: Capitalize on indigenous demand in strategic sectors to provide impetus to the Indian fabless semiconductor industry.

Goal 4: Sustain and nurture high-class semiconductor design manpower at a growth rate of 20 percent year-on-year to double its current output levels to reach a workforce size of 400,000 in the next five years.

The very first goal itself is a bit far fetched, but not that it can’t be achieved. To reach anywhere close to this goal, a concerted all round effort would be required from all in the industry. The fourth goal would have been better as the first goal, but never mind.

The second goal looks fine, but it is the third goal that seems a bit far off. This is April 2011, and still, there are talks about capitalizing on the indigenous demand in strategic sectors in order to provide impetus to the Indian fabless semiconductor industry?

I recall a discussion in mid-2005 where an industry expert mentioned that fabless was the way forward for the Indian industry! Between then and now, fabs were supposed to come up, but they failed. Nevertheless, one must not give up hope!

Is global semicon inventory level headed for oversupply in Q3?

Early this month, iSuppli had indicated that semiconductor inventory levels may have headed into oversupply territory in Q3.

It said: “Semiconductor Days Of Inventory (DOI) for chip suppliers are estimated to have climbed to 75.9 days in the third quarter of 2010, up 1.5 days from Q2. DOI in Q3 also was 4.8 percent higher than the seasonally adjusted average for the period.”

iSuppli added that the value of inventory was not been this high since the second quarter of 2008, when semiconductor suppliers’ stockpiles peaked at $35.4 billion.

Thanks to Jon Cassell and Debra Jaramilla at iSuppli, I was able to speak with Sharon Stiefel, analyst for semiconductor inventory and manufacturing for iSuppli on this situation.

Is there really an oversupply?

Sharon Stiefel, iSuppli.

I asked Sharon Stiefel that given the growth that 2010 has seen so far, why are semiconductor inventory levels heading into oversupply territory in Q3?

She said that semiconductor inventories, overall, have risen both in terms of DOI and dollars for the past several quarters, and not yet achieved pre-recession levels last seen in 2008. “The overly lean conditions of 2009 and early 2010 are giving way to inventory levels, which are more appropriate for the strong growth experienced in 2010.

“Oversupply in Q3 2010 is not a foregone conclusion, but is possible that if the companies are not able to match manufacturing run rates with demand as the year winds to a close,” she added.

Which sectors have been witnessing or recording some softness in demand and why?

Stiefel said: “Companies reporting Q3 revenues over the past two weeks have reported a softening in demand, particularly in PC and consumer end markets, attributed to the continued uncertainty in the global economy, leaving consumers unwilling to spend.  A company with more exposure to these sectors has more potential of excessive inventories, versus a company with a more balanced product portfolio.”

Industry needs to moderate inventories
It is also said in iSuppli’s release that: ‘The industry will need to moderate inventories at the appropriate time in its growth curve in order to capture current revenue opportunities while they still exist.’ So, when exactly is that appropriate time?

Stiefel noted: “The appropriate time is when sales opportunities exist – projected quarters of growth, rather than revenue contraction. Semiconductor revenues are projected to grow in Q3 2010, contract in Q4 2010 and Q1 2011, and then resume moderate single digit growth for the remainder of 2011.”

TSMC enables business growth through effective and collaborative innovation

Dr. Jack Sun, CTO and VP, R&D, TSMC.

While speaking on ‘Enabling business growth through effective and collaborative innovation’, at the recently held International Electronics Forum (IEF) 2010 in Dresden, Germany, Dr. Jack Sun, CTO and vice president, R&D, TSMC said that TSMC leads and invests heavily in competitive, energy efficient, and eco-friendly technologies to enable product innovation, such as CMOS platform scaling (40/28/20nm/FinFET, low-R,ELK..), More-than-Moore, and integrated package/3D-IC.

He added that TSMC strives for manufacturing excellence and capacity, and economy of scale, to support customers’ innovation and business growth. The company is also pushing the acceleration of EUV and Multi-Ebeam capabilities for cost-effective density scaling. His clear message was, “We must and can collaborate to innovate and overcome the technical and cost challenges.” That is, a collaborative innovation among the government, the industry and the academia is required to overcome the cost hurdle.

Earlier, he said that the IC industry will continue to grow — with a 22 percent growth likely in 2010, reaching $276 billion. During 2011-2014, he estimated a 4.2 percent CAGR for the IC industry and 7.2 percent CAGR for fabless companies.

Dwelling on the application and technology trend, Dr. Sun pointed out that the trend is SoC and heterogeneous integration at chip, package, and product level with embedded power-efficient processors, hardware accelerators, and special features.

