Indian technology companies facing cost pressures from a global economic slump and domestic competition are seeking a way out by boosting R&D investments to develop semiconductor intellectual property.
Ittiam Systems and Cosmic Circuits are pursuing the pure IP route, having rejected the services business; service providers Wipro and Mindtree are now developing chip IP and are using it to attract new services around their IP products.
Ittiam Systems is India's largest pure IP company, focusing on advanced media communication applications for which software solutions are either unavailable or too expensive. Its IP includes synthesizable RTL cores that can be integrating into an ASIC being designed by its customers.
In 2005, Ittiam began investing in multi-format high-definition video decoder IP. The video decoder can handle most video standards, enabling SoCs for HDTV and HD-DVD applications," said Srini Rajam, Ittiam's chairman and CEO.
"Venture funds and investors believe that IP companies cannot scale in revenue," said Ganapathy Subramaniam, CEO of Cosmic Circuits, an analog semiconductor IP company. "ARM and Rambus have proven them wrong. But it is also a fact that while there are many IP companies in the world, only very few of them have been able to scale in revenue."
Cosmic has created over 75 analog IP cores for portable power management, video analog front-end, WLAN and WiMax analog front-ends. The company works with more than 10 foundries to create IP cores from 0.35 nm to 65 nm.
"India is slowly emerging from services and getting into the business model of licensing IPs," Subramaniam added. Market researcher Gartner Inc. ranks Wipro-NewLogic as the leading global provider of WLAN and Bluetooth IP, estimating that it holds two-thirds of the global market for IEEE 1394 IP cores. Wipro's chip IP arm is focusing on wireless and wireline connectivity.
"Developing IP is an important differentiation for the leading design service houses and...wireless communication, analog components and DSP-based IPs are the areas of promise for Indian companies," said A. Vasudevan, vice president of semiconductor and system solutions at Wipro Technologies.
Mindtree Ltd., which specializes in short-range wireless technologies, said it is focusing on Bluetooth IP. It has invested in ultrawideband technology, and plans to offer UWB IP in future products, according to S.N. Padmanabhan, senior vice president for semiconductors at Mindtree.
Mindtree also has several peripheral IP blocks usually bundled with the Bluetooth or UWB products. "The entry barrier is very low if someone has to build synthesizable IP at the RTL level," Padmanabhan said. "The semiconductor industry needs various IPs [and] smaller players can provide small, standards-based, popular IP blocks." Building IP blocks is the easy part, he added, noting that "marketing them is the toughest."
Sridhar Mitta, who headed Wipro's unsuccessful IP startup EnThink, acknowledged that India's track record for IP development is not good. "The [lessons] of EnThink are that product or IP companies will not get attention in large service companies," he said. "Indian companies will see IP business as an adjunct to their service businesses."
Matta said the best opportunities for Indian success in IP development are in volume markets like PCs or cellphones. Adopting standards and creating new ones will also boost India's IP efforts.
Gartner forecasts that Indian IP development will be dominated by big chip makers here as well as independent IP providers. "Some of the independent Indian IP providers are Wipro, Cosmic Circuits, Mindtree and HelloSoft," said Ganesh Ramamoorthy, Gartners' principal research analyst for semiconductor IP and design.