The Grind Behind The Vision Thing

MosChip, a fledgling Delhi company, realises a Pentium IV with its 40 million transistors is a Mercedes among chips, a prodigious feat of design. So MosChip's 4 mm die of silicon packs a mere 500,000 transistors-a Maruti 800 of chips really-but it's enough to imbibe a variety of new consumer devices and PC peripherals with limited intelligence, like a printer that can order its own ink when it runs out. Vice-President Vivek Gupta says the next step is to produce the chips in large volumes and sell it to original equipment manufacturers. ''We are targeting four products this year'' says Gupta.

The start-ups cannot afford a fly-by-night vision. While they realise it is unlikely they can design a Windows or a Pentium chip just yet, tech services can't use sweathouse standards. Back of the envelope calculations suggest that the licence for the engineers' software tools, for a 15-member design team, could cost between $400,000 to $1 million-just to get a foothold in the business. The rigorous testing of specialised products and allied software is vastly more than that needed for plain applications software. If a chip inside a cellular phone has bugs, the phone is as good as useless. With only 27 Indian companies certified for SEI-CMM Level 5-a measure of the strictest global standards-there is a long way to go.

Consequently, tech services need top grade engineers with multidisciplinary skills and a low turnover, something the software industry is not known for. For instance, developing a 16-bit chip for modern automobiles, requires at least 10 engineers-versed in design, communication and some auto knowledge-working for the better part of a year. The team must define the task, design the chip architecture; work on the logic design, simulate and verify its working-and that's the easy part. Real-life testing and software routing is highly complex, something only a handful of Indian companies could do.

Tech services require long-term relationships, the ability to collaborate with clients to convert ideas into products from day zero, and hold intellectual property issues as sacred. A handful of the biggies saw this coming some years ago. Networking giant Cisco, for instance, has worked with HCL for six years, with Wipro for four. French telecom giant Alcatel is working with Wipro to design chips for a classified product line. The work includes designing the chips, systems, very large scale integration (VLSI) and mating the chip with the product. ''For us, conceptualising the product and building volumes has become a competency,'' says S. Vasudeven, General Manager, VLSI design.

If the start-ups similarly show such vision, ''India is set to emerge as a major centre of design over the next few years,'' declares Arnab Chandra, an analyst with Lehman Brothers in the US. Luckily, global market trends seem to help. For the first time in history, the chip industry is down 12 per cent to $19.26 billion in 2001 from $21.89 billion last year. ''All the segments of Taiwan's semiconductor industry are seeing weakness: manufacturing, assembling, testing-except integrated circuit design, where revenues are expected to go up by 20 per cent,'' says Matei Mihalca, a independent software research analyst working out of Hong Kong. So Indian companies are looking at a big window of opportunity. If they take it, it could be a step towards the great it leap forward.

with additional reporting by E. Kumar Sharma

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