Industry trend: Finding high quality engineers in the US is a real challenge for companies. With the economic meltdown and the high cost of education in the US, the influx of foreign students has slowed down, which would translate to less engineers available to companies. In conjunction, the cost of doing business in the US has risen, which encourages companies to find alternative locations. As a result of the above two forces, India has become a hotspot for design service companies eager to serve the US market. A word of caution ? there is a big difference between a design service company and an AMS design service company. A high level of commitment along with professional training is required from engineers to be successful in AMS design services. A handful of companies based in India like Cosmic, Sasken, and Wipro are already competing globally in this domain.

As the world knows, software services and digital design services are very mature markets in India. In this domain, work is done from offshore either through companies like Infosys, Wipro, Mindtree, and Sasken or through subsidiaries of MNCs in India. Almost all US semiconductor companies have design centers in India that are located in hotspots like Bangalore, Noida/Gurgaon, Pune, or Hyderabad.

In contrast, there has been more reluctance to outsource analog design, since it is considered a black art. This is changing as the trends favoring the migration of software and digital work to places like India are also relevant to analog design and test areas.

Growth of market: Software, firmware, digital design outsourcing, and local markets have already grown to large numbers in India. The IT and BPO industries of India is expected to have a growth of over 7 percent during 2009-10 fiscal year and to log revenues of $64 billion. According to the latest forecast of NASSCOM, the IT and outsourcing industry will log an export growth of 4-7 percent this fiscal to log $48-50 billion in revenues. Domestic revenue for the industry is expected to grow much faster at 15-18 percent to touch $13 billion, the industry lobby says in its annual survey on the sector.

In the last few years, AMS design services market is steadily gaining momentum. The market stood at about $1 billion in 2007 and the compound annual growth rate (CAGR) is expected to climb by 11 percent from 2006 to 2011, according to Gartner estimates.