Elections 2009! India's IT, semicon, telecom sectors welcome UPA's victory!

The results of India's 15th General Elections are nearly all out! The people's verdict -- voting Dr. Manmohan Singh and Indian National Congress (INC) led United Progressive Alliance (UPA) to a second successive term!

Undoubtedly, this is a vote for stability, continuity and good governance. It is hoped, the nation will have good governance that can be devoid of external pressures of coalition partners. In some ways, the verdict is a vote in favour of the economic policies of the Indian government leading to continued liberalization as well.

This 'pleasantly surprising' result of India's latest general elections has been welcomed overwhelmingly by leaders in India's IT/ITeS, telecom and semiconductor industries.

Dr. Ganesh Natarajan, vice chairman and CEO, Zensar Technologies and former chairman, NASSCOM, says: "We welcome the results of the election, which are indicative of a stable government at the Centre. In the current global economic environment, it is important that India has a stable and progressive political environment that can focus on long-term policies for the sustainable development of the country, even as it takes decisive steps to immediately put the economy back on a high-growth trajectory.

"The Indian IT-BPO sector is both an engine and a catalyst for the development of the Indian economy and we are confident that the government will continue to partner with this sector for leveraging the benefits of IT for India's domestic economy and through international trade. We also look forward to working with the government to promote inclusive growth and social benefits through the innovative use of IT. It is noteworthy that the biggest electoral process in the world -- the globally-admired Indian elections -- is through the use of EVMs, itself symbolic of the significance of IT for the country."

According to Dr. Pradip Dutta, corporate VP and managing director, Synopsys (India) Pvt Ltd: "There is an element of decisiveness in the election results this time, which bodes well for the industry. An anxiety around a fractured and short-lived coalition has been replaced by a confidence that the new mandate will provide a government capable of delivering sustainable long term benefits for both economy and business."

Jaswinder. S. Ahuja, corporate vice president and managing director, Cadence Design Systems (I) Pvt. Ltd, and former chairman, India Semiconductor Association (ISA), adds: "I am encouraged by the result. It is pro-progress. Also, the fact that Congress has a clear mandate should ensure that they can do the right things and make the bold moves that are needed at this time in order to ensure that India can claim its rightful place on the global stage, unencumbered by the compulsions of a fractured coalition."

N.K. Goyal, president, Communications and Manufacturing Association of India (CMAI), chairman Emeritus, TEMA, chairman, CTIA, and vice chairman, ITU APT India, notes: "The country has given a clear message that it wants development and growth, and has rejected the approach of divide, religion, caste, etc. The long awaited liberalization agenda will get a boost now. The industry is sure that there would be stimulus in economy, growth in manufacturing and sustained policies for economic uplift.

"Infrastructure development will also get encouragement. India's GDP growth will surpass 10 percent within the next three years. The telecom sector will see deeper penetration in rural areas, and broadband will match voice subscribers. We can expect 500 millions Internet connections by 2012."

S. Uma Mahesh, co-founder CEO of Indrion Technologies, points out that UPA's win is attributable to the following reasons:
* Rural support -- unemplyment program (though it had more party orientation), and loan waiver (though it didn't quite address all loaned people);
* Defocussed campaigning by other parties;
* Local factors (like 'poor campaigning', divided votes in AP);
* A 'seasoned-company' like approach by Congress that has to be commended, and the media support (similar for Democrats in US);

He adds: "Now the UPA has a chance of a lifetime -- with no excuses. They should be able to do 'real reforms', and provide 'real governance' over the next four years at least, before getting into elections mode again. This should include -- insurance reforms, labour laws, legal reforms, more liberal FDI, media reforms, and not to forget the rural sector, as well as the infrastructure."

Quite correct! I am very sure that the new UPA government, which should be sworn in quite soon, will take all of the necessary steps to boost India's IT/ITeS, telecom, semiconductor and solar photovoltaic sectors. There are several solar photovoltaic and semiconductor fab proposals that, I believe, need clearance as well.

Bundeep Singh Rangar, chairman, IndusView Advisors Ltd, the India-focused cross-border advisory firm, said in a statement today: "The government will have its task cut out with more than $700 billion worth of investments to be channeled in to India's infrastructure, power, telecom and pharma sectors over the next five years to provide the country a strong foundation to achieve the aspirational growth of 10 percent."

I would really like to see industry folks set their expectations before the new government at the center. If I can play a small role in carrying their messages, it would indeed be an honour!

More mature PV industry likely post solar downturn: iSuppli

Recently, iSuppli came out with a study on whether the current solar downturn will lead to a more mature photovoltaic industry! According to iSuppli, severe downturn in the global PV market in 2009 could actually have a more positive outcome for the global solar industry, yielding a more mature and orderly supply chain when growth returns.

Worldwide installations of PV systems will decline to 3.5 Gigawatts (GW) in 2009, down 32 percent from 5.2GW in 2008. With the average price per solar watt declining by 12 percent in 2009, global revenue generated by PV system installations will plunge by 40.2 percent to $18.2 billion, down from $30.5 billion in 2008.

"For years, the PV industry enjoyed vigorous double-digit annual growth in the 40 percent range, spurring a wild-west mentality among market participants," said Dr. Henning Wicht, senior director and principal analyst for iSuppli.

"An ever-rising flood of market participants attempted to capitalize on this growth, all hoping to claim a 10 percent share of market revenue by throwing more production capacity into the market. This overproduction situation, along with a decline in demand, will lead to the sharp, unprecedented fall in PV industry revenue in 2009," he added.

What about new entrants?
I quizzed Dr. Wicht how this downturn would lead to a more mature PV industry and what about the new entrants?

Dr. Wicht said: "We expect that the solar industry will invest more softly. The years 2007/2008 were special. Each of the hundreds of suppliers were ready to invest to reach 10 percent market share. This is not likely to repeat." Interesting! "Also, the new entrants will invest more modestly and closely linked to fixed customer orders," he added.

Role of FIs in solar
Are financial institutions paying that much importance to solar, especially in places such as India? This is an issue that was also raised and discussed at the recently held SEMI India solar/PV paper launch.

According to Dr. Wicht, the financial investors are definitely looking into solar, mainly in Europe and US. "PV in India is still at the very beginning. From my experience, there is not yet much attention of financial investors for PV in India," he noted.

Off-grid or grid connected apps?
Turning the discussion to off-grid vs. grid connected applications, I sought Dr. Wicht's advice on the route that should be followed. Again, this topic was discussed during the SEMI India meet early this month. Hence, the interest for India in this field is significant!

Dr. Wicht highlighted: "Installations for the off-grid remains a small portion in terms of the sold modules (MW), about 5 percent. The off-grid system selling might be a good way to start in places such as India. For cell and module production, on-grid is where the volumes are needed." Hope the Indian solar photovoltaics industry takes note of this valuable advice -- and it holds good for other regions as well.

I also asked him regarding a good low carbon growth strategy for developing countries. Dr. Wicht said that depending on the place, it could be a combination of wind, solar and biomass.

Compensating for Spanish whiplash!
According to iSuppli's study, the single event most responsible for the PV market slowdown in 2009 was a sharp decline in expected PV installations in Spain. Also, beyond Spain, the PV market is being adversely impacted by the credit crunch.

Therefore, why won't attractive investment conditions in other some countries compensate for the Spanish whiplash?

Dr. Wicht said: "The investigated countries start from a low level of installations and show long, administrative procedures, limits of feed-in tarifs and reduced capital access. They simply cannot compensate the 2.6GW of Spain in 2008."

Finally, what is likely to happen after the shakeout or fall in the coming years? He added: "System demand will grow stronger from H2-2010, absorbing the inventory, which has been built up in 2009 and 2010. From 2011, demand for modules will rise. It might pick up quickly. Then, companies, which are able to supply on short notice/(flexibility) can gain market share."

Let me see if I can convince Dr. Wicht to visit India and share his insights with the Indian solar/PV industry. Last, but not the least, thanks Jon!

Will solar downturn lead to more mature PV industry?

The severe downturn in the global Photovoltaic (PV) market in 2009 actually could have a positive outcome for the worldwide solar industry, yielding a more mature and orderly supply chain when growth returns, according to iSuppli Corp.

Worldwide installations of PV systems will decline to 3.5 Gigawatts (GW) in 2009, down 32 percent from 5.2GW in 2008. With the average price per solar watt declining by 12 percent in 2009, global revenue generated by PV system installations will plunge by 40.2 percent to $18.2 billion, down from $30.5 billion in 2008.

The figures present iSuppli’s forecasts of global PV installations in terms of gigawatts and revenue.

