India to be next chip manufacturing destination

BANGALORE: As the India Inc. is busy grappling with the BPO imbroglio, a rare traction has originated from an unchartered territory -- chip manufacturing.
Leading Japanese chip makers, Toshiba and Hitachi, have evinced interest to partner with the Indian firms for IP and designs which include both software and hardware solutions. Top officials from these companies feel this relationship may lead to manufacturing possibility at a later stage.
Tsuyoshi Kawanishi (72), popularly known as the father of the semiconductor industry in Japan and responsible for making Toshiba Corporation one of the world''s largest producers of semiconductors and Kazuo Kimbara (74), senior advisor emeritus of Hitachi (he joined Hitachi in 1951) were recently on India scouting for business opportunities here.
"Today, China is Japan''s most promising market but we are looking at other countries too because it does not make sense to put all the eggs in one basket. India looks very promising but the problem right now is there are no end products, assembly testing nor any back-end activities here. But three to five years down the line, things will change," Kawanishi added.
According to Kazuo Kimbara, a Hitachi veteran in about five years time, the demarcation between hardware and software will blur and India will be the next emerging market as far as high-end chip manufacturing goes.
"Today, China is the undisputed leader when it comes to low cost power and inexpensive but well-equipped infrastructure. And, moreover, there is a huge advantage in penetrating the huge Chinese market. But in India''s case we are looking at high end chip design which would include both hardware and software built into it," Kimbara said.
Kiran Karnik, president, Nasscom, too believes that R&D and IP creation in chip design is one of the big opportunities for 2004." Today, much of it is being done in captive units for Intel and Texas Instruments but we are looking at chip design and manufacturing to become a stand alone industry," he noted.
Interestingly, senior officials from UAE which has set up a chip manufacturing park in Dubai, were also in India recently to explore opportunities for creating a viable ecosystem for chip manufacturing where both India and Dubai would find synergy for chip making facilities.