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As India looks to develop indigenous graphics processing units (GPUs) amid potential restrictions on exports from the US, California-based Cadence Design Systems said it is open to working with the government. The company also sees the initiative as an opportunity to unlock new business prospects going forward. Cadence specialises in electronic design and automation tools and services.
“If CDAC (Centre for Development of Advanced Computing) or any company does a GPU design, they would need our tools,” Jaswinder Ahuja, India managing director and corporate vice president at Cadence Design Systems told FE. “Whenever there is electronics or semiconductor design happening, that creates an opportunity for Cadence,” Ahuja said, adding this is where an alignment between India’s aspirations and Cadence business comes in.
On January 13, the US announced restrictions on advanced AI chip exports. The new regulations, which are expected to come into effect in the next three months, will cap the number of GPUs that can be exported to most countries. According to Ahuja, the intent behind restrictions by the US is to prevent GPUs going towards unfriendly countries like China. “India will not be as much impacted by it as it is a technology partner and friendly country,” he said.
India contributes a minuscule share to Cadence’s global revenue of over $4 billion. The company is leveraging its Indian workforce of around 4,200 out of a global workforce of over 12,000 employees, largely for research and development purposes.
“When we look at the India market, 80% of our tools are being used by multinationals, in the services, in the global capability centres (GCCs). The remaining 20% comes from a combination of government labs, research labs and Indian companies,” Ahuja said, adding that the takeup of design work by Indian companies is growing far slower than expectations.
Notably, Cadence also provides chip design tools and software to the startups selected under the DLI scheme as well as institutions to support them with chip design infrastructure.
The design-linked incentive (DLI) scheme for semiconductors in the country has not been able to attract good quality proposals from startups so far. According to officials, out of the roughly 60 proposals submitted to the ministry of electronics and IT (MeitY) by these companies to get the benefit of subsidies under the DLI scheme, only 14 have been able to make the cut. The ministry has set itself a target of funding 100 startups.
Of the 14 startups, only a few have been able to secure fabrication orders for their design prototype.
The same assumes significance as chip design, which is the first step in semiconductors cycle, is crucial for generating own intellectual property (IP) in the domain and increasing domestic value addition. Currently, however, global companies are leveraging India for design, because of the talent, but domestic companies are lagging in this.
“A lot of startup proposals (in chip design) are not coming from people who have a clear vision. These proposals are in the category of ‘me too’ proposals, which means imitating the widgets already built somewhere and building it slightly better and slightly cheaper,” Ahuja said.
According to Ahuja, the approach of building something slightly cheaper does not work in the semiconductor industry as already there are incumbent players who ensure quality and have loyal customers.
“India needs more product companies rather than service companies. The end user doesn’t buy chips, the end user buys products. We need to double down as a country to stimulate the product ecosystem, which will boost the chip design ecosystem,” Ahuja said.
Product chip design companies are those that develop and own proprietary semiconductor products, including chips, processors, and intellectual property (IP). They sell chips under their own brand name. Service companies design chips based on specific client requirements.
Notably, the government is working on the next leg of the semiconductor incentive scheme. The government’s plan is to make the DLI scheme better by increasing the funding, and allowing multinational companies and large Indian companies to participate in the scheme.
“The government needs to ensure that anybody that is getting funding should maintain the ownership of intellectual property in the country. Multinationals always keep ownership at the headquarters and they do monetise it worldwide and India will never see any real upside from it,” he said.
Cadence sees a business potential with large companies such as L&T Semiconductor Technologies, entering the chip design segment.
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