Thursday, August 31 2006 11:19 Hrs (IST) - World Time -

Bangalore: A Taiwanese semiconductor industry team is currently visiting India's silicon hub to explore partnerships in chip design and embedded software to meet Taipei's long-term requirements.

The 19-member team from the Taiwan Semiconductor Industry Association (TSIA) has expressed interest in engaging Indian firms in meeting their requirements. Recognising India's core strengths in the two areas of the semiconductor triple play - design capabilities and software development, including EDA (electronic design automation) tools - major Taiwanese chip and electronic hardware manufacturers are keen on tie ups with Indian firms.

TSIA president T.A. Wu said that in the absence of an eco system and industry infrastructure for setting up manufacturing units, including fabs (chip fabrication plants) in India, Taiwanese firms would be ready to tap the design and embedded software development skills of Indian engineers.

He was speaking at a panel discussion here Wednesday between TSIA and the India Semiconductor Association (ISA) on 'Opportunities and areas of cooperation between India and Taiwan'. "Since Taiwan is an established manufacturing hub in the semicon industry, we see a great potential to outsource a host of requirements ranging from chip design, testing and packaging and embedded software to developing IPs (intellectual property) from our Indian counterparts," Wu said.

Choon-Leong Lou, president and CEO of Star Technologies Inc, a leading Taiwanese semiconductor firm with presence in China, Japan, Korea and Singapore, said his company would be willing to invest in India or collaborate with Indian semiconductor firms to build a supply chain management (SCM) system from testing and packaging to IP creation and design services.

"As part of our de-risking strategy and geographic expansion of the market, collaborations or joint ventures with Indian firms will be a win-win situation for competing globally and capturing the world markets," Choon pointed out.

To build a sound eco system and a strong SCM base, Choon said Indian firms would have to build domain know-how in the semicon sector and scale up their resources -- human as well as capital, for meeting the requirements of the Taiwanese semiconductor industry.

Lauding TSIA initiatives to foster partnerships with Indian firms, ISA chairperson Raj Khera said the association would come out with a strategic blueprint in the next six-eight months to facilitate collaborations between Indian and Taiwanese industries so as to leverage and complement their respective strengths.

"We are looking forward to the government's semiconductor policy, which is expected to be announced soon. Besides proactive measures and enabling infrastructure, a single-window clearance facility will help the nascent semicon industry to replicate the success story of the Indian software sector," Khera said.

Stressing on the need to move up the value chain, especially in the area of IP creation, Khera said with a paradigm shift in the global semicon industry, stakeholders in the triple play of design, embedded software and manufacturing have become inter-dependent to meet the growing demands of the digital world.

With India projected to emerge as a major hub for electronics equipment manufacturing and electronic manufacturing services (EMS) over the next decade for the domestic and global markets, the manufacturing sector is estimated to contribute $155 billion in 2015 as against $11 billion in 2005.

According to a study by Frost & Sullivan, a global IT consulting and research firm, the Indian semiconductor industry will have the potential to generate $202 billion in 2015, as against $14.3 billion in 2005, with prospects to employ around 3.6 million people by then (2015) as against 520,000 people last year.

The Indian semicon industry comprises semiconductor and embedded design, electronics equipment manufacturing and semiconductor manufacturing. Though India is still a negligible player in manufacturing, the study estimates Indian firms will generate $4.5 billion revenue by 2015.

As one of the major IC producers in the world, the Taiwan semicon industry's revenue is expected to be about $60 billion by 2010 from $20 billion in 2005.