India need to start creating IP in embedded space

BANGALORE, INDIA: As we see a big surge in India Embedded Industry, the more number of avenues are opening up for Indian companies to target and address the needs in embedded space.

In an interaction with Abhigna N G of CIOL, Poornima Shenoy, president, ISA says its high time that the Indian companies focused on industry segments like automotive, industrial, portable/wireless and consumer electronics which are heavily dependent on electronics taking the advantage of huge talent pool in India.

CIOL: How do you see Indian developer community opting for embedded industry as a career option as against software development?

Poornima Shenoy: The embedded software market will expand as non-captive companies move up the value chain to offer more high-value activities around middleware and develop applications for them. The distinguishing factor for design services will be value rather than cost, and as customers expect more value there will be pressure on design service companies to innovate and provide better quality services.

In addition to this, the growing Indian consumer market will spur the creation of India-specific products, leading to an increased focus on India as a market for design services companies. The increased expenditure forecasted in certain sectors, including telecommunication, defense, automotives and consumer electronics, which are heavily dependent on electronics, will contribute to the growth in the next five years. All this factors will create a lot of job opportunities for Indian engineers.

Moreover, we have reached a stage where Indian IT services companies compete on value addition and not the cost arbitrage. The next logical step for us would be to move beyond services and start creating intellectual properties.

CIOL: Highlight on the scope of choosing embedded designing as career for qualified engineers graduates ?

PS: India has a large number of qualified engineers graduating from colleges of repute. Engineers specialized in Electronics & Communication, Electrical and Electronic Engineering, Physics and Master’s /PhDs in these subjects would fit the requirements of the design industry. Knowledge of hardware as well as software is expected of the engineers to work for this sector.

There are huge job opportunities too in this field. For every VLSI engineer in the semiconductor industry, 10 design engineers and 100 application software engineers are employed. Stock options, flexi-time, exposure to high technology and global practices are the hidden benefits.

Leading companies in areas such as device conceptualization, IC design, IP development, hardware board development, embedded software development and systems integration hire talents in this industry.

CIOL: How do you see Indian product companies’ competency as compared to other MNCs?

PS: The Indian semiconductor industry has developed expertise in processes ranging from logic and architectural synthesis to chip tape-out. Today, India is a global hub for mainstream R&D and Indian engineers are working on some of the most advanced technologies in the world.

India is witnessing the emergence of products that are completely conceptualized and developed out of India and this trend will continue. Most of the home grown companies started off as service companies taking advantage of availability of talented manpower and built the entire ecosystem to support this system. However, going forward, this trend will change as the rupee strengthens, wages increase, and the margins are affected.

Product innovation and creation of intellectual property would be key factors for companies to sustain growth in future. Aligned with this strategy, companies can adopt a hybrid model for developing their own IP or product, in addition to continuing with customized design and development services to their customers in the semiconductor space.

By identifying the right technologies, associating with academic institutions for high-end research, we have the potential to produce some super successful companies in India.

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CIOL: What are the constraints faced by Indian designer community while designing for embedded devices?

PS:Improved skills to convert market needs to products
The market’s need for new products has to be identified. Experience in software-centric embedded products should be attained by the Indian industry to better leverage future opportunities.

Dollar Depreciation
The depreciating value of the dollar versus the rupee will put more pressure on the margins of services exports companies. Small and medium companies working on low margins will be hit harder.

CIOL: Is India's high consumption of mobile devices an advantage for semicon industry? If yes, explain how semicon plays a big role?

PS: According to a recently launched ISA-F&S report, the India semiconductor market grew 15.6 percent in 2009 in contrast to the global market that shrunk by 11 percent from 2008 and telecommunication industry was the primary driver for this growth. The phenomenal penetration rate of mobile handsets, massive expansion of communication infrastructure and drive to extend IT to the grassroots of Indian society are expected to be the growth drivers at least till 2011.

Although telecom is one of the hottest industries right now, India is primarily a services market. The focus of our telecom policies has mainly been on delivery of cost-effective services.

With impending roll-out of 3G, WiMAX services, increasing broadband, PC and mobile penetration and increasing security concerns, we have reached a stage where we need to take up domestic manufacturing seriously. When it comes to electronics manufacturing, 90 percent of the value addition comes from system designing and 10 percent from actual manufacturing. India has all the right ingredients like talent, R&D cost advantage and resources to make a success story out of ESDM.

CIOL: According to you, what are the emerging areas in India and who are using embedded technology to the core?

PS: Telecommunications, Consumer Electronics, Automotive Electronics and Medical Electronics are some of the verticals that will create a lot of potential.

CIOL: What are the trends influencing the development of embedded industry?

PS: Embedded software development companies in India will have to create a strategic advantage for them in order to succeed in the industry.
* IP creation will lead to royalty-based models as well as high-end expertise in specific domains in the embedded software value chain.
* Having a local manufacturing ecosystem will also boost this industry with product development and roll-out happening from India.
* Companies which have been providing embedded design services are moving up the value chain by building reusable components and undertaking complete system development, i.e. all levels of software development.
* There will be a strong focus on increasing margins and adopting business models which are not linearly dependent on the manpower.