We get 30% revenue from Indian designs: Microchip CEO

Bangalore, Oct. 16 India’s impact in the global semiconductor business is larger than its rank as a market. The country accounts for a mere one per cent of the $280-billion global semiconductor market.

“Designs from India are responsible for 20-30 per cent of our revenue worldwide,” said Mr Steve Sanghi, President and CEO of top chipmaker Microchip. India’s domestic market is worth only $2.8 billion.

The US-based firm has recorded net sales of $1.04 billion and will ship the 6 billionth microcontroller in next January.

Microcontrollers are chips that make tools and vehicles smarter. Microchip’s microcontroller is the brain behind Lexus’ keyless entry and CDI (capacitive discharge ignition) that is available in two-wheelers today.

The automotive industry is just beginning to embrace semiconductor technology in India. “The majority of Indian cars have less microcontrollers. Air-conditioning, airbags, remote control entry and central locks have just begun to be adopted in the Indian car market and only now has the uptake started,” he said. Other industries that use microcontrollers are electric power metering and inverters.

Global prospects

Even as industry executives in the Indian semiconductor business are optimistic, the global prospects are not, according to Mr Sanghi. “The industry is adjusting to slower growth. For the past 30 years, growth was at 17 per cent, but the next 5-10 years will see a 7-8 per cent growth. Industry executives are cautious. The optimism on the semiconductor industry seen in India and China is not shared by other countries,” is the dismal picture he painted.

He said that the ‘Build the factory and customers will come’ theory does not work.

The company will not be establishing any fab unit in the country as its two plants’ capacity in the US are still underutilised.

Engineers at its design centre in Bangalore work on IC designs, mask layout, applications, software and tools development. The centre has developed products based on the PIC18, PIC24 architectures and digital signal processing designs.