Texas Instruments: Taking charge of the Indian electronics environment
Date: Friday , November 30, 2007
Earlier this year, Texas Instruments President and CEO Rich Templeton made a profound statement, “In the last 20 years, India changed TI. In the next 20, TI will work with its customers to change India.” Twenty two years back Texas Instruments bet on the Indian talent and became the first multinational to set up an R&D center in India. The 1400 engineers here are developing complex silicon designs and embedded systems and software products, making it one of TI’s largest design centers outside the United States. There is hardly any product of TI today that is not touched by TI India engineers at this world-class R&D center. With 415 patents in its fold— the highest number of U.S. patents granted to an organization in India—TI India has won the laurel of being the most innovative company in India. Now TI is betting on the Indian electronics market. Though this market is relatively small compared to the other markets, the company believes it will be a different story in a few years.
Texas Instruments, the pioneering company where engineer Jack Kilby invented the integrated circuit and essentially launched the modern electronics business, has led the market for specialized cell phone chips— transforming a humble cell phone into a multi-featured portable device, with its highly differentiated and powerful OMAPTM applications processor. Today we find TI’s digital signal processing (DSP) technology in most of the cell phones sold across the world. Engineers at TI are integrating even more functions on a single chip, so that cell phones can be used as digital camcorders, digital TVs, and 3-D gaming platforms. You can even carry your slides in your cell phones, powered by OMAP, and make your presentations directly from the handset!
TI’s DSP chips are also used in security and surveillance, wireless infrastructure, video conferencing, IP phones, industrial, medical and automobiles. TI’s digital light processing (DLPTM) technology for digital cinema and front projection systems are becoming increasingly popular as well. As the global demand for electronics rises, so should TI.
The company has enjoyed steadily growing sales in recent years, from $12.6 billion in 2004 to $14.3 billion last year, and profits have zipped along from $1.8 billion to more than $4 billion over the same period. While its supply contracts with mobile phone manufacturers including Nokia and Motorola grab all the headlines, the bulk of TI’s business comes from chips that are nowhere near as attention-getting, but vital to every electronic system in the world. About 40 percent of the company’s sales in 2006 are its analog chips.
It may appear paradoxical—but as the world becomes more digital, the more is the need for analog chips. Analog chips gather the sights, sounds and textures of the real world—the temperature in a room, images from our body, our voice and the pressure we exert—so they can be converted into a digital signal that can be processed efficiently and transmitted, before being converted back to analog. This allows us to enjoy the sights and sounds that we experience. TI is by far the world’s biggest supplier of these analog chips. As long as human beings use gadgets of practically any stripe—from cell phones, camcorders and PCs to energy meters, generators or ultrasound machines—there will be a need for analog chips like those that TI makes.
While TI’s analog revenue grew robustly last year, the company expects its role to expand in the years ahead. Contributing to this growth story will be the opportunity that exists in emerging markets like India. “Analog has become an even more important opportunity for us than before. With our rich analog portfolio—be it in data converters, interface chips, amplifiers or power management—we have the opportunity to solve our customers’ needs as they design electronic gadgets of any kind. That’s a really powerful position to be in—to be able to add value to any electronic system for any application,” says Biswadip (Bobby) Mitra, Managing Director of Texas Instruments India.
However optimistic it may sound, TI can play well considering the vast repository of analog components it brings to the table. The power of analog is such that it opens the door to any customer. “With more than 16,500 analog products in its repertoire and hundreds of new products in the pipeline, TI’s portfolio has become stronger, more differentiated and more attractive to a broader set of customers. With the breadth of analog chips we have, we can have an opening with every electronics customer,” says Mitra. “Added to this, TI has a large number of analog application specialists and the needed tools and documentation to make analog design easier and faster. This allows us to effectively work with our customers worldwide and in emerging economies like India, as they innovate and build new applications. ”
The numbers back TI’s drive: According to the Indian Semiconductor Association (ISA) and Frost & Sullivan, the total available market in the semiconductor sector in India will grow from $1.26 billion in 2006 to $3.18 billion in 2009—a CAGR of 36 percent. Everyone, including TI, wants to grab a significant portion of this market.