Fig 1: Global Photovoltaic System Installation Forecast in Megawatts, 2008-2013Source: iSuppli, April 2009

“For years, the PV industry enjoyed vigorous double-digit annual growth in the 40 percent range, spurring a wild-west mentality among market participants,” said Dr. Henning Wicht, senior director and principal analyst for iSuppli. “An ever-rising flood of market participants attempted to capitalize on this growth, all hoping to claim a 10 percent share of market revenue by throwing more production capacity into the market. This overproduction situation, along with a decline in demand, will lead to the sharp, unprecedented fall in PV industry revenue in 2009.”

However, the 2009 PV downturn, like the PC shakeout of the mid 1980s, is likely to change the current market paradigm, cutting down on industry excesses and leading to a more mature market in 2010 and beyond.

Fig 2: Global Revenues Generated by Photovoltaic Installations 2008-2013 in Millions of US DollarsSource: iSuppli, April 2009

“The number of new suppliers entering and competing in the PV supply chain will decelerate and the rate of new capacity additions will slow, bringing a better balance between supply and demand in the future,” Wicht said.

Blame it on Spain
The single event most responsible for the 2009 PV market slowdown was a sharp decline in expected PV installations in Spain. Spain accounted for 50 percent of worldwide installations in 2008. An artificial demand surge had been created in Spain as the time approached when the country’s feed-in-tariff rate was set to drop and a new cap of 500 Megawatts (MW) loomed for projects qualifying for the above-market tariff. This set a well-defined deadline for growth in the Spanish market in 2009 and 2010.

While the Spanish situation is spurring a surge in excess inventory and falling prices for solar cells and systems, this will not stimulate sufficient demand to compensate for the lost sales in 2009. Even new and upgraded incentives for solar installations from nations including the United States and Japan—and attractive investment conditions in France, Italy, the Czech Republic, Greece and other countries—cannot compensate for the Spanish whiplash in 2009.

The Spanish impact will continue into 2010, restraining global revenue growth to 29.2 percent for the year. Beyond Spain, the PV market is being adversely impacted by the credit crunch.

“Power production investors and commercial entities are at least partially dependent upon debt financing,” Wicht noted. “Starting in the first quarter of 2009, many large and medium solar-installation projects went on hold as they awaited a thaw in bank credit flows.”

After the fall
After 2010, the fundamental drivers of PV demand will reassert themselves, bringing a 57.8 percent increase in revenue in 2011 and similar growth rates in 2012 and 2013.

“PV remains attractive because it continues to demonstrate a favorable Return on Investment (RoI),” Wicht said. “Furthermore, government incentives in the form of above-market feed-in-tariffs and tax breaks will remain in place, making the RoI equations viable through 2012. Cost reductions will lead to attractive RoI and payback periods even without governmental help after 2012.”

Furthermore, lower system prices will open up new markets by lowering incentives and subvention costs. The lower the PV system prices are, the lower the incentives will have to be. Developing regions will be big the beneficiaries of these lower prices and thus will grow faster than the global average, Wicht said.

Source: iSuppli, USA

Indian silicon wafer fab story seems dead and buried! Should we revive it?

Now then, this will make a very interesting read! Back in October 2007, I had discussed the timing and the need for a silicon wafer fab in India, in-depth, with Anil Gupta, managing director, India Operations, ARM.

We have come a long way since then! There was all the hype last year about SemIndia's fab, which never really did happen, and eventually, BV Naidu moved on! Then came the rush to solar fabs. Recently, when I blogged on how a Qimonda buy could be good for India, I am told that it is really outrageous. No problem, it is merely a suggestion.

At times, I have got the feeling whether the Indian semiconductor industry is losing its way! However, when I see all around, it is hale and hearty, and business as usual -- fabs or no fabs!

It was interesting to meet up again with Anil Gupta of ARM, and to find out what he thought about what I thought!

Starting with an old question, whether India has the capability to sustain or even build a product development ecosystem? Gupta said: "We need the following for this:
* Entrepreneurs committed to product development and willing to take that risk.
* Investors willing to take risk on product development companies.
* Consumption (this will happen as the economy improves any way).
* Deep enough technical/technological knowledge/know-how to put reasonably competent end products together (It exists. Examples like Sukam, Tejas and other are there).

Indian fab story dead and buried
Turning focus on fabs, is the Indian silicon wafer fab story completely dead and buried now? Gupta notes: "When TSMC says they are running at only 38 percent capacity, one can imagine what the rest of the fabs must be going through. In any case, the Indian fab story was a longer term story and the current economic climate actually makes it further and further remote. So yes, it is dead and buried now!"

Wow! India probably flattered to deceive! However, I am an optimist, and hope that one day, India will have its own silicon wafer fabs!

Gupta adds: "What worries me now is the glut of the solar/PV fabs. By the industry estimates, solar/PV is a viable option only when the price of oil is >$100 per barrel (oil is at $40 per barrel now). This means, there would be challenges for the solar cell industry too! One can only hope that the economy picks up growth soon enough and sends the price of oil higher so that solar becomes a viable option."

Again, this is a concern I have as well. The rush toward solar is good, but then, is this what the Indian semiconductor industry really needs? Where's all that talk of developing silicon and product companies? You simply cannot equate the two -- semicon and solar! You can't have a policy, and then ignore the main crux either, and simply go for the ones that are easily attainable! It does not project a good impression, or maybe, I am somehow wrong in my assessment. Hence, my feeling that the industry could be losing its way somewhere!

However, Gupta feels that's not really the case! What has been working until now, still continues to work!! "Our strengths are design and verification. We will continue to be in demand for that. The other pastures we explore, there are a lot of uncertainties," he adds.

"The challenge is to pick the right pasture where the grass remains green even in the summer. This is not easy to find and does require that we bet on some of them and learn through the experience," he advises.

How can India really buzz?
What now needs to be done to get the semiconductor industry in India really buzzing? Surely, local consumption is key. Local consumption would hopefully foster electronic product innovation just like products by two-wheeler manufacturers and the Tata Nano.

"The current initiatives in the industry for rural applications are also quite interesting. I am optimistic that some good offerings will come out of this. While these may not be specifically from a “semiconductor” perspective, at least at the “system” level these would make sense," says Gupta.

What India NOW offers to semicon world?
What does India NOW offer to the semicon world, in these times of a global recession?

The Indian economy is still mostly internal consumption oriented, as opposed to exports oriented. This is very different from the economies of island nations like Taiwan, Korea, and Japan, which are very heavily export oriented.

In a recession like the current one, these predominantly export-oriented economies experience a far greater crunch than the others. Thus, as long as products are being sold in Indian markets at the right price points, there would be consumption.

Gupta says, "This time around, the world would come out of recession mainly driven by Asian countries, India being one. People in the industry that I talk to tell me that as the worst is over in this crisis, and as things begin to pick up, India will once again be the beneficiary of a lot of work moving here. However, my personal view is somewhat different.

"I believe that the last round did witness this phenomenon mainly because it was the honeymoon period. But by now, the honeymoon period is over and the India centres of these companies are working hard to reach a level where they become “mission critical” to the businesses of their companies.

"The journey hasn’t been very easy for multiple reasons. And by now, the cost differentials also do not look as attractive as they did before. Hence, what work comes here would come only after a careful assessment and very selectively (not by leap of faith)."

I did blog about how Qimonda could be a good buy for starting a memory fab in India. You have all the facts in front of you! My question to the Indian semiconductor industry is: should we revive the call for having a silicon wafer fab in India, post SemIndia and post recession?

Dramatic price forecast to reshape PV industry: iSuppli

I was very fortunate to attend a webinar on solar PV a couple of days back, thanks to iSuppli, USA. The webinar looked at:

* Polysilicon -- what is going on in the market?
* Cells and modules -- where will the prices go?

Dr. Henning Wicht, senior director and principal analyst, iSuppli, made it clear that the intention was to show what's coming out of primary industry research.

He said: "We believe that solar is a fantastic market. It has been growing over the last four years by revenue. It will continue to grow! There are not many industries with a growth path like that! However, in last the 18 months, the supply has been disconnected from demand."

This is exactly the point iSuppli addressed in its webinar. Dr. Wicht was accompanied by Stefan de Haan, senior analyst, photovoltaics, iSuppli.

iSuppli's recent findings are:
* Severe supply chain imbalances exist at polysilicon/wafer and cell/module levels.
* Short term polysilicon and module prices will decrease significantly.

Polysilicon: What's going on with supply and pricing?
If you looked at the global solar PV industry, many plants are under construction, and there are huge capacity expansion plans. There has been a dramatic decrease in production. In 2008, iSuppli estimated total production of solar PV at 60,000 metric tons. In 2009, about 100,000 metric tons will be produced!

What are the reasons for this supply situation? In 2005-06, the high margins of this industry attracted several newcomers. The cycle time to ramp up a polysilicon plant is 24-36 months, and including another 12 months to get finance, it takes about four years.

