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May 19, 1998


Designer dreams

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MAIT has a blueprint to make India the world's
leading centre for IT design. But will it fly?

Priya Ganapati in Bombay

The Manufacturers Association for Information Technology has set itself the task of making India the IT design centre of the world by 2005.


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Well, the jury is split. When Rediff On The Net polled industry experts it sparked off a debate that questioned the very fundamentals of MAIT's ambition.

The nays were few. The ayes many. And though there seems to be no rock of hard facts below the foundation of MAIT's claims, optimism runs high in the industry.

Consider the figures. MAIT projects that by 2005 exports of hardware design and products will rise to over $5 billion. That's just seven years from now to beat the masters of the game: the US itself and others like Singapore and Taiwan.

When asked why 2005, MAIT Deputy Director Vinnie Mehta felt that the industry would have gained critical mass by then.

But Texas Instruments India spokesperson Jaidev Raja disagrees. "MAIT is not being very realistic. It will probably take us another 10 to 12 years to just come up with an independent design team. This is a long process. It cannot happen overnight," he points out. And he should know. Texas Instruments recently became the first US company to have designed a chip entirely in the country.

Yet, Raja's may be a lone voice of dissent against the cheer that's gone up in MAIT's support.

ICICI Chairperson N Vaghul is confident that the industry can do it and should take the plunge. He, in fact, has collaborated with MAIT in its efforts to woo back design talent of Indian origin in the US.

Because IT design is the next big wave, Vaghul insists that the time's ripe to push for it. "We cannot be at the lower end of the IT industry forever. We have the competitive advantage. In software, we are just doing small parts like body shopping. We have no alternative but to get into design. We missed the semiconductor revolution bus in the Seventies to countries like Korea. We should not end up missing this bus too."

Splendid! But where is the technical work force to push MAIT's plans through. Do we have the sufficient number of design engineers and are they on par with the best of the best in Silicon Valley?

Mehta admits the global shortage of design talent is not going to make MAIT's job easy. But then, hope springs eternal in the human heart. "As and when the sector matures, you will find training institutes and design centres gearing up to suit the needs. Shortfall exists in software today but that does not stop one from being competitive," he argues.

Vaghul goes beyond this. "Young talented and aspiring people are all that is needed."

Another easier and quicker method to marshal the manpower, figures MAIT, is to reverse the brain drain to Silicon Valley. But that's easier said than done.

In February, MAIT President Manu Parpia declared that they would set up a permanent committee for wooing Valley professionals of Indian origin abroad. Mehta now says that the committee is still not in place. He assures it would be ready within two months as matters are in a final stage.

MAIT hopes that if the design business in the country takes off it would become a natural precursor to growing the manufacturing industry.

"When the design sector matures, ancillary industries to support chip manufacture will come up," claims Mehta. MAIT is looking at designing chips, peripherals, notebooks and printed circuit boards among other things.

Surprisingly, most hardware and chip design companies in India are unanimous that manufacturing chips in the country is not feasible.

Wipro Infotech Vice-President, Engineering, Victor Jayakaran warns that the seed capital for setting up an IC fabrication plant would be prohibitively expensive for any potential investor in the country. "Are there a lot of companies willing to make the enormous investments that are required?" questions Jayakaran. "I don't see manufacturing coming up in India in a big way. Even companies like Texas Instruments who are designing chips in India have their fabs in the US or the Middle East," he points out.

Even Vaghul, who's become a kind of a design centre evangelist, agrees with Jayakaran here. Mentally, he is not ready to make the transition from design to manufacturing. "It's a little late in the day to talk about that. Our own efforts in Chandigarh (the government run SCL fab) did not take off very well."

That leaves India with only design work. But can this crippled plan get MAIT to its target on time?

All the design cost benefits accruing to a low wage bill in the country are offset because manufacturing and marketing of chips take place overseas. Then, are the low Indian salaries an advantage at all?

Designing chips in India, estimates Jayakaran, gives a saving of about 33 per cent in engineering costs. Raja puts the figure at 50 per cent.

However dramatic these savings may seem, they do not percolate down to the street price of the chip. Finally, the net price of a chip designed in India will be no different from another coming out of a design shop in the Valley.

Then how did the Texas chip happen in India? "It is a lot easier to build a team in India. And when you give customers a product ahead of time, they pay a premium for it," is Jayakaran's guess about the multinational's bets.

Texas Instrument's Raja agrees. He confides "the real big money" lies in manufacturing and not just designing.

Now that we have been able to remove the greys considerably between the blacks and whites of the issue, where does it put MAIT and its $5 billion target by 2005?

All agree that sustained efforts, simplified import and export policies and improvement in communication and infrastructure would help.

Then there is the warm assurance from those already on the road. Hardware and chip design work is being done by DCM Data Systems, Texas Instruments India, Wipro Infotech and HCL.

Wipro Infotech has designed a full-fledged networking ATM system for local and wide areas, an IEEEB94 link chip and a cash-control system for a client in the US. Texas Instruments has indigenously developed a 'digital signal processor' chip called 'Ankoor'.

"We are making chips for mobile communications and FPCA (functional programming languages and computer architecture). In IT design we are active in ASIC (application specific integrated circuit)," DCM Data Systems Senior Project Manager Kanti Kumar says.

But such a silver lining can be dangerously deceptive. When you are talking of a nation developing a critical industry, you need to do better than cite a handful of success stories.

But corporate legends like Vaghul refuse to get gloomy: "We have the required knowledge base. The rest of the world is getting older while 40 per cent of our people are around 30 years old. Though our level of primary education is quite low, our advanced education is much better. We have efficient manpower to achieve our goals."


Either way, click through for the warning! Vinod Dham, the biological engine behind every Pentium across the world, plays the Devil's advocate. In a Rediff exclusive, he cautions MAIT that in reality "the Devil is in the details."


Texas is in South India

MAIT is wooing Indian designers in the US

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