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First ‘Made in India’ Chip Not Before 2010

A year after India announced its semiconductor policy for the first time to facilitate investment in the business and encourage chip manufacturing in the country, the government has not received any formal applications to set up chip making, or fabrication units.

Two companies, SemIndia Systems and Hindustan Semiconductor Manufacturing Corp., have made public announcements about their fab units but are yet to apply to the government for permission to set up the units.

The policy has resulted in investment or proposals for investments of around Rs. 400 billion, but this does not include any for chip making plants, said M. Madhavan Nambiar, special secretary, ministry of communications and IT.

“A formal proposal to set up chip fab unit with a Rs. 2.5 million fee (that needs to be sent along with the application as an indication of seriousness) hasn’t yet come to us, but we expect some announcements in the next two months,” Nambiar added on the sidelines of the third annual event of industry body Indian Semiconductor Association in the city.

The first made-in-India chip is not likely to hit the market before 2010.

Front-runners SemIndia and HSMC have said they will invest $3 billion and $1 billion, respectively, in their fab units. But executives at both firms said they needed time to identify potential investors and plan their units, and that their applications would be submitted soon after the companies had raised money.

On an average, a fab rolls out its first chip two years after the beginning of construction of the plant.

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Wipro Launches Global Service Management Center

Wipro Limited, a leading provider of IT solutions and services, Feb. 21 announced the launch of its global service management center in Cyberjaya, Malaysia.

This center will cater to the infrastructure and application management service requirements of customers across the ASEAN region through a remote service delivery model, a Wipro release said in Bangalore.

The state-of-the-art remote service delivery center will provide seamless integrated services on heterogeneous technology environments. Services offered from this center, include data center management, network management, call center technology management and business service management.

The center will be the nerve center for providing multilingual technical support to customers.

“Asia Pacific is the focus market for us. It will bring us closer to our customers in the ASEAN region and thereby allowing us to provide better support by adopting a proactive approach, using best in class remote monitoring tools, robust processes using the ITL framework and a team of highly skilled technology experts,” said Thandava Murthy, chief executive, professional services division, Wipro Infotech.

Wipro has also recently been awarded the MSC Malaysia status from the Malaysian government.

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TCS: $120 Million Deal

India’s largest software exporter Tata Consultancy Services said that it has bagged a multi-year deal from U.S. auto maker Chrysler LLC for providing a comprehensive portfolio of IT services.

The company did not disclose the value of the deal. However, according to the media reports the deal is worth $120 million.

TCS will deliver application maintenance and support services to Chrysler. The IT services initiative would encompass a portion of the functional areas within Chrysler, such as sales and marketing and shared services, the company said in a filing to the Bombay Stock Exchange.

“This growing trusted partnership is a testament to TCS’ competencies and capabilities which continue to help the customer in its business transformation by providing innovative IT services scalable to their needs,” Tata Consultancy Services executive director and chief operating officer N. Chandrasekaran said.

The automotive industry is one of the focus markets for the TCS Manufacturing vertical, which accounted for 15.1 percent of TCS financial year 2007 global revenues worth $4.3 billion.

TCS provides services to many of the automotive original equipment manufacturers and tier one companies in North America, Europe and Japan.

These services are provided across the entire automotive value stream, including product development, manufacturing, supply chain and customer experience areas.

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INFOSYS: Best Global

Reflecting the outsourcing prowess of India, around 20 Indian companies, including the likes of Infosys, Wipro and Tata Consultancy Services, are among the best in the world.

“The 2008 Global Outsourcing 100” list compiled by the International Association of Outsourcing Professionals has named about 20 companies based in India.

Among them are India’s top software exporters — Tata Consultancy Services, Infosys, HCL Technologies and Wipro Technologies, while Genpact, WNS and EXLService are leading BPO firms listed in the U.S.

The others figuring in the list are MindTree Consulting, Aditya Birla Minacs, Patni, Quest, Tech Mahindra, Mastek, KPIT Cummins, Convergys, Zenzar Technologies, First Source, ITC Infotech, Hexaware and 24/7 Customer.

The evaluation process for compiling the list mainly takes into consideration the size and growth in revenue of the company, its employees, centers and countries served, management capabilities, competencies and customer experience.

The list also features many foreign entities that have a substantial presence in

India

. Most of these companies are American such as Accenture, Cognizant Technologies, IBM, ADP, Xerox, CB Richard Ellis and Hewlett-Packard.

Other names include Cushman & Wakefield, Unisys, Hewitt and French firm Capgemini.

According to IAOP, the list includes firms providing outsourcing services — “not just information technology and business process outsourcing, but areas such as facility services, real estate and capital asset management, manufacturing and logistics.”