He said: "The decisions taken in year 2005-06 are coming to the market now. This is also why we see the big ramp in 2009-10. This is also the reason why the industry will have big difficulties to react on a short term notice. The polysilicon industry is a big super tanker, which has difficulties to maneuver on short term."

Looking at the demand side of things, iSuppli showed a graph where the two curves -- polysilicon supply and polysilicon demand meet, or rather cross, in early 2010. From that point on, the supply line passes the demand line. "That means, from that time onward, we definitely see prices for polysilicon decreasing," he said.

What will happen in 2009?
The key point to note is that the ramping rates of polysilicon and solar cells are completely different! The ramping rate of polysilicon is much steeper, than on the cell side. Polysilicon is more than doubling, while the cell industry is growing at 34 percent.

According to Dr. Wicht, the gap between demand and supply is already shrinking fast in 2009, which will lead to a price decrease in 2009.

Coming to prices, the polysilicon market boasts two kinds of prices -- long term and spot market. According to Dr. Wicht, the long term prices are already decreasing from around $100/kg in 2008, and it is expected to be around $80/kg in 2009.

On the other hand, the spot market price peaked in 2008 at around $400/kg. Now, it has already dropped. It will continue to drop, far beyond today's long term contract price, which will then, from 2010 onward, make up another round of discussion. This is because companies might tend to get out of their long term contracts to secure their silicon on the spot!

Summarizing, he said that polysilicon production will increase heavily. Next, supply will pass demand from 2010 onward, and then the industry will enter the oversupply situation for the next three to four years. The polysilicon industry will also react. In fact, iSuppli anticipates a recent announcement from a solar PV company to expand production capacity would be the last for quite a while!

What about projects on the way? These projects have to come on to the market and many of those will! This is precisely the reason why the industry will see silicon passing solar cells in capacity over the next few years.

Stefan de Haan added that the output of the PV modules industry will grow. The total module prod will likely grow to 11GW this year and to 20GW in 2012. Thin film modules will continuously gain market share and it probably account for 1/3rd of the total market by 2012. Production of crystalline cells will run in parallel. It is likely to reach 9GW for 2009 and 18GW for 2012.

Commenting on the competitive landscape, he added that many new players would be entering production in 2009, especially in the thin film business. "However, the current leaders -- QCells, Suntech and First Solar -- will increase their edge over the competition in terms of absolute production volumes," he said.

In general, it is a good thing that the industry is growing and that all of this capacity is coming online. However, this raises the question: can demand can keep up with the supply?

According to iSuppli, in 2009, the installation market will be flattening. In the sense, iSuppli projects that 4.2GW will be installed this year, or about 10 percent growth. However, this growth is much smaller in comparison to the previous years. Some of the reasons for slower growth in 2009 include changes in sustained feed-in tariffs and the global economic slowdown.

Hann added, "In H2-2010, module demand will probably return to the previous growth rates, of more than 20 percent per year."

Combining demand and supply, there is a massive oversupply of modules that has already been building up since early 2008. Back in 2008, this did not impact on the module prices as there was short term heavy demand from countries like Germany and Spain, from project developers and installation companies, etc. So, this was not noticeable earlier. However, in 2009, the oversupply situation is quite serious!

As a consequence, many suppliers will not be able to react to this situation in the short term. They will still need to run their factories to try and generate some revenue and satisfy the industry. Many had bet on some strong demand coming from USA and also China.

This year, the module prices will decline. Consequently, the declining prices will also create some additional demand. However, for the next two years, this fundamental oversupply situation will not change.

How far will prices drop?
So, what are the message for 2009? First, crystalline module prices will drop to about $2.50 per watt, and second, cost is going to be the differentiating factor! This was a point emphasized strongly by the iSuppli analysts.

Further, how should companies manage this situation, where supply is disconnected by demand? According to Dr. Wicht, there is 11.1GW of module supply vs. 4.2GW of installations. "We do not see that the demand is elastic and that everything will be good after the end of 2009. The gap is too large between demand and supply, and will last till end of 2010."

Installation capacity will surely become a bottleneck. There will be falling prices for silicon, as well as solar cells and modules. Also, the demand is not that elastic enough to absorb all modules produced.

Therefore, given this situation, what are the options for success, rather, what are the ideas to re-orient the solar PV business?

The first option could be to shut down 50 percent of production till price recovers. However, this is not a realistic option. Another could be to put expansion plans on hold. Yet another option for producers would be to become the best in class in production cost, an option, which is excellent, but difficult!

Probably, the best option would be for makers to integrate downstream. This includes new demand simulation in established markets as well as developing new markets.

Dr. Wicht said: "Anticipating bottlenecks are key for solar. The next bottlenecks are the bureaucracy and installation capacity. The production capacity would not be influential. Production cost and downstream integration are key." He advised solar PV producers to monitor their PV market demand and supply situation regularly.

Reviewing global/Indian semicon industry in 2008 -- top posts

Greetings, dear readers and friends, in the new year. May you all have all the success and prosperity in 2009!

An eventful year in semiconductors has passed by us. For me, personally, it has been a tremendous 2008, ending with Electronics Weekly of UK selecting my blog (Pradeep Chakraborty's Blog) as the world's best in the Electronic Hardware category.

Lot of people have asked me since, how it feels to be a world champion! Well, I do feel elated! However, one point, more of the congratulatory notes have come from overseas, than from India. Perhaps, it is an apt indicator of how semiconductors is perceived in India -- though, I may be wrong.

Friends have also asked me how I've managed to blog on such a difficult subject sitting in India. Simply put: It has not been easy!

First, I'm just a simple person, and not some brand name. Second, my blog does not represent any large, well known media house, or a big brand semiconductor magazine. Hence, maintaining a semicon blog, with the help of contacts from all over the world has been tough, at times. Why, some folks, with whom I wished to speak with, never even responded to my emails and requests. Quite understandable!

Third, I've only managed to blog, when I have the time, unlike many other great bloggers who post regularly (or daily)! Fourth, there have been several instances, where my location has been my weak point. I was unable to blog on several instances simply because I had no way of reaching people whom I wished to speak with, while sitting in India. And, as I said, I did get cold snubs on several instances! :) As a result, I could not present my views at specific instances, even though I dearly wanted to!

However, the unconditional and loving support and encouragement of my family, friends, well wishers, industry leaders and loyal readers such as you have helped overcome all of these deficiencies. It is only because of these people that I've managed to come this far! I hope each one of you continues to have faith in me. I shall try my best to provide you with the best information (hopefully) the global semiconductor industry has to offer.

To start off the new year, may I present, what I feel, are the top blog posts on semiconductors during 2008, as a review for the past year.

Being indisposed at the start of 2008, I only managed to pick up speed from April onward. As the year progressed, the Indian fab story with SemIndia started worsening, before finally disappearing, even as fabless India held on sttong, as did the fortunes of the global semiconductor industry, which incidentally, did look quite good till September last year.

I have arranged the blog posts, from January to December 2008, so they will present a better picture of how 2008 behaved! These posts are set in no particular order or preference, otherwise. Some of you may have your own favorites, so kindly let me know, in case those haven't made the list.

JAN 2008
Power awareness critical for chip designers
LabVIEW 8.5 delivers power of multicore processors

MAR 2008
NXP India achieves RF CMOS in single chip
VLSI as a career in India
Using 'semicon' simulation for drug discovery

APR 2008
New camps promise exciting times ahead in memory market
Indian design services to hit $10.96bn by 2010
Staying ahead of clock a habit at Magma!

MAY 2008
Dubai -- an emerging silicon oasis
Developers, go parallel, or perish, says Intel
Think AND not OR; Altera first @ 40nm FPGAs
Top 10 global semicon predictions -- where are we today
Semicon to grow 12pc in 2008
India's growing might in global semicon

JUN 2008
10-point program for Karnataka semicon policy
Has the Indian silicon wafer fab story gone astray?
Semicon half year over, what next now?
EDA as DNA of growth

JUL 2008
Semicon is no longer business as usual!
Cadence C-to-Silicon Compiler eliminates barriers to HLS adoption
Practical to take solar/PV route: Dr. Atre, Applied

AUG 2008
What India brings to the table for semicon world! And, for Japan
NAND update: Market likely to recover in H2-09
E Ink on every smart surface!
RVCE unveils Garuda super fuel-efficient car
Indian fab policy gets 12 proposals; solar dominates

SEP 2008
90pc fab investments for 300mm capacity: SEMI
Synopsys' Dr Chi-Foon Chan on India, low power design and solar
Magma's YieldManager could make solar 'rock'!
Motion sensors driving MEMS growt
BV Naidu quits SemIndia; what now of Indian fab story?

