Automotive Industry: a space of hope for Semiconductor Design

Date:   Wednesday , December 31, 2008

In spite of the current tough times, there are abundant opportunities for innovation, co-development and globalization in the semiconductor design industry, especially with the opportunities offered by the Automotive Industry. Even with the economic crisis gripping the automotive industry globally, it still remains one of the key customers for the semiconductor design industry and the demand has been growing continuously.

Technology per se, driven by the priorities of fuel efficiency, emission reduction and safety, automotive companies are investing heavily in semiconductor solutions for hybrid vehicles, driver assistance systems and in-vehicle networking solutions. At the same time, each automotive manufacturer is faced by the challenge of reducing costs without compromising on product features and quality.

OEMs are thus expecting semiconductor companies to deliver not just chips but the solution platform comprising of the hardware platform along with the software. A solution that is very close to the final product – validated, tested, certified and productized – which creates a very good opportunity for semiconductor solution makers.

Additionally, at the silicon level, nano design for small chips is a leading market growth indicator. The clear trend observed is Low Power Chips for both Consumer Electronics & Automotive Applications and more analog and Mixed Signal content rather than only digital content.

The market scenario for semiconductor industry is also changing very rapidly. Demand for electronic appliances is decreasing in the European and American markets and increasing in Indian and other APAC markets. Manufacturers are thus not looking at India as just the Outsourcing partner for design services but also as a huge market for the products. The future would be a playing ground for products ‘designed in India for Indian and APAC markets.

The downturn has made the companies look at sharing resources and developing a common pool of reusable components and talent. From collaboration between semiconductor companies on fabrication process development or fundamental R&D (research and development), the focus is now shifting to closer collaboration in wafer manufacturing, testing and assembly.

Semiconductor solutions development is a very high-tech business in which technology changes almost each day. Therefore, though the business is very satisfying, it also has its own set of challenges; the biggest being – Technology Change Management. Unlike conventional software development business, this requires huge investments to build the talent base, as availability of the right resources is scarce.

Thus the semiconductor design services industry has a huge potential for growth through the automotive industry but with its own challenges of technology and talent.

(The author is CEO & MD, KPIT Cummins Infosystems Ltd. KPIT Cummins Infosystems, a global product engineering partner to the Automotive & Semiconductor industry, is focused on co-innovating domain intensive technology solutions for Manufacturing corporations with special focus on Automotive, Industrial Machinery and Hi-Tech verticals)