Expert View

August 11, 2004
TI banking on India's exploding cellular market

Bangalore Correspondent

BANGALORE -- For the first time, global chipmaker Texas Instruments (TI), is looking at India not merely as an engineering base for its silicon, but as a huge market for its products as well. The company is banking heavily on India's exploding cellular market, which is adding 13 lakh subscribers every month. Rich Templeton, president and CEO, Texas Instruments, who was in Bangalore to inaugurate the new campus, met up with Convergence Plus to discuss about the company's plans for India. Excerpts from the interview:

Convergence plus: What is TI's perception on the mobile explosion taking place?

Rich Templeton: The mobile explosion taking place here is making us work with partners to provide low-cost cell phones and digital appliances for the market. We are working on a single-chip solution for cell phones, apart from our work on 65nm chip, in which the India center is involved. In addition, we see a huge market here for silicon chip embedded consumer electronic products in the next five years. If you make handsets and electronic products less expensive, they reach people in the market place in terms of affordability.

CP: Where do you see the semiconductor industry heading toward?

RT: The first half of this year got off to a good start, and we expect a strong year overall. Our energies are focused on driving market share and earnings growth, and we have sufficient operational flexibility to respond to environmental changes. You have seen results from our focus -- steady gains in market share and operating profit that is approaching record levels.

It is easy to become pessimistic during economic downturns and conclude that the world has fundamentally changed. We observe long-term trends of increasing semiconductor content in electronics equipment, combined with steady electronics equipment growth and remain convinced that we are in a very attractive industry. Some driving forces will change. The maturing PC market will not play the same role in this industry going forward as it has in the past. New communications, broadband and digital consumer products will play an important role in driving growth in future than they have in the past.

CP: Which are the areas in semiconductor that are seeing most traction?

RT: As we are entering the era where communications and entertainment will be the driving forces, the core of such applications would be signal processing technologies provided through DSPs and analog semiconductors.

CP: What is TI's OMAP2 strategy? How is it going to improve the consumer experience?

RT: OMAP2 is TI's next generation of OMAP platform (a family of wireless processors). Processors based on the OMAP2 platform will bring state-of-the-art consumer electronics to the smartphone and make it possible to move a high-quality entertainment experience from your living room to the handset. We believe that OMAP2 processors will stimulate demand for smartphones as they integrate high-quality consumer electronics features.

With OMAP2 processors, end users can get cool features without compromises in the multimedia performance. The OMAP2 chips deliver a quantum leap in multimedia performance boosting video performance by 4X and 3D graphics by 40X. Therefore, your next multimedia phone could take pictures comparable to a standalone digital still camera or offer gaming screens comparable to what you see at home or maybe even function as a personal TV.

CP: How is TI addressing the emerging and price sensitive markets like China, Korea and India?

RT: Price is something all consumers care about. However, they also care about quality, performance, power consumption and other features. With a strong portfolio of products for the wireless, broadband and consumer electronics markets, TI is in a strong position to capitalise on growth in these regions. One strategy TI uses to address large-volume markets such as the voice-centric cell phone market in India and China is integration. TI has announced plans to sample the industry's first single-chip cell phone to customers by the end of this year.

CP: What are the new business units that TI is adding to its fold?

RT: We don't speculate on acquisitions or formation of new business units. However, TI has a venture capital program as well as an internal 'incubation' process in place to identify emerging market opportunities.

CP: How does TI look at India and the development center here?

RT: Our design center in India has been part of our TI-Asia operations for almost 20 years. TI was the first MNC to establish a software development facility in India. It is one example of a number of hardware and software design centers on several continents, including North America, Europe and Asia, including Japan. These centers enable teams of engineers to work 24/7, handing off work at the end of the day to a team that is just coming to work. This enables worldwide collaboration on circuit and software design virtually around the clock, thereby, improving time to market. Speed creates a competitive advantage for TI and our customers.

CP: What growth plans do you have for the India center? Are you bringing more work here?

RT: For almost 20 years, TI has employed highly educated and talented Indian engineers in its Bangalore facility. Since the beginning of 2004, it has hired over a thousand engineers worldwide, slightly more in Asia than in the US. As business grows and as TI continues to gain market share, I expect we'll add engineers globally, but exactly how that breaks out by site is impossible to predict. In order to serve the overseas market and be successful with our global customer base, we need to increase our presence. In terms of design activity, all regions of the world are growing, with Asia growing the fastest.

CP: Are you planning to appoint more tech partners here?

RT: Our third-party program is growing in India. We have over 40 companies working in this model, providing solutions to customers worldwide. In India, we have several off-site development centers working in software and chip design verification. As we grow, we would anticipate adding more tech partners. This will depend on the need for additional skills and scalability. If there is a business need, we will add new partners.

CP: How much has TI earmarked for the engineering activities in India?

RT: We consider specific information of this type to be of a competitive nature. However, I do want to emphasise that the company is extending its almost 20-year commitment to India by broadening its circuit design and software development capabilities at the new facility. TI India is an integral part of worldwide development strategy in bringing about, state-of-the-art products and technologies for customers. Over the years, India has come to play an increasingly important role in the long-term success of TI.

Contact:
Texas Instruments
www.ti.com