In a statement, C.B. Richard Ellis, chairman and managing director (South Asia) of Anshuman Magazine, said: “It is always good to be recognised but when it is from someone like the International Association of Outsourcing Professionals, it is even more valuable. Such recognition encourages our team and inspires us to give the best in class service to our clients.”

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IBM: Fast Expansion

The world’s largest computer services firm IBM, which won multi-year outsourcing deals worth $1.4 billion in the December quarter in India, expects to continue its fast-paced expansion as it lands more local business customers for flexibly structured solutions using what are called “service-oriented architecture” or SOA technologies.

The adoption of SOA, which IBM executives believe gives the firm an edge over some rivals, comes at a time when local customers are adopting newer technology to cut costs and fight competition with nimbler features.

SOA refers to a loosely-tied collection of software applications designed to carry out individual tasks. Each application is self-contained and works with another piece of software depending on the need.

The architecture reduces the cost of deployment and increases flexibility in use of software that run businesses.

“The acceptance of SOA among larger clients in India is on par with clients in developed countries such as (the) U.S. and Europe,” said Robert J. LeBlanc, general manager of global consulting services and SOA of IBM’s global business services division. IBM is seeing interest from both existing and new clients for its SOA offerings, he added.

In the December quarter, IBM won three large deals: a $600 million information technology outsourcing contract with Vodafone Essar Ltd, India’s third largest mobile phone services firm by customers; Idea Cellular Ltd, the country’s sixth-ranked phone firm; and a large deal from an as yet unidentified customer.

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Hindi Identity

Come year-end and India could be among the first few countries in the world to have internationalized, or multilingual, Internet domain names represented by local language characters such as those from the Devanagari script on which Hindi is based instead of widely used Latin characters such as in English.

Currently, while Hindi words can be used as domain names, they are usually spelled out in English.

The need for IDNs, as internationalized domain names are also referred to, stems from demand from businesses, registrars, users of the Internet and governments for top-level domains in characters other from English. At present, the American Standard Code for Information Interchange, or ASCII, which is the standard for writing code based on the English alphabet, dominates domain names. It has around 37 characters and is used by computers to display letters, digits and special characters.

Once IDNs are allowed, domain names such as www.rediff.in can be spelt out in Hindi and other local languages, helping increase their reach.

“There is a process being discussed among our communities about whether there could be a fast track for a group of countries that have a need for IDNs earlier than the others.

India

is making that case and is clearly one of those countries that is appearing inside of that discussion. But that has not been finalized yet,” Paul Twomey, president and chief executive officer of ICANN, short for Internet Corporation for Assigned Names and Numbers, had told Mint in an interview. The normal course for the IDN application process is two years.

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Firms Eye Japan

With a likely softening of demand in a slowing U.S. economy, Indian vendors such as Tata Consultancy Services Ltd, Wipro Ltd, Satyam Computer Services and HCL Technologies are increasing their focus on a market that has until now not believed too much in outsourcing: Japan, the world’s second largest economy.

Traditionally, Japanese corporations have outsourced tech and support services to their information technology or IT units or have relied on relationships built over years with local vendors.

There has been “a lack of competitive element which has not pushed them to think differently,” said Sanjeev Nikore, corporate vice-president and global head of sales and marketing at HCL Technologies. With increasing global competition, “that is changing,” he added.

According to estimates by TCS, by 2010, IT spending in Japan will touch $95 billion growing at an annual rate of 3.2 percent from 2005. Currently, work worth around $32 billion is outsourced, a number expected to grow by a quarter to $40 billion by 2010. Around four percent, equivalent to $1.28 billion, of the outsourced work is sent to offshore locations — a market segment that a TCS spokesperson, quoting research compiled internally, said is expected at $5 billion by 2010.

Though it takes time, said Yukihara Yorifuji, IT services group manager at researcher International Data Corp.,

Japan

, some Japanese customers “may delegate even custom development.” Local businesses, Yorifuji said, through a spokesperson, could ship work directly to offshore firms bypassing local vendors.

The top five tech service vendors in Japan are Fujitsu Ltd, NEC Corp., Hitachi Ltd, a local unit of IBM, and NTT Data Corp. IBM Japan, set up in 1937, is the only non-Japanese firm with a strong presence.

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Global Expansion

Tata Communications will spend $2 billion over the next three years to expand globally as it seeks to boost overseas revenue, a top official said Feb. 14.

The company is building undersea cables between Asia and Europe and also across Asia, including in a consortium cable system between India and France. “We are seeking to grow our enterprise services business globally,” managing director N. Srinath said. “Within

India

, we are building in-city infrastructure and focusing on broadband.”

He said $500 million would be invested in undersea cables, and a similar amount in network services. