BANGALORE, India — A semiconductor policy for the southern Indian state of Karnataka is expected to be announced by the government next month. Government officials hope the chip policy will boost the semiconductor industry here to the same level as its software development sector.

The new semiconductor policy "will address everyone's concerns as it is being done in conjunction with the India Semiconductor Association (ISA) and top industry executives," said Ashok Kumar Manoli, principal secretary for IT, biotechnology and science and technology for the state government.

The blueprint "will address policy issues, incentives, infrastructural matters and keep in mind the emerging trends in semiconductor design," he said here during the Embedded Systems Conference Bangalore, 2009.

Manoli did not reveal specifics of the policy, but TechOnline India has learned that it is likely to focus more on the solar fabs and semiconductor design.

Outsourcing to India rising

Outsourcing to India is growing by 5 percent annually, and 48 percent of all design is at least partially outsourced, said Patrick Mannion, editorial director of TechOnline, a division of TechInsights. Citing the a 2009 embedded study by Embedded Systems Design, Mannion said 57 percent of all designs are late, with the average delay totaling 4.4 months. Sixty-two percent of a design team's resources go toward software, with the remainder used for hardware.

Testing and debugging consumed the most time for embedded design teams, accounting for 24 percent, while final design took up 23 percent. "Integrating new tools and managing code complexity is the biggest concern [50 percent] of these teams, while 30 percent want to change their debug tools. In many ways, these concerns are not new, just increasingly difficult. However, what is changing is not the requirements of design, but how design is done," Mannion said.

Among outsourced designs, 64 percent come India's way compared to 51 percent in 2008. Meanwhile, 33 percent are outsourced to China, a 20 percent jump over 2008.

An emerging trend is reverse outsourcing of designs from India. This means concepts and 90 percent of design work is performed here using global contract designers. Then the design is completed in the U.S. This emerging trend could be very lucrative for Indian companies, and help them create more intellectual property, Mannion added.

Embedded software revenues here totaled $5.98 billion in 2008, accounting for 81 percent of overall design revenue, employing an estimated 125,663 engineers, or 82 percent of all design engineers here.

"India is getting into systems design in a bigger way, and also into product and IP creation, said ISA President Poornima Shenoy. "Defense, automotive, telecom and consumer electronics segments are what will drive the growth of embedded software in India."

Registered delegates for ESC here reached 2,500 this year compared to 750 in 2008, said Sajid Desai, publisher and director of United Business Media India Pvt. Ltd.

—KC Krishnadas is site editor of TechOnline India.