Spotlight

Microchips and more

The tale of STMicroelectronics’ Indian operations is one of innovation, says Kusum Makhija

Set up in 1987 as a liaison office with just four employees, STMicroelectronics (STM) India has evolved into a company with more than 1,600 employees contributing to the company’s worldwide success. STM was one of the first microelectronics companies to recognise India’s potential, and even in 1990 it had begun its design activities here. The initial success of Indian circuit designers and software engineers, coupled with the nation’s cost competitiveness, led to the growth of what is, today, one of STM’s largest design centres outside Europe.

The India story

“There were hiccups when we decided to set up a design centre here, as the county was not integrated into the global economy and there were a lot of bottlenecks related to government regulations, clearances, customs and logistics. Over a period of time, the situation improved as liberalisation gathered pace,” says Pradeep Kumar, President, India, and Vice-president, Emerging Markets, STMicroelectronics.

STM has 16 manufacturing locations in Europe, US, China, Malaysia, the Far East and Singapore. That said, the company has no plans to manufacture in India. According to Kumar, the government lacks a clear focus for a specialised vertical such as chip manufacturing. There are other issues such as infrastructure needs and market demands which play an important role.

“If companies such as Intel decide to set up a manufacturing base in India that will benefit other companies. But I do not see a problem in this as Intel has been a competitor and will remain so,” adds Kumar.

The company is now building a 100,000 sq mts campus at Knowledge Park 3 in Greater Noida, UP. The first phase of the campus will be capable of housing 1,500 engineers. Further, STM has also established a design team of around 50 engineers in Bangalore, with a plan to quadruple its size.

Technology leadership

STM India specialises in developing high-value Intellectual Property (IP), System-on-Chip embedded software for end-user applications, and IT infrastructure. It filed 165 patent applications between 1993 and 2004, with the number of patents filed increasing continuously with each passing year.

India has become one of STM’s major centres worldwide developing cutting-edge technology for applications such as set-top boxes, DVD players, wireless-telecom, multimedia, imaging and automotive design. Indian teams play a key role in STM’s worldwide R&D activities. In R&D, the important achievements of the Indian site include a substantial contribution to the development of the industry’s first design platform on the latest 90-nanometer (nm) deep sub-micron CMOS technology. It allows STM’s own designers and those of its key customers worldwide to rapidly exploit the potential of the state-of-the-art CMOS technology. This work is now being extended to the 65 nm platform to be followed by a 45 nm platform.

In product design, STM India’s engineering achievements include the development and industrialisation of a wide range of products for automotive, consumer, computer, wireless-telecom, and industrial applications. STM India was also a major contributor to the development of the Nomadik chip family, which enables portable terminals to play music, take pictures, record video, and host two-way visual communication in real time. The company invests 17.2 percent of its annual sales globally in R&D and employee training.

Quality processes

We have a balanced approach in terms of our product portfolios, and have never been overly dependent on any particular segment Pradeep Kumar President, India, & Vice-president, Emerging Markets STMicroelectronics

Apart from the significant contribution that it makes to STM’s worldwide business and IP portfolio, STM India is a major IT and software development hub providing and supporting the company’s worldwide IT applications such as internal business and HR systems. This arm of STM is also certified for the Capability Maturity Model (CMM) 5 for assessing and improving software processes.

The Indian sites support the growing base of Indian manufacturers which use STM’s products. STM is now among the top three suppliers of semiconductors in India, and has maintained a CAGR of 23 percent over the past five years. “The Indian market is bound to grow, but it all depends on how focussed we are on manufacturing. We need to encourage manufacturing as it will result in the generation of a large number of jobs,” says Kumar. Smart card and wireless technologies are picking up as smart card applications are adopted by verticals such as healthcare and BPO.

The global turnover of the semiconductor vendor is $8.4 billion. It has 39 design facilities and 16 advanced R&D centres. States Kumar, “In the last five years, the industry has seen three downturns which have caused imbalance in the market in terms of capacity and put pressure on margins. Despite this, we have been scaling up as we have never been overly dependent on any particular segment. We have a balanced approach in terms of our product portfolio. This year the market will grow by 4 percent.”

The services and marketing teams in India are engaged in supporting emerging technologies in the area of automotive, telecom, set-top boxes, DVDs and smart cards. The team has designed a low-cost, ready-to-manufacture model—the first of its kind in India—for an Indian set-top box manufacturer. It has also been instrumental in supporting STM’s technology partners who have set up operations in the country and have established a strong distribution network to service and support all international and local customers operating in the country.

“Last year the company’s worldwide growth was 21 percent, while the Indian division experienced more than 50 percent growth,” notes Kumar.

Partnerships and governance

STM has established strong relationships with leading Indian universities and research institutions. For example, since 1999, STM has been operating a joint laboratory in Bangalore with the Indian Institute of Science (IISc), one of the premier academic institutions in India. The ST-IISc lab focusses on System-on-a-Chip designs for networking and multimedia applications.

STM is firmly committed to the principle of corporate responsibility, with particular emphasis on environmental protection and bridging the so-called digital divide—the huge imbalance between those who have access to information technology and are able to benefit from it, and those who do not. Within India, STM has signed an MoU with the Ministry of Education, Government of Uttar Pradesh, for teaching schoolteachers in and around the state how to use information technology. An MoU has also been signed with the Leprosy Mission of India to train its constituents in computers and help them earn a living.

kusum@expresscomputeronline.com