Taking the Pulse
Mitra sees the medical field as a big growth area for India’s semiconductor industry in the coming decade. What interests TI is that analog and digital signal processing are emerging as powerful forces in building innovative semiconductor solutions for OEMs in healthcare. Semiconductor technology is opening up new possibilities for medical devices that improve the quality of life and increase the life expectancy. “While the life expectancy in India is increasing in general, there is still a wide gap between ours and that of developed countries. Innovations in semiconductor technology can be done by working closely with our customers in this space to help reduce this gap. University research in medical electronics also has a key role to play to spur innovation,” says Mitra.
Caring for the aged population becomes a daunting challenge, fuelling the demand for biometric healthcare devices of all kinds including those that are commonly used in the households, such as blood pressure monitors. Then there are hand-held devices like glucometers that help people with diabetes check and measure their daily insulin levels. It is essential that the battery life of these devices is as long as possible. This is even more critical when the chips get implanted. And TI’s ambition is that device manufacturers will increasingly use the company’s analog chips and ultra low power microcontrollers.
In equipments like magnetic resonance imagers (MRI), hearing aids, electrocardiograms (ECG) or ultrasounds the chips required are quite different. What’s required is powerful digital signal processing. And this is no doubt TI’s forte. Its OMAP, a high performance application processor in the industry, empowers equipment manufacturers to push the boundaries of healthcare management systems. Then there’s high-end medical imaging. Doctors want almost HDTV-quality images because they want to do image-assisted surgery. “Think about the opportunities for OMAP and analog parts inside that equipment,” a buoyant Mitra says.
When Templeton was in India earlier this year he said, “I will not stick my neck out and single out the medical equipment business as the biggest new driver of semiconductor sales for say, 2010-2020. But if you consider that something like 15 percent of the gross domestic product of the U.S. is spent on health and medicine, and such spending is about 12 percent of Japan’s GDP, then you can well imagine how important this will be for the semiconductor industry.”
The most characteristic feature of the medical equipment market in India is clearly the need to reach hundreds of millions of patients. It is here that TI plays its cards. It has customers who have developed ultrasound machines in a 10 by 12 inch portable package so that they can get it closer to the patient. With its broad and compatible product portfolio, TI enables equipment manufacturers to develop several different devices using a variety of DSPs and analog chips. It also leverages its best performance, power consumption, and price wherever needed, thereby allowing customers to focus on new applications and features that differentiate their product lines.
The medical equipment industry in India was estimated to be around Rs 12,000 crore as of 2006 and is expected to grow every year at 20 percent to touch Rs 40,000 crore by 2012. About 90 percent of the medical equipment sold in the Indian market is imported. However, domestic manufacturing is slowly taking off. TI would like to do everything it takes to accelerate the momentum and gain market share.
In Love with the Industrial Market
Another segment of interest to TI that has a huge appetite for analog chips and microcontrollers is industrial electronics. Industrial applications, which include areas as varied as factory automation, lighting, energy management systems and weighing scales represent a huge opportunity in India. Scanning the breadth of India, one would know TI’s chips— low power microcontrollers with wireless RF (its MSP430 coupled with the Chipcon family of products), amplifiers, interface chips, and power management systems—being used widely in applications such as motor control, factory automation, building security, retail surveillance systems, robotics, test and measurement, power measurement, data-acquisition systems, and uninterrupted power supplies.
Three big areas that TI is exploring are industrial automation, energy metering, and inverters for stand-by power. As energy efficiency becomes a key specification in each of these areas, TI’s energy-efficient semiconductor products continue to be in demand. “Anyone in industrial electronics loves the power efficiency leadership of our MSP430 microcontrollers, C28x class of Digital Signal Controllers, and our analog solutions. Name any industrial application and be sure that the system can be built using the building blocks of TI’s MSP430, C28x DSP and Analog. Emerging opportunities in this space where these chips find applications also include renewable energy sources such as solar, fuel or wind energy. As energy management becomes more important, and increasingly mandated by the Governments, we will see a steep increase in customer activity in the industrial space,” says Mitra.
