Chip Design Services To Grow At 22%

23 Apr 2008 | Print | Digg! Digg IT! | del.icio.us del.icio.us | Permanent Link

The Indian semiconductor design services industry is projected to grow at a compounded annual growth rate (CAGR) of 21.7 per cent, to $10.96 billion by 2010, from the present level of $6 billion. The industry is expected to clock a revenue of $ 7.3 billion by 2008-end.

These projections are part of the report `Indian Semiconductor and Embedded Design Service industry (2007-08)’ — compiled by the India Semiconductor Association (ISA) and International Data Corporation (IDC).

The key factors that position India as a favoured destination for semiconductor and embedded designs are the growing expertise and capabilities in end-to-end design, intellectual property (IP) development, a strong pool of engineers, emergence of outsourced third party design services companies and cost-effective products.

The report — which maps the market for very large scale system integration (VLSI), hardware/board design and embedded software industry and the market dynamics between the members of the eco-system — has presented a tremendous growth potential to the Indian semiconductor industry.

While ISA president Poornima Shenoy said the Indian industry growth is three times more than the global growth rate of around 7 per cent, IDC (India) country manager Kapil Dev Singh said the industry’s structure was changing as the proximity between the third party service providers and original equipment manufacturers (OEMs) for end-to-end product designs was increasing in the country. Companies are moving up the value chain from mere project execution to end-to-end development of products, the latter said.

On the workforce, the report projected an increase in jobs from 129,900 in 2007 to 218,800 in 2010, a CAGR increase of 18.8 per cent. At present, the bulk of the jobs are in the embedded software (82 per cent) followed by VLSI design (11 per cent) and hardware/board (7 per cent).

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