Get email delivery of the Cadence blog featured here
Jaswinder Ahuja is well-known to everyone in the semiconductor and electronics industry in India. He has been Cadence India’s Managing Director since 1996, and is one of the handful of employees WW who will be completing 30 years with Cadence. He is also President of the VSI Society of India and just yesterday the Society conferred the Lifetime Achievement Award on him - he is the first recipient of this award! Jaswinder is actively involved in the Indian Semiconductor and Electronics Association (IESA), the industry’s trade body; he served as Chairman in 2008-09 and has been a member of the Executive Council several times.
For the last several years, Jaswinder has written a piece at the beginning of the year about his thoughts on the direction of the Indian semiconductor industry. This year, I wanted to do this in an interview format specially for The India Circuit, and so here it is.
If recent news reports are to be believed, 2018 bids fair to witness some exciting developments in semiconductors and electronics. The Economic Times reported that the global sales of semiconductors are expected to rise in 2018, though the same article also mentioned that the pace of growth is likely to slow down. But before jumping to 2018, let’s see what 2017 was like.
Madhavi: What would you say were the noteworthy developments in 2017 in the Indian semicon and electronics ecosystem?
Jaswinder: One thing that was noteworthy was the buzz around IOT startups – not only was the industry talking about IOT startups, the press seemed to be awash with articles about it. And with good reason. According to some sources there are nearly 1,000 startups involved in IOT – that’s huge! But most of them are in the software space. What is of interest to the semiconductor and electronics sectors is, how many of those hundreds of startups are involved in electronic system design and manufacturing (EDSM)? That will help us understand if IOT is a significant opportunity as yet for those of us in the Indian semiconductor industry.
You have already written a blog on the fab story in India so far. There wasn’t much movement on that front in 2017, although my friend Ajay Jalan’s venture fund Next Orbit Ventures did announce in 2017 that they were planning to invest in three fabs. But, as I have mentioned earlier, fabs require much more than just funding; only time will tell how the fab landscape develops.
The other thing that was interesting was the huge amount of press around electric vehicles (EVs), especially in light of the news that the NDA government wants all vehicles in India are to be EVs by 2030. While India is one of the least penetrated automobile markets in the world, it is one of the first to come out with a timeframe to convert to EVs. While big auto manufacturers like Tata Motors, Mahindra & Mahindra and Maruti are scrambling to ramp up production of electric vehicles, this presents a huge opportunity for Indian ESDM companies, including startups.
Madhavi: Your thoughts on how 2018 will look for startups?
Jaswinder: Like I mentioned, startups of all types have been in the news for the last few years, and I expect that they will continue to mushroom and grow for the next few years, as long as funding is available. At this time, startups in the semiconductor space appear to be few, because most startups are focusing on software, services or solutions but not products per se. Once they get a solid proof of concept and move on to the deploy and scale part of their business plan, then they will look for specialized hardware that will help optimize the solution, and that’s when chip design comes into the picture.
There is a huge opportunity for Indian startups that solve “India’s problems”, so to speak. There are so many areas which could benefit from innovative solutions – education, security, environment, renewable energy, agriculture, transport, urbanization, employment generation – and even if there currently are startups in these verticals, the domestic market alone is so big that there is enough opportunity for many more.
According to reports India has the third largest number of startups in the world, so this is definitely a space worth watching. In this context, incubators become important, as they overcome entry barriers for startups by providing infrastructure, lab facilities, software, funding, industry connections and even mentoring. Cadence (and I in my personal capacity) has been involved with one such incubation center that is focused on ESDM startups, the Electropreneur Park that is based in the Delhi University campus. In addition to the ESDM incubator, there is a need for a fabless chip incubator as well. Universities have a big part to play in incubators and we hope to see more of them come up around the country.
Madhavi: What about electric vehicles – there is so much news about that at the moment. Will there be an impact on the ESDM ecosystem?
Jaswinder: As of now, there hasn’t been much impact but that may be because the intention to move to EVs was announced only a few months ago. However, companies from Tesla to Skoda to our own Tata Motors, Mahindra & Mahindra and Maruti have announced aggressive plans for manufacturing and/or retailing EVs in India.
The Ministry of New and Renewable Resources has announced that it wants to achieve 175 gigawatt (GW) of renewable energy capacity by 2022. Of this, 100GW is to come from solar, which makes sense considering that India has rich solar potential. EVs and solar are closely linked because of the energy storage potential of EV batteries. Lithium battery prices have reduced significantly over the years, and coupled with plans to set up a network of charging stations nationwide by both the Government and private companies, solar power is on the threshold of reaching every corner of India.
In terms of the ESDM ecosystem, the opportunity arises because India does not have stores of lithium to produce lithium-ion batteries locally. How to circumvent that? That is where semiconductors could help. Plus, on the manufacturing side, battery manufacturing is critical and one of the areas on which the Government and automotive companies need to focus to make EVs in India a reality by 2030.
Madhavi: Any last thoughts about the coming year?
Jaswinder: As I have said before, the need of the hour is policy implementation in accordance with local government standards. For example, the National Policy on Electronics announced back in 2011 outlined a comprehensive roadmap, covering incubation centers, an Electronics Development Fund and manpower initiatives, but we have yet to see real progress on implementation.
The Times of India reported a few days ago that official sources have said that domestic production of electronics in 2016-17 was greater in dollar terms that the imports. This is great news. With the implementation of Government policies that have already been announced and more startups in the ESDM space, I hope to see a more vibrant ESDM ecosystem coming to the fore.