OCT 2008
Top 20 global solar photovoltaic companies
IDF Taiwan: Father of the Atom an Indian!
TI Beagle Board for Indian open source developers and hobbyists
Cadence's Virtuoso vs. Synopsys' Galaxy Custom Designer!
Synopsys' Galaxy Custom Designer tackles analog mixed signal (AMS) challenges
Solar, semi rocking in India; global semi recovery in 2010?
No fabs? So?? Fabless India shines brightly!!

NOV 2008
AMD's roadmap 2009 provides lots of answers... now, to deliver!
Embedded computing -- 15mn devices not so far away!
FPGAs have adopted Moore's Law more closely!

DEC 2008
My blog is the world's best!
Semicon outlook 2009: Global market could be down 7pc or more
Altera on FPGAs outlook for 2009
Solar sunburn likely in 2009? India, are you listening
Outlook for solar photovoltaics in 2009!

I found it difficult to select the Top 10 posts. If any one of you can draw up such a list, it'd be great!

Outlook for solar photovoltaics in 2009!

Friends and dear readers, this is my last blog post for 2008! Indeed, what a year this has been!!

Let me bid this year goodbye with a general outlook on the global solar photovoltaics industry for 2009.

iSuppli had recently put out a report on solar eclipse coming in 2009! I had blogged about the possible solar sunburn ahead, as well, earlier last week!

Another point that has interested me is: what happens to the top 20 global solar photovoltaic companies, based on iSuppli's analysis! This blog post has perhaps been the most popular in recent times.

I was very lucky to re-associate with Dr. Henning Wicht, Senior Director, Principal Analyst, iSuppli Deutschland GmbH, in Munich, Germany, for this discussion, thanks to the efforts of Jon Cassell and Debra Jaramilla!

How bad is solar?
The first and the most obvious question: how bad is the global solar market right now and why?

According to iSuppli, bringing an end to eight consecutive years of growth, global revenue for photovoltaic (PV), panels is likely to plunge by nearly 20 percent in 2009, as a massive oversupply causes prices to drop!

Worldwide revenue from shipments of panels will decline to $12.9 billion in 2009, down 19.1 percent from $15.9 billion in 2008. A drop of this magnitude has not occurred in the last 10 years and likely has not happened in the entire history of the solar industry.

Dr. Henning Wicht says that the upstream part of the solar business (cell, module, etc.) will suffer from price decline due to strong oversupply. The downstream side will benefit (installation, end-user, investor, etc.) by lower system prices.

Therefore, what can the solar players do to get over this coming bad phase in 2009? Well, three things: improve the cost structure, improve the sales side, and diversify downstream… These points hold strong for all fully integrated and non-integrated solar panel suppliers as well. By the way, fully integrated solar panel suppliers are likely to suffer less severe losses than non-integrated competitors.

There must be some way around to to bring about some balance within the current imbalance in the demand and supply situation. While Dr. Wicht agrees this is a difficult one to answer this early, he adds that supply and demand are diverging heavily. "With the current trajectories even in 2012, 100 percent more modules are produced than installed," he says. I promise to discuss this question again with the good Dr. in another six months time.

Word of wisdom
There are various support programs in place, and it is important to know whether they will continue to remain beneficial, both to support markets to become independent sustainable and to develop the regional industry.

Dr. Wicht believes the support programs are still required and beneficial. "If China, India, Mexico and other sunny regions would start to support solar installations, that could change the picture drastically," he notes.

A note of warning for new entrants in the solar photovoltaic space! Be aware that this warning has been earlier highlighted in the global semiconductor outlook for 2009! In tune with what the various analysts have maintained earlier, iSuppli also forsees newcomers in the solar photovoltaic line having problems in getting the required credit for their projects.

What next for Europe, emerging regions?
According to iSuppli, the short-term boost in demand from Spain and Germany has kept the installation companies busy, and solar orders and module prices high. But this boom is over. So, what's next for European players?

According to Dr. Wicht, Germany and Spain should continue their leading role as solar installation regions, even after the boom. France, Italy and Czech Republic are attractive, but still much smaller markets, he maintains.

iSuppli has also mentioned that the race to larger manufacturing scale comes to an end when the production is not sold anymore! In that case, what's the case for the emerging nations, like China and India? Aren't there buyers in such places?

Dr. Wicht says: "Demand in the traditional solar markets is not elastic enough to absorb all of the solar production. Potential new markets, for example, China and India, do not yet have installation capacities and administration to significantly change the global solar demand short term."

iSuppli also feels that the newer Chinese and Taiwanese suppliers will be hit particularly hard during 2009. The reason being, many suppliers have expanded their production capacities heavily without securing equally the sales/downstream part.

Global top 20 rankings to change?
Now to the most interesting part! Most of you have read about the top 20 global solar photovoltaic suppliers. Following the iSuppli warning of a 'solar eclipse' in 2009, there is every likelihood that there will be changes in that table!

Dr. Wicht adds, "However, the top 10 companies are typically better placed than the competition regarding their cost structures, downstream integration and vertical integration."

Obama's solar plans!
Now on to yet other interesting point! The US President-elect, Barack Obama's, New Energy for America plan could well have a significant impact on the US solar industry.

The plan's provisions include:

• A federal renewable portfolio standard (RPS) that requires 10 percent of electricity consumed in the US to come from renewable sources by 2012.
• A $150 billion investment over 10 years in research, technology demonstration and commercial deployment of clean energy technology.
• Extension of production tax credits for five years to encourage renewable energy production.
• A cap-and-trade system of carbon credits to provide an incentive for businesses to reduce greenhouse gas emissions.

Dr. Wicht says: "We all know that Obama is in favor of renewable energy. However, he will not change a 160 percent oversupply of solar panels in 2009."

Bumpy ride to grid parity?
On another note, and a pretty favorite one: Is it going to be a "bumpy road" to grid parity? How will the subsidies be kept going?

Dr. Wicht notes: "Subsidies will continue. It will always be a bumby road because the ramping cycles differ heavily among silicon, cells, modules and the installation capacity. Please remember that the installation business will now benefit from low module prices. It will recover some of the margins it has lost in the last years due to high module prices."

Also, up to when will polysilicon constraints last? iSuppli had earlier indicated PV strategy changes. According to Dr. Wicht, the polysilicon prices are coming down already. "Our indication from October 2008 seems to be fairly good," he says.

Lastly, will iSuppli be still sticking by solar, semicon investments being equal by 2010?

Dr. Wicht says: "Please let me cite again our interview in October: The investments for solar production raising up to several hundreds of Mio USD, up to 1 Bio $ per production site. That is coming close to a semiconductor fab. The total capex of semiconductor is still 10 times larger than PV. However, PV is rising much faster."

That will be all for this year, folks!

Look forward to sharing much more captivating moments in semiconductors, electronics, solar photovoltaics, telecom, etc., in 2009!

Wishing all of you a very happy, prosperous and successful 2009. Be safe and look after yourself! See you next year!! :)

Why solar/PV is good for India? An ISA perspective!

Recently, the India Semiconductor Association (ISA) held an educative briefing session on the potential of the solar PV market in India, which was conducted by Rajiv Jain, Director, Government Relations, ISA.

This meeting was held well before iSuppli issued a warning that there could be global solar sunburn in 2009! I am sincerely hoping that most of the points mentioned by ISA's Jain still hold good in the coming year, and that India really does well and takes off in solar photovoltaics.

The ISA's vision: To help make India an attractive global destination for PV manufacturing and a world leader in solar energy.

Starting with the basics of photovoltaics, he said that it is a package of solar cells used to convert energy from sun to electricity. In simpler words, photons from sunlight knock electrons into higher state of energy, thus creating electricity. The electricity can be used to power equipment or recharge a battery. A typical PV system mainly consists of a PV module, battery, inverter, controller and junction box.

Focusing on the technological landscape, he touched upon the two key technologies for solar: crystalline and thin film.

Crystalline silicon is said to be the most mature Si wafer technology, with the largest market share. Though, high on cost, it has a typical efficieny of 14-18 percent. Crystalline silicon is said to suitable for rooftop applications.

Thin film is nothing but thin layers of photosensitive materials on glass. It is currently on high growth due to silicon shortage, and very low on cost due to low material consumption. The efficiency is about 6.5-8 percent.

A third technology, nanotechnology, is the future technology for cost reduction. It is more in the R&D space as of now.

Present scenario for solar
So what's the present scenario? In 2007, of $71 billion invested in new renewable energy (RE) capacity globally, 30 percent was in solar PV. It is the fastest growing area in the energy sector, with a CAGR of 47 percent over the last five years.

Grid-connected solar PV has been high growth market segment in 2007 (50 percent increase). Also, 86 percent of the PV installations are largely in four countries, with Germany at 47 percent being the outright leader.

Market drivers are said to be attractive feed-in tariffs, national PV market development and acceptance, RE obligations through solar PV, access to cheaper mode of finance, manufacturing incentives as well as strong R&D.

Why solar for India
I have addressed this in an earlier blog post. Here's what Jain had to say, and it is mostly in line with the earlier discussions.

First, India has among the highest solar irradiance globally. It also has the best quality reserves of silica in Orissa and Andhra Pradesh. India has also established itself low cost producer and assembler of solar PV cells and modules.

The major challenges include attaining scale and integration for cost reduction, and, R&D for development of the industry.

Solar insolation in India
To start with, the daily average solar energy incident varies from 4-7kWh per m2. Next, we have multiple sites with solar irradiation >2000 hours per year. In contrast, Germany has 900-1,200 hours per year. Further, most parts of India have 300-300 sunny days in a year translating into a potential of 600GW. Also, potential in some states like Rajasthan is 35-40 MW per m2.

It is well known that the Indian semiconductor policy of 2007 has triggered off the now well publicized efforts in solar initiatives. The government of India has received 16 applications with investments envisaged at app Rs. 1,55,000 crores.

The investments in solar PV manufacturing exceed Rs 1,25,000 crores. Generation based incentives (GBI) are going to be key.

Potential market segments in India
There are quite a few, actually. In rural electrification, the government of India's target is to achieve 'Electricity for all by 2012'. About 18,000 remote villages will likely be electrified through RE. About ~25 percent of the remote villages, i.e., 4,500 villages, form a very viable market.

Next comes telecom back-up power! PV is a cost effective alternative to diesel generators (DG) for back up power for shorter duration, as DG based systems suffer from several disadvantages.

Another key market could be grid connected solar PV based generation. Current tariffs do not provide attractive IRR to developers. Decreasing system prices are however, likely to improve the economics.

Finally, roof based BIPV is said to be an alternative to reduce the cost of power procured by commercial buildings.

ISA's recommendations
The ISA has also made salient recommendations via its report on the industry. These include areas such as manufacturing: with an aim to encourage companies investing in 'Scale and integration', provision of capital subsidy to larger number of units, availability of funds at a cheaper rate, and an emphasis on R&D.

Also, the ISA has recommended that GBI be given for a tenure of 20 years, with the present period being 10 years. Further, it has suggested an accelerated depreciation along with the GBI scheme, and the availability of GBI for an unlimited capacity for a period of five years. The ISA has recommended an enactment of the RE Law requiring utilities to progressively increase power purchase from RE.

On its part, the ISA has been working with the government of India and various state governments as well. It has a sound rapport with concerned ministries - MNRE, DIT and NMCC.

The ISA has also assisted in the technical evaluation of solar PV proposals received in Fab City, Hyderabad. It has also drafted a semiconductor policy for the government of Karnataka, which should be out early next year, hopefully. The ISA is also working with several other state governments to promote the industry in their states.

The second ISA Solar PV Conclave is scheduled for November 2009 at Hyderabad.

Very good intentions, all of these! Now, for the Indian industry and the government to deliver, and walk hand in hand!!

Rapidly growing local market bring new opportunities for EDA in India

Those following the EDA industry are well aware that its been an industry in some trouble right through this year.

If you visited EDA Consortium's web site, this becomes clear. In Q1-08, the global EDA industry revenue for Q1 2008 declined 1.2 percent to $1,350.7 million compared to $1,366.8 million in Q1 2007.

Later, the EDA industry revenue for Q2 2008 declined 3.7 percent to $1357.4 million compared to $1408.8 million in Q2 2007, as reported by the EDA Consortium.

I am still waiting to see how the Q3 results shape up. My guess is, it would be even lower than Q2, unless there are a few surprises!

The EDA market in India, as per the ISA F&S Report 2005, was US$110m. The latest figures are not yet available, though I would believe the Indian EDA industry is likely to do better than the global industry, unless, there have been some slowdown effects here as well.

I had an interesting discussion with Jaswinder Ahuja, Corporate Vice President and Managing Director, Cadence Design Systems (I) Pvt. Ltd and Chairman, India Semiconductor Association (ISA), on the (dipping?) fortunes of the EDA industry lately.

According to Ahuja, 2008 has been a challenging year. The global financial crisis has impacted several industries and the EDA industry was no exception. Due to the overall downturn in the economy, companies are being more cautious and are delaying purchase decisions, a move that is impacting the overall EDA industry.

Coming to the drivers for EDA in India this year, there are a few key ones! First, the design centres have gained expertise and are now doing cutting-edge designs out of India. They have moved up the value chain from doing block-level design to increasingly owning up end-to-end design and design starts.

Second, several Indian design services companies have made significant acquisitions, showing that their businesses have not just taken root, but also flourished. MindTree Consulting’s acquisition of TES PV and Wipro’s acquisition of Oki's wireless chip design arm are cases in point, added Ahuja.

He said: "The Indian EDA industry has been growing and we will see more technology adoptions and proliferations in India Design Centers. Also, the rapidly growing local market is unfolding new opportunities."

EDA outlook 2009
Going forward, market pressures and design complexities are just some of the issues design teams face today. Cadence's customers, for instance, would like to plan in the context of IP selection, run analysis around power, performance and cost perspectives. Design predictability will be a priority, said Ahuja.

The key focus areas for the EDA industry will be new design for manufacturing technologies as designs move to advanced nodes; verification and verification IPs and multicore processing support for EDA flows as a result of increased integration.

Also, SaaS is likely to gain traction as companies are compelled to consider flexible engagement models to access state-of-the art design environments that help design teams reduce risk and cost, yet increase time-to-productivity.

Are there any opportunities for EDA folks in solar? Ahuja disclosed that in a recent poll by ISA, to the question 'Solar PV has potential in India', almost 90 percent of respondents replied Agree or Strongly Agree.

With the worldwide focus on alternative energy systems, India has witnessed several companies announcing investments in PV segment. This is good news for the Indian semiconductor ecosystem.

Cadence has a broad portfolio of technologies that addresses the needs of different players in the ecosystem.

Low power initiatives
Low power has always been a key focus area in semiconductors. According to Ahuja, power efficient design is gaining importance across the design chain and EDA companies will have to look closely at 'green' technologies.

Energy efficiency at the system and application level for wired and wireless products will be one of the focus areas. Emerging technologies that allow applications and systems developers to evaluate how their programs use power both individually and in a dynamic, multi-application model of the end system will help expand the role of EDA into system-level design.

The Power Forward Initiative (PFI), an industry alliance comprising of companies across the semiconductor design chain will work towards a more systematic, integrated approach to low-power design.

Outlook 2009
With the new year about to start in less than a week's time, the impact of the financial crisis will see an increased demand for mid-range product technology as consumers shift spend toward 'essential', rather than 'desirable' electronic products.

As per Ahuja, globally, semiconductor companies are focusing on their core strengths, consolidating and realigning resources. Across sectors, they will look for systems that marry functionality with cost efficiencies.

"Growth for semiconductor companies will come from energy related and low-power technologies that are able to drive market share shifts," he noted.

How Taiwan government reacts to DRAM turmoil is a lesson in itself!

Taiwan based DRAMeXchange recently sent me a release, which discussed in length the steps the Taiwan government is taking in an attempt to "save one of the '2 trillion twin stars', the DRAM industry". The Taiwanese Ministry of Economic Affairs (MoEA) was designated to draft the policies, principals, strategic goals and strategic directions of the DRAM industry rescue plan.

According to DRAMeXchange: At 6 PM, December 16, the Taiwanese Ministry of Economic Affairs held a press conference about the DRAM rescue plan, emphasized in the past 10 years the investment amount of the DRAM industry surpassed NT$ 850 billion, and created a complete industry supply chain, which widely covers upstream chip makers, to downstream packaging and testing companies, and module houses. If the recession brought down the industry, the Taiwan industrial chain will be affected severely.

The Taiwanese government showed sincerity and willingness, and hoped that Taiwanese DRAM vendors can actively start to consolidate horizontally and vertically, and make joint proposing plans to the government. The government will not take the leading position, but the strategic direction is long term integration, which is not just merger but also includes cooperation of co-research, co-develop, and co-manufacturing.

The government also emphasized that it will tend to strengthen the relationship among the co-operation of Taiwanese, American, and Japanese DRAM vendors.

In another report, Gartner has gone as far as dubbing the DRAM industry as the wild card for the semiconductor industry in 2009! The DRAM industry has been in a downturn for the past 18 months and losses are now approaching $12 billion, it says.

How the Taiwanese DRAM industry reacts to the efforts of the Taiwan government will be visible in the coming months. Among other bail out plans, the Taiwan government has also focused on the need for the local industry to develop its own technology.

Taiwan takes great pride in having been a leader in technology and R&D for long. If the DRAM industry does not recover quickly enough, it would indeed impact the country's industrial chain as well.

What's interesting to note is the key role the government of Taiwan is playing in all of this. It again stresses the importance of government contribution within the semiconductor industry. And, there is also a lesson in all of this for India!