TSMC continues to further expand its offering by including packaging services and silicon foundry services. This will allow the fabless semiconductor companies to achieve ‘More than Moore’ gains in integration by using TSMC as a foundry partner.

Dr. Sun also detailed the how TSMC enables innovation by providing best-in-class technology and design solutions.

* ‘Green’ CMOS technology platform – Moore’s Law.

— High density energy-efficient transistors and interconnect $ most desirable for embedded SoC.

— Pushing reduced-cost lithography and 450mm.

* Eco-friendly fine-pitch integrated packaging technology and 3D-IC

* Special/derivative technologies to interact with the external world – More-than-Moore.

— MCU, MEMS, RF, analog, BCD power, CIS, Display Driver, etc.

— Re-use and leverage compatible CMOS platform backbone and IP

* Open innovation platform and ecosystem of IPs.

TSMC’s 20nm and 28nm leadership

TSMC’s CMOS platform leadership clearly highlights future 20nm technology as well as 28nm leadership. Dr. Sun also highlighted how customers innovate with TSMC 40nm. Currently, there are more than 60 customer product tape-outs. More than half are in production with D0 <0.1 ~ 0.18. The monthly 40nm CyberShuttle has delivered >780 blocks for design/IP verification.

While on TSMC 28nm technology highlights, Dr. Sun said that the 28LP (poly/SiON) yield is approaching mature level on 64Mb SRAM. Also, the 28nm HKMG (28HP/28HPL) development is on track. Here, TSMC developed Gate-Last process with N+/P+ work function and superior performance, yield, manufacturability, variability,and reliability.

Also, it achieved double-digit 64Mb yield, good Vccmin, close-to- targets transistors, and good pre-qual reliability.

Dr. Sun added that a steady stream of shuttles have been running since the first one was launched in Jan’09. Almost every shuttle is 100 percent utilized. This implies an intensive customer engagement by TSMC. Over two dozen customers are said to be working with TSMC on 28nm technology across all application segments.

Now, on to TSMC’s 20nm highlights. The key technology features include planar transistors with 2nd-generation HKMG and 5th-generation strained Si; low-resistance ultra-shallow junction with M0 and enhanced millisecond anneal and silicide; and enhanced ELK and 2nd-generation Low-R interconnect.

Some other 20nm tehchnology highlights include immersion lithography with innovative patterning and layout solutions to achieve 2x density over 28nm, with the EDA tool likely to be ready by mid 2010. Also, the design rules are compatible for EUV and Multi-Ebeam insertion for selected layers in 2013-2014. Wow, this is really something!

Qualcomm, AMD head top 25 fabless IC suppliers for 2009; Taiwan firms finish strong!

Top 25 fabless IC suppliers for 2009. Source: IC Insights

So, IC Insights has revealed the top 25 list of fabless IC suppliers for 2009! No surprises, Qualcomm still leads!

However, AMD is the surprise runner-up, for now. The reason being: AMD became a fabless company by including its Dresden, Germany fabs as part of GlobalFoundries spin-off. IC Insights included all of AMD’s sales for 2009 in its study.

Some other interesting points
First, as many as nine fabless IC companies — all of the top nine companies — had sales of $1 billion or more in 2009. These are: Qualcomm, AMD, Broadcom, MediaTek, nVidia, Marvell, Xilinx, LSI Corp., Altera and Avago! And you still believe there was a recession in H1-09?

Movers and shakers
So, who are the leading top movers and shakers?

* nVidia dropped down two places from 3rd in 2008 to 5th in 2009.

* Marvell also dropped down two places from 4th in 2008 to 6th in 2009.

* With AMD coming in 2nd place, Xilinx, LSI, Altera and Avago — all dropped down one place each.

* CSR dropped down three places from 12th in 2008 to 15th in 2009.

* MegaChips dropped down four places from 15th in 2008 to 19th in 2009.

* Conexant had the steepest drop — dropping 11 places down, from 14th in 2008 to 25th in 2009.

* MediaTek moved up one place from 5th in 2008 to 4th in 2009.

* Realtek moved up three places from 16th in 2008 to 13th in 2009.

* Mstar moved up five places from 19th in 2008 to 14th in 2009.

* Richtek had the steepest climb — moving up by 11 places, from 35th in 2008 to 24th in 2009.

The list comprises fabless IC suppliers from the USA — which has 17 representations, including nine suppliers in the top 10! Taiwan has six representations, with one — MediaTek — figuring among the top 10, well, top five actually! Europe and Japan have one representation each — in CSR and MegaChips.