NEW DELHI: The $9.85-billion chipmaker STMicroelectronics (ST) is trying to become a 'lighter' company by outsourcing chip manufacturing and concentrating on design of complex and high-end chips for the industry. Theirry Tingaud, corporate vice-president, emerging markets region, STM, was recently in India and shared the company’s plan for India and technology trends for 2008. Excerpts:
What is STMicroelectronics (ST) India strategy?
We have been working on two strategies. One is on the business development side, where there has been significant success in India. And the second is the development of the local design centre. We have 1,800 people in Greater Noida and Bangalore design centers and we expect to ramp up to 3,000 people in over three years. We would look at making ST India a leading design centre outside Europe.
We do different activities at ST India Design center. We have been developing chips for set-top-boxes for DTH/CAS, automotive, telecom etc. We see these areas having a great future over here.
Apart from chips for set-top-boxes, what are the other design tasks that you are doing in India?
We have a variety of applications for telecommunication, on wireless mobile phone, multi-media application processor, automotive chips, printer solutions etc. We develop chips for industrial product application as well. We are working on developing libraries for latest process technologies for example 65- and 45 nanometer (size of etching on silicon wafer). The latest technologies such as 65- and 45-nanometer increase the capability of chips dramatically. We can embed more memory and more processors on the same chip. The capability of overall chip becomes higher.
Recently, ST announced shutting down some of its fabs. Do you believe that chip making is not as important as design?
ST is working on becoming a `lighter’ company in terms of assets — finding the best balance between keeping control over manufacturing of proprietary and leading-edge products and technologies and reducing costs. Our objective is to rapidly increase sourcing from foundries from less than 10% to 15% plus.
The government announced the semiconductor policy some time back. Is it attractive now for ST to set up a fab here?
Setting up any fab unit requires an investment of $2.5 billion-$3 billion. To sustain this investment, one needs to have sales of $2.5 billion to $3 billion a year. At present, the Indian market is much lower than this figure. However, the recent semiconductor policy should fuel electronic manufacturing in India such as LCD panels, solar fabs etc. On the other hand, there is a lot of scope to develop semiconductor related ecosystem in India with universities, mostly on the product development side.