Closer home, in India, I am (and I am sure, interested readers and parties are too) still waiting to hear on what happened to the several proposals that were received for solar/PV, as well as on the various state policies, especially, Karnataka.

All believe that these would surely get pushed through in the new year. However, there is a need to show some speed in this regard as well. You cannot afford to wait for too long in the semiconductor industry. The SemIndia fab story is all to well known and hopefully, still fresh in everyone's minds.

NXP India's Rajeev Mehtani on top trends in global/Indian electronics and semicon!

When a new year approaches, we start analyzing the year gone by and try to gauge what could happen in the coming year. This really holds true, as far as the technology industry is concerned.

It's been a week since I've been mulling over these myself, especially, pondering over developments in the global semiconductor and electronics industries, as well as what could happen in India during 2009. Well, lots will happen, and I can't wait for the new year to start!

I caught up with Rajeev Mehtani, vice president and managing director, NXP Semiconductors, India, and discussed in depth about the trends for 2009. Here's a look at that discussion.

INDIA -- ELECTRONICS & SEMICONDUCTORS

1. The DTH story will continue to increase in India with companies such as Tata Sky, DISH TV, BIG TV, etc., gaining market share. Owing to these challenges, there would be significant consolidation among the cable operators. Digitalization will also be seen in 2009.

2. The slowdown will affect growth across all sectors. Our view is that LCD TVs as well as STBs will continue to grow.

3. The year 2009 will witness e-commerce revolution and the RFID sector will grow at a 40-50 percent clip. The government has been sponsoring a lot of projects, which include RFID in the metros, e-passport cards and national ID cards. By mid-2009, we can expect a mass deployment of these projects as well as micro payments.

4. Manufacturing in India will continue to grow; EMS or OEMs, such as Samsung, Nokia, Flextronics, etc.

5. There could be a move from services to products in electronics and semiconductor spaces. The number of funded startups has grown significantly over the last years and more and more ideas are coming on the table.

6. The solar/PV sector will grow in India. High entry cost of capital for panels will be a barrier for this sector. Government enhancement is necessary. India will be different than other countries as people won't push energy back into the grid; it will be used more for household consumption. The India grid is unstable. Tracking it requires a lot of expensive electronic switching. Solar deployment could be at the micro level, and also community level, where it makes more sense.

7. The startups in India are mostly Web 2.0 based, although there aren't many hardware startups.

GLOBAL -- ELECTRONICS & SEMICONDUCTORS

1. The semiconductor industry is truly global, That is mostly because it is a very expensive industry.

2. Things are a bit murky in the semiconductor industry. It would probably be dipping 10-15 percent next year.

3. Globally, energy management and home automation will start to take off in 2009. Satellite broadcasters will also continue to gain more strength.

4. On a worldwide scale, 3G will win. You will have 3G phones, and you'd add LTE to those. India is slightly different. Only 20 percent of Indian households are ready for broadband access. In India, WiMAX could be a way to have wireless broadband at home.

5. Industries moving to 300mm fabs will be making up only 20-25pc of the market. Not many need 45nm or 40nm chips. People will question any major capex, until there's a big return and wait for recession to end. The bright spot is solar!

6. The fabless strategy would be the only way to go forward. While MNCs with fabless strategy are present in India, Indian startups in this space are quite few.

Solar/PV is just right for India

There have been significant investments in the solar/photovoltaic space in India in the recent past, and that does not look like ending any time soon.

Given the ongoing global financial crisis, and the state of the global semiconductor industry, it appears that India has bet quite successfully on the solar/PV segment. In fact, it seems that solar/PV is just right for India! In fact, it may just kick off the kind manufacturing activity India really needs.

Poornima Shenoy, president, India Semiconductor Association (ISA), says that solar/PV is right for India for a variety of reasons.

Firstly, India has among the highest solar irradiance, globally. Secondly, it is established as a low-cost producer and assembler of solar PV cells and modules. And thirdly, India has among the best quality reserves of silica in the states of Orissa and Andhra Pradesh.

She adds: "At present, solar PV may not seem to be an attractive option, primarily due to high generation costs. However, in the coming years, with increases in fossil fuel prices, rising environmental concerns, and a reduction in the cost of solar PV technology, it is likely to become a major source of energy."

The ISA expects 2015 to be an important year for the solar/PV industry. Around this time, the product cost of the Indian solar PV industry is likely to match the semi grid parity (peak power) globally, and also to match the grid parity within India.

The four major segments offering maximum potential in the coming years for solar PV in India are: rural electrification -- decentralized distributed generation (DDG); grid interactive solar PV power plants; backup power for telecom (base transceiver stations); and roof-based solar PV systems.

ISA-NMCC report on solar/PV
The ISA recently released a report on the solar PV market in New Delhi with NMCC (National Manufacturing Competitiveness Council).

According to the ISA-NMCC study, of the US$71 billion invested in new, renewable energy capacity globally in 2007, 30 percent of was in solar PV. Solar PV is the fastest growing area in the energy sector, with a CAGR of 47 percent over the last five years. The grid-connected solar PV segment saw 50 percent growth in 2007.

As per the report, the solar PV industry is likely to grow four-fold by 2011. However, there are various uncertainties in the short- to medium-term on both the supply and the demand side.

On the supply side, the main constraint is the lack of available polysilicon. The demand side is limited by the quantum of incentives for solar PV.

Gradually, there will likely be improvements in technology. The decreasing cost of manufacturing could drive the preferential tariffs lower, and ongoing demand for PV products could also attract significant investment.

As for the global solar PV supply chain. Thin-film production is one of the fastest growing segments in solar. The lack of available polysilicon is limiting growth, and this has led to the emergence of thin-film technology. This technology has enjoyed substantial growth since 2005: 80 percent in 2006 and over 100 percent in 2007.

Top 20 global solar photovoltaic companies

Alright folks! This has taken some time coming, but it is worth the wait! Presenting the Top 20 solar photovoltaic companies during Q1-2008. May I add here that I am extremely grateful to iSuppli's Jon Cassell for giving me this opportunity.

I was also fortunate enough to discuss this table with Dr. Henning Wicht, Senior Director, Principal Analyst, iSuppli Deutschland GmbH, in Munich, Germany.

Parameters for rankings
First up, what were the parameters used by iSuppli to determine the top 20? According to Dr. Wicht, the top 20 cell-companies have been ranked by production in 2007 and by announced production capacity 2010. He clarified, "Ranking by revenue is not applicable because many integrated manufactures publish compound revenues for cells, modules and systems."

Yes, there have been several announcements in the solar/PV space, in India, and globally, and some names could be missing here. However, the new cell manufacturing projects will be included as soon as they are announced.

Coming back to the topic, it is necessary to examine the role of subsidies. While photovoltaics have been getting cheaper, Dr. Wicht said that subsidies were still necessary to support the PV markets. "It shows that the time grid parity shortens faster than expected earlier. As an example, for Germany, the grid parity might be achieved in 2015, which is two years earlier than expected in 2007."

That is to say, the support programs are benefical, both to support markets to become independent sustainable and to develop the regional industry.

Global interest in solar/PV
Critically, there seems to have developed a sudden interest in solar/PV, starting late 2007, when this (solar) has been around for some time. How has this happened?

According to Dr. Wicht, raising CO2 levels generated through fossil energy, CO2 certificates, rising prices of fossil fuels, political dependency from oil exporting countries drove the Kyoto protocol to reduce CO2.

"Renewable energy is a major pillar to achieve that goal. European governments have been frontrunners to implement and execute that goal. That said, solar has been around for a while. Japan was the first significant market. However, on a global basis, it took off in Europe from 2005 onward," he noted.

With the spate of initiatives in solar/PV, can it not turn out to be a case of too many folks entering the same line?

Sure, over and undersupply happens along the supply chain! The iSuppli market research figures out imbalances, which drive prices/margins up and down.

Also, isn't there a chance of solar/PV getting commoditized, or has it already become one? Well, PV modules are a commodity product, said the analyst. The market is still in its infancy and it will continue to grow for the next 10 years and further. The overall saturation will come, but still some years to go.

Is solar helping semicon?
Some industry folks have been saying that the solar/PV initiatives are not really helping the overall semicon industry, a statement I agree with as well. Also, it may only be benefitting some of the equipment makers.

Dr. Wicht said: "Indeed, semicon fabs are not able to produce competitively solar cells and the solar need for semiconductor devices is rather low. The semiconductor companies, however diversify into PV, e.g., Qimonda with a new cell production. Intel is investing in several PV companies, LG is investing in Conergy, etc., or supplying devices for power conversion, e.g, National Semiconductor. However, the overall impact on the semicon devices market is rather low!

Solar, semicon on par?
iSuppli made a forecast some time back regarding investments in solar and semiconductors being on par by 2010.

The investments for solar cell production raising up to several hundreds of Mio USD, up to 1 Bio $ per production site. That is coming close to a semiconductor fab. The total capex of semiconductor is still 10 times larger than PV. However, PV is rising much faster.

BV Naidu quits SemIndia; what now of Indian fab story?

There's this report on DNA Money about BV Naidu, managing director of SemIndia Systems Pvt Ltd and SemIndia Fab Pvt Ltd having quit his job! This immediately begs the question: What now of the Indian fab story? Or, has it sunk without a trace?

There have been several questions raised in the past, as well as in the recent past, such as:

1. Is India's fab story going astray?
2. Why have fabs in India in the first place?
3. Can an Indian based fab take on the might of established global fabs? How will it be profitable in this climate?
4. What can an Indian fab produce unique, that other fabs cannot?
5. What has the Indian semicon policy achieved, when the Indian semicon industry was doing well, prior to the announcement of the policy?
6. What does India bring to the semicon world?
7. Why move to solar, when there's been no action of note for wafer IC fabs?
8. Why convert the Fabcity in Hyderabad, to Solarcity?
9. Solar/PV isn't exactly semiconductors, so why this hype about solar fabs? Is this being done to hide the lack of any success in semiconductor fabs?

Right! I am not here to provide the answers to such questions, nor am I qualified enough to address these! These are questions, if they are justifiable questions, to be answered by the industry! Rather, I will try and analyze what India has done and can do in semiconductors!

May I add here that according to the India Semiconductor Association, BV Naidu remains an active member of the Executive Council. BV Naidu himself informed me that he will be continuing at the board level at SemIndia, moving away from executive responsibilities. And, he will be continuing at the ISA. So that's good news!

Now back to the discussion!

First, yes, before and post the Indian semiconductor policy, India continues to do very well in semiconductors. Nearly every single MNC has its presence here; and no one that I know, has said that it has no plans to expand in India! Two, we have been traditionally very strong in design services and continue to remain so! Three, India is the emerging (or already emerged) embedded superstar!

Having a wafer IC fab isn't such a big deal, is it? So many folks have already moved on to fab-lite anyway! Yes, having one wafer IC fab would surely prop up India's image in the global semicon market, but well, not having one, won't sully India's image either!

If we do not get a fab, then let's just all accept that India was not ready for one, and let's move on! Life in semiconductors is much more than wafer fabs, as India's brilliant design services companies keep proving day in and day out!

I've said before in one of my blogs that doing product development is probably not India's strength! Design services surely is! Let's focus on our strength!

Will the moving out of BV Naidu from SemIndia effect the Indian industry? Why should it? Actually, far from it! Some companies in IP and other embedded areas are doing very well anyway. Let's give such companies their due credit! They've been present, much before the India Semiconductor Association was formed, or way long before the Indian semicon policy was born!

I interact regularly with the length and breadth of the Indian semiconductor industry. I've been covering this industry much before the India Semiconductor Association was even formed! If I remember correctly, I was among the three journalists present on the day the ISA was actually launched! Coming back to my point, I've yet to come across one person from the industry who does not understand the dynamics of this industry!

If a fab does not happen or someone leaves a company, that does not mean that there's been a failure. Maybe, it was a wrong choice to start off with! Perhaps, it just coincided with the turbulent global semiconductor industry. Or, simply, semiconductor was mistaken to be a commodity, which it is not!

India has had several investments in solar. Two days from now, there'll be a major solar/PV conference in New Delhi. Solar is within the ecosystem units of the Indian semicon policy, and it has attracted major investments. Yes, solar has to do with energy security, and in that regard, India could well be on the right path. However, that's just one small part of the complete story of the semicon policy!

As to whether India should focus on semicon OR solar, I am not the right person to comment or judge! Nor am I qualified enough to comment on 'why convert Fabcity to Solarcity'. Maybe, solar is being hyped in India right now. If yes, like any other industry, once it matures, the solar bubble will burst and consolidation will happen.

There are several other ecosystem unit definitions in the semicon policy. Some may and will happen. For those who are not aware, the "ecosystem units" have been clearly defined as units, other than a fab unit, for manufacture of semiconductors, displays including LCDs, OLEDs, PDPs, any other emerging displays; storage devices; solar cells; photovoltaics; other advanced micro and nanotechnology products; and assembly and test of all products.

The Indian semiconductor industry, as I see it, remains strong as before, fabs or no fabs! I don't equate solar with semiconductors, and maybe I am wrong here, but I do believe the two should be treated separately. Not a single solar company will probably feature in India's top 10 semiconductor companies! At least, not in my list! And, if a top executive leaves a company, why should it hamper the overall industry?

Frankly, it is the Ittiams, the MindTrees, the Cosmic Circuits', the eInfochips, and the SoftJins who continue to remain India's pride, even though they may be quite small in comparison to the global giants! At least, they have done India proud in their own way! Doesn't matter if these companies do not make great media copy! These are among the Indian semiconductor companies that continue to matter!

The India semiconductor story is something like this: Lots of high-end designs are being done here. In fact, lot of key decisions are now being made out of India. The talent pool is very much intact and growing! We are leaders in design services and embedded, make no mistake.

Now, does all of this indicate a recession or depression in the Indian semiconductor industry? Or, is it an indication of India's growing success -- fabs or no fabs? You decide!

Mentor on EDA trends and solar/PV

This is a continuation of my recent discussion with Joseph Sawicki, vice president & GM, Design to Silicon Division, Mentor Graphics.

There have been whispers that the EDA industry has been presently lagging behind semiconductors and is in the catch-up mode. "That’s a matter of perspective. There are definitely unsolved challenges at 32nm and 22nm, but the reality is that we are still in the technology development stage," he says.

For EDA tools that address implementation and manufacturing issues (i.e., Mentor design-to-silicon products), there are dependencies that cannot be fully resolved until the process technology has stabilized. Mentor Graphics is laying the groundwork for those challenges and working in concert with the process technology leaders to ensure that our products address all issues and are production-worthy before the process technology goes mainstream.

On the other hand, although Mentor’s products are fully-qualified for 45nm, there have only been a handful of tapeouts at that node, so for the majority of customers, we are ahead of the curve.

On ESL and DFM as growth drivers
ESL and DFM are said to be the new growth drivers. Sawicki adds: "As Wally Rhines has said in his public presentations, system level design and IC implementation are the stages of development where there are the most challenges, and therefore the most opportunities. To continue the traditional grow spiral that the electronic industry has enjoyed as a result of device scaling, we need more sophisticated EDA solutions to deal with both of these challenges."

ESL is responding to the growth of design complexity and the need for earlier and more thorough design verification, including low power characteristics, and software integration.

The Design-to-Silicon division is addressing the issues of IC implementation which result not only from the increase in design complexity and devices sizes, but also from increasing sensitivity of the manufacturing process to physical design decisions, a phenomenon often referred to as “manufacturing variability.”

Although the term “Design-For-Manufacturing” reflects the need to consider manufacturability in design and to optimize for both functional and parametric yield, it is important to emphasize that DFM is not simply an additional tool or discrete step in the design process, but rather an integration of manufacturing process information throughout the IC implementation flow.

With single threading, we can no longer handle designs over 100 million gates. Of course, at 45nm, you can do a 100mn gates. That rewriting process is another issue that is also slowing out. It would be interesting to see how is Mentor handling this.

According to Sawicki, Mentor has incorporated sophisticated multi-threading and multi-processing technologies into all of its performance-sensitive applications, from place-and-route, through physical verification, resolution enhancement and testing.

He says, "Our tools have a track record of impressive and consistent and performance and scalability improvements, which is why we continue to lead the industry in performance."

In addition to merely adding multi-threading and support for multi-core processors, Calibre products have a robust workflow management environment that automatically distributes the processing workload in the most efficient manner across any number of available clustered computing nodes.

Mentor's Olympus-SoC place-and-route is inherently scalable due to its advanced architecture which includes an extremely efficient graph representation for timing information, and a very concise memory footprint. In addition, all the engines within Olympus-SoC can take advantage of multi-threaded and multi-core processors for high performance. These features enable Olympus-SoC to handle 100M+ gates designs in flat mode without excessive turnaround time.

Mentor’s ATPG tools are also designed to operate in multiprocessing mode over the multiple computing platforms to reduce test pattern generation time. In addition, Mentor test pattern compression technology reduces test pattern volume and test time, making it feasible to fully test 100M gate devices and maintain product quality without an explosion in test cost.

With EDA is starting to move up to the system level, will this make EDA less dependent on the semiconductor world?

Sawicki agrees that there are challenges at both the front end and back end of the electronic products design and manufacturing life cycle. Both of these opportunities are growing. In addition, developments like multi-level (3D) die packaging, through-silicon via (TSV) structures and other non-traditional techniques for device scaling are pushing system and silicon design issues closer together.

Reaching the 22nm node will require highly compute intensive EDA techniques for physical design to compensate for limitations in the manufacturing process. Beyond that, we could see a major shift to new materials and manufacturing techniques that would open new green fields for EDA in the IC implementation flow.

EDA going forward
How does Mentor see the EDA industry evolving, going forward?

Sawicki adds: "There are three key trends to watch. Firstly, for design to remain affordable at the leading edge, we need to enable radical increases in productivity. Electronic System Level (ESL) design is the key here, allowing designers to move to a new level of abstraction for both design and verification.

"Secondly, the challenges of manufacturing a well-yielding and reliable device as we move to 22nm will require a far more sophisticated physical implementation environment—one that accounts for physical effects in the design loop, and accounts for manufacturing variability in it's optimization routines.

"Finally, the manufacturing challenges also open significant opportunity for EDA in the manufacturing space. A great example of this is the September 17, 2008 announcement we did with IBM on a joint development program to enable manufacturing at the 22nm node."

Finally, given the roles already defined by Magma and Synopsys in solar, is there an opportunity for EDA in solar/PV?

According to Sawicki, as the photovoltaic devices have very simple and regular structures, most of the opportunity for EDA is not in logic design tools, but in material science, transistor-level device modeling, and manufacturing efficiencies with a focus on conversion efficiency and manufacturing cost reduction.

EDA's role in solar will be in the newer areas related to Design-for-Manufacturing and other manufacturing optimizations, he concludes.

Our last discussion on DFM will follow in a later blog post!

Building a good solar ecosystem in India

Solar/PV has been doing the rounds consistently, and has probably now become one of the most hyped sectors.

In fact, renewable energy has never ever had such a good time! As mentioned, a tremendous hype has already been built around solar photovoltaics. Several companies, in India, and elsewhere, have also jumped into the solar bandwagon.

So what are the reasons behind this 'sudden' interest in solar? According to Dr. Ashok Das, managing director, Solar Solutions, and a well know expert in this area, consumers do not yet drive the solar energy sector. Being energy, it is mostly driven by the government and its subsidies.

So, why has there been this 'sudden interest' in solar? There are two reasons.

First, the climate change issue started getting center stage at world forums, leading to policies and targets to cut global warming, and hence boosting renewable energy. Second, the soaring oil prices and continued dependence on a few countries for oil has led to the realization of the energy security.

There are several takeaways from the European experience with solar. Dr. Das says that Europe, particularly, has taken solar very seriously. They have been a leader in solar. "Germany, for instance, gave away all of the necessary subsidies to attain energy security. These subsidies have led to the solar boom. It has also led to an increased R&D to bring down the cost of solar energy."

Nevertheless, he adds there seems to be a bubble forming in this sector, like all other booms in the past. The industry will go through consolidation as the market matures.

And where does India stand in comparison? According to Dr. Das, steps are being taken to promote solar energy in India. "As of now, the feed-in tariff is Rs. 15 for photovoltaics and Rs. 12 for thermal solar. The government also announced a mandatory 5 percent renewable energy mix in the electricity production.

"The PMO (Prime Minister's Office) has also issued a National Action Plan that has plans for boosting solar. These subsidies are driving some of the increased activities in India."

He contends: "We need stronger lobbying so that better subsidies can come through. Therefore, most of the manufacturing activities in India are still driven by the export markets."

Surely, given the surge of investments in solar within India, there is every room for developing a very good ecosystem.

Dr. Das says: "Coming to the solar ecosystem, we already make solar products, as well as the modules. We also have the capability to make cells. The only part missing has been wafer, the silicon for solar.

"A few silicon factories should be coming up in India soon. So, India can easily establish the entire ecosystem for solar photovoltaics."

Postscript: More investments in solar today, in India. According to Hindu Business Line, there have been three additional investments worth Rs. 55,000 crores.

Vavasi Telegence to invest Rs 39,000 crore for solar PV and polysilicon unit; EPV Solar to invest Rs 4,000 crore for solar PV unit; and Lanco Solar to invest Rs 12,938-crore for solar PV and polysilicon unit.

A word of caution: It's advisable not to get carried away by all the success in solar. Solar is/was only part of the ecosystem units in the Indian semicon policy.

Don't forget semiconductors!

While this success in solar does augur well for the solar industry in India, don't think this is even close to what the Indian semicon policy, launched with fanfare last September, originally set out to achieve!

Synopsys' Dr Chi-Foon Chan on India, low power design and solar

There have been reports about the troubles within the EDA industry in recent times, especially those related with quarter sales. Interestingly, Synopsys has been the one sailing along fine! If that's not enough, it made its intention known of playing a role on the solar/PV segment, an area where lot of investments have been happening!

Given this scenario, I was fortuitous enough, rather, extremely lucky to be able to get into a conversation with Dr. Chi-Foon Chan, President and Chief Operating Officer, Synopsys Inc., during his recent visit to India.

On the state of the global semiconductor industry, he said, it was somewhere now in the low 10s [well below 10 percent]. The EDA industry is currently tracking below that level. However, Synopsys has been growing at around 10 percent. He said, "The technology challenges today are very high."

Synopsys has a substantial number of R&D population based out of India. Giving his assessment of the Indian semiconductor industry, Dr. Chan added: "Our main interest in India is largely talent and the academia. India can very well get more into the product development side. Even the outsourcing of designs have increased. Our capabilities, of the Indian team, have also increased."

As with any good semiconductor ecosystem, the Indian industry also needs a proactive industry association, a role played to near perfection by the ISA (India Semiconductor Association). Acknowledging the ISA's role, Dr. Chan said, "The ISA has also formed a very cohesive team."

There is little doubt about India's growing importance in technology strengths and managerial leadership. Dr. Chan added: "We are more on the high-end side and also track what others design. In India, the profiles of designs are definitely high-end in nature. This is largely due to the presence of a large number of MNCs. A very high percentage of designs are in the 45nm and 65nm process technology nodes."

There is another significant indicator of India's growing importance, and that is the huge rise in the attendance of the SNUG. In 2000, this event attracted 180 people. However, in 2008, the SNUG attracted over 2,000 people.

Moving India to next level
Given the very high level of commitment on Synopsys' part toward India, there was a need to find out from Dr. Chan what exactly India needs to do to move to the next level in the value chain in the semiconductor ecosystem.

He advised: "India can do two to three things. One, for the system to grow, you need the government, academia and industry to grow together. India has all of the ingredients required to drive products."

Comparing India with China, he highlighted the fact that while in China, the local consumption was higher than local supply, that was not the case with India!

"Therefore, looking at merely the local market is not the only thing. Products developed here can also be targeted at the Middle East and Southeast Asia." He was quite forthright in his analysis, adding: "Industries start when you find markets. The skill sets are already present here. There can well be multiple startups."

Dr. Chan also touched upon the fab vs. fabless issue, noting that there could well be more of fabless companies in India. "Building a fab requires lot of capital. Also, consolidation will continue to happen."

What role does Dr. Chan see Synopsys playing in the Indian context? He said: "Synopsys will continue to be a catalyst for the industry. A healthy design industry in India continues to help us. We also work well with the Indian universities. Having more people from the universities will always help. We also invest a lot in application support. The application team also trains others. I now look forward to seeing more fabless companies here and India to become even more global."

On low power design
India is also a centre of expertise in low power design, given that low power is hugely important in today's electronics ecosystem. Dr. Chan commented that low power has always been the number one design issue. It cannot be taken care of at one single stage.

He added: "A slightly new concept that has emerged is low-power verification. There are so many schemes for attacking low power, such as multiple voltage islands. We (Synopsys) are spending a lot of effort in low power.

"As a designer, you require detailed analysis. Low-power verification is now coming up. Another area is testing. As an example, if so much power is required, how do you have the power cut from the tool you are using to test? From a Synopsys point of view, we are involved in several points, such as front-end synthesis, testing, sign-off, verification, etc. We are trying to put in a whole lot of methodologies."

Synopsys in solar
EDA may be able to help by lowering power requirements and leakage on better products. Especially, the Synopsys' TCAD product can be used to create more efficient and effective solar cells. Now, this is not a new development anymore. Synopsys, along with Magma, have already made known their intentions about setting foot in the solar/PV space.

On the TCAD, Dr. Chan said: "We have a very strong position in the TCAD, commercially. Now, it is one of our most critical elements in high-performance. Our TCAD is among the strongest in the EDA industry.

"In solar, it does not have to be a complicated place-and-route, etc. From an entire solar industry point of view, we have now used some effort from TCAD into this space. Heat transfer issues, etc., are more in the EDA space."

I will continue my conversation with Synopsys on its solar initiative sometime later. Keep watching this space, folks