Microchip bets on India for growth

Wednesday, 17 October 2007, 07:00 Hrs
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Bangalore: Microchip Technology, US-based leading provider of micro-controllers and analogue semiconductors, is expanding its operations in India to meet growing demand for its products, design services and back-office support.

Although the Indian market accounts for a mere one percent of its worldwide sales, the $1-billion company is registering double digit growth on increasing demand for its products from diverse sectors such as automotive, telecom, energy distribution and industrial electronics.

"Growing demand for better energy management is leading to greater adoption of digitally programmable micro-controller solutions in motor, lighting and power-related applications," Microchip CEO Steve Sanghi told reporters here Tuesday.

"With double digit growth in the sub-continent as against single digit growth in developed markets, we see the Indian market playing a key role in our future prospects," he added.

In line with projections made by an Indian Semiconductor Association-Frost & Sullivan study recently, the Indian subsidiary is ramping up its headcount in marketing and sales, design and development centre and call centre for servicing its customers worldwide.

The subsidiary has trebled headcount in the development centre here to 150 engineers and 120 in the sales and technical divisions across 30 locations in the country during the past two years.

"The automotive, telecom and power distribution segments are fuelling the market for our micro-controllers in India, thanks to the record growth posted by these verticals in a burgeoning economy," Sanghi noted.

In the power sector, migration from traditional alternating-current (AC) induction motors used in fans and other consumer appliances to brush-less direct-current (DC) motors and permanent-magnet synchronous motors are leading to efficient energy management.

With about 500 customers across sectors in India, the company has been involved in training about 10,000 serving and graduating engineers through regional training centres in Bangalore, Chennai, Delhi and Pune.

"We have introduced micro-controller design courses in about 130 engineering colleges in Karnataka, Maharashtra and Tamil Nadu to groom talent required in the industry. Our design centre works on IC (integrated circuit) design, layout, applications development, software development and tools development," Sanghi pointed out.

As lead supplier of eight-bit and 16-bit micro-controllers and analogue interface products, the company equips its customers with latest technology and product knowledge by imparting training to their technical staff.

Of the $280-billion global semiconductor industry, micro-controllers account for $10 billion, with $6-billion coming from eight-bit chips, $3.3 billion from 16-bit and the remaining from 32-bit chips.

Independent studies by IDC, Gartner and Frost & Sullivan indicate the semiconductor industry will grow by 8-9 percent annually over the next two years, with growth in the Asia-Pacific region in double digits.

As against India accounting for about one percent of Microchips sales worldwide, the US market contributes 24 percent, China 19 percent, followed by Germany, Taiwan and other countries.

"Our design and development operations in India also generate 20-30 percent of total revenue indirectly by undertaking product design and application development to global OEMs and electronic manufacturing services," Sanghi added.
Source: IANS
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