The demand for electronic metering systems gained momentum especially after the power sector reforms were set in motion. The annual market size in India for energy meters is estimated to be 30 million. TI’s chip makes these electronic metering systems tamper-proof. TI has partnered with several manufacturers in the country for supply of its chips. The company also works with its customers as they build newer applications like remote meter reading on the existing electronic meter platform, thereby allowing them to differentiate themselves in the marketplace.
Similarly, with India in the grip of a power crisis, generator and inverter manufacturers have a reason to cheer. While products like standby power generators, inverters, uninterrupted power supply (UPS) systems and storage batteries are finding an expanding market, TI chips have made their way into these products.
“One needs to understand that the industrial market is largely fragmented. Key to be a winner in such a marketplace is to work intimately with the small but important customers who are shaping the next generation of India. They are under pressure to differentiate. They have to innovate to survive and win. We participate at the design stage by taking their existing board and co-architecting it with the customer. We optimize their design for system cost and area, performance or power so that it becomes a win-win situation for the customer and TI. To solve emerging system-level design challenges, you need customer partners that can combine their expertise with ours,” says Mitra.
Other Emerging Opportunities
Mitra and his team are betting on the growing defense, aerospace and automotive electronics market in India too. Likewise his team sees the education market as a growing opportunity too—with several OEMs targeting the increased education spending by the middle class in India. TI’s OMAP platform, MSP430 and analog chips (including Chipcon products) are central to such systems.
Yet another opportunity that becomes important to TI as the markets evolve is one that is driven by the multinational OEMs. Just like what TI zeroed on 22 years back, many MNC OEMs are leveraging Indian talent to do system-level design from India. These engineers are now playing a key system design role, both for India’s market and export to world markets. As they are designing complex electronic systems in India, they will need local support from semiconductor companies like TI.
The same is true for Electronic Manufacturing Services companies like Flextronics and Solectron, who design and manufacture for their customers. For such companies, application support could make or break buying decisions. Simply put, whether TI’s chips will be used or that of its competitors’ will depend on the availability of local systems and application support. It is here that the deep competencies that the R&D, and in particular hardware applications engineers at TI India have developed over the years, will ensure that it is ahead of others
in the fray.
On Top of the Wave
TI has extended its footprint in India by expanding its sales offices and partner network. It is also adding sales engineers and field application engineers to be closer to its customers in India. The company has four distributors. Customer centricity being its key strategy, the company will soon have presence in the tier two and tier three cities.
“It doesn’t matter that the India market is a small fraction of the world semiconductor market today. We can wait and invest when it expands. However, that would be too late. We don’t need a crystal ball to know that the Indian electronics industry will become significantly big as our customers continue to innovate. These fundamentals will not change and it gives us the confidence that it is a bet placed right. Such opportunities to impact the lives of hundreds of millions in our country, through innovation in electronics and semiconductor products do not come often. Truly this is a once in a lifetime opportunity. We must seize it, now,” notes Mitra.
In August 2005, Texas Instruments chairman, Thomas J Engibous on his India visit made a phone call from India to Europe on a live cellular network using the industry’s first single chip solution for ultra low cost handsets. This new chip targeted for developing economies—appropriately named LoCosto—was designed across various R&D sites of TI, with the India center steering the development. The company’s engineers integrated the functions of the digital, analog and high frequency RF chips onto a single one in order to bring down the price of a cell phone, and increase battery life significantly. Several key wireless OEMs are already using these in phones sold in countries including China, India and Eastern Europe.
The LoCosto story exemplifies innovation. Starting in 1985, TI India has moved up the stages, from designing simple components to innovative and differentiated IPs, and complete System on Chips. The company has developed Ankoor, the first DSP to be designed from the concept stage in India; Mantra, the world’s fastest control DSP; Malhar, the world’s fastest floating point DSP; TLV1562, the world’s first programmable resolution analog-to-digital converter; and DM642, the world’s fastest fixed point DSP for emerging video and imaging applications.
Hundreds of TI design engineers in Bangalore help create leading silicon and system solutions that determine the direction of the electronics industry. They are also involved in the design and development of high-end digital signal processors, analog ICs, systems software and applications software in the areas of wireless handsets and infrastructure, industrial, automotive electronics and medical. Engineers at Bangalore are also helping to bring greater intelligence to video technologies, such as security cameras, surveillance and video IP phones.
In fact, the driving force behind TI’s market initiatives is its R&D legacy in the country. The 1400 engineers at TI India provide a rich skill set across all product lines of TI. “Local R&D is a huge thrust to drive TI’s products into the market. Customers can look to draw in from this technically competent pool of engineers,” says Mitra. It helps the other way too—it strengthens the R&D. When R&D personnel interact with customers, they get so much enriched that the next time they design, their competencies and hence the solutions they create are much better.
At the core of TI India is its innovation engine. Engineers at TI India get their heart pumped up because they get to work on state-of-the-art technologies—in terms of circuit design, embedded systems or software techniques. “The high degree of innovation we offer sets some of our best minds in the world in motion,” notes Mitra.
For the deep-dive techies, the technical ladder at TI India is not just unique in its concept and implementation, but is a powerful endorsement of the organization’s intent of rewarding and recognizing visionary technical leadership. The technical ladder has levels that parallel the management ladder. There is a unique peer election process through technical councils and well-outlined parameters for evaluation. The rigors of the selection process notwithstanding, employees are recognized not just through job titles or formal organizational announcements, awards and compensation; but by supporting them with a mentoring and development process, encouragement and participation in various technical forums—the most potent of them being peer recognition.
The prestige associated with being on the tech ladder is tremendous. Speak to any TI engineer and you will know that the tech ladder is what many aspire to be on. Being on the tech ladder automatically spurs innovation. Over hundred technical leaders at TI India are in various rungs of TI’s technical ladder today. Notable among them is Mahesh Mehendale, who leads the Video Center of Excellence. It was in 2003 when Mehendale became the first TI Fellow from Asia. Quite interestingly, back in 1991 Mehendale and Mitra were the first two from India to get elected through the worldwide peer election process of the tech ladder by being designated as Member Group Technical Staff (MGTS). Since then the duo diverged paths, one reaching the pinnacle of the tech ladder and the other the pinnacle of the management ladder in India.
TI also encourages small teams of people to identify opportunities, write business plans, and present them to the management. Based on the merit of the proposal, and customer traction, TI funds wherever it sees these proposals have the potential to get translated to a viable business opportunity. This is increasingly creating an intrapreneural spirit in the company. Engineers are getting the benefits of being involved in start-up like innovations, while having the benefits of the worldwide customer reach that a company like TI offers.
The learning opportunity for engineers at TI is also enhanced through its internal University—referred to as PragaTI. Some of the world’s best experts in various domains of semiconductor design are faculty members of PragaTI. TI engineers, even the experts, continuously refresh themselves with the state-of-the-art techniques through active engagement with the world-renowned faculty.
TI India also partners with several Indian companies to develop complex silicon designs and embedded software products. TI’s partner companies deliver software and hardware design services, or license IP components, reference designs and production—ready designs on TI’s silicon. “Through our cooperation with several Indian companies in silicon design and embedded software, TI is leading the creation of a significant ecosystem of companies in India. This is an area where India is increasingly playing a key role and one that should be leveraged as a rapidly emerging opportunity for
the country,” says Mitra.
Around ten years ago, TI India started a university initiative program, under which it partners with several universities to do research. Today it partners with over 650 universities across the country—by far the largest network amongst the companies in this space in India. TI also recently added Indian Institute of Science as a Leadership University. IISc joined the likes of Georgia Tech, Massachusetts Institute of Technology and Rice University in TI’s research network to drive innovation in areas such as digital signal processing, analog and mixed signal systems. Under this program, IISc will receive a seed funding of $400,000 over five years, an extension of the existing funding received by the university. TI has been working with IISc for over 10 years now.
“Sergei Bubka, the famous Ukranian pole-vaulter made it a habit to break his own world record by simply raising the bar every time,” says Mitra. “At TI, we do the same. Every time we come up with a new design for our customers, we go back to the drawing board to come up with something more creative, and of higher value. That’s innovation at work, in TI,” quips Mitra.