ISA-Frost & Sullivan, 2006

The ISA-EY Benchmarking Study 2007 benchmarks the semiconductor design sector in India with peer countries on factors of importance to the sector and identifies important high level focus areas and actions to facilitate sustainable growth. Peer countries are Canada, China, Czech Republic, India, Israel, Taiwan, UK and the USA. Some of the main findings which clearly position as India as an attractive design hub are:

•          Availability and scalability of talent

•          Quality of talent

•          Quality of technical education

•          Talent cost advantage

The increased flow of international companies setting up their offshore design and development base and the ramping up of engineering human resource in the existing set up, including the non-captive companies is expected to drive the revenues for the total design market in India.

Why are companies coming to India?

This can be attributed to a few key points.

• Highly dynamic markets demanding new product variants/models from companies have forced original equipment manufacturers (OEMs) /product companies to reduce the product development cycle time by outsourcing to companies
• Declining margins and research and development budgets have forced companies to look for cost-effective centers without compromising on the quality of work
• Availability of a huge base of engineering workforce coupled with their proficiency in English has made India an attractive destination for design and development.

Captive companies i.e. subsidiaries of multinational companies, making strategic investments in India are looking at the growing domestic market by 2015 and the consistency of consumption growth in the end-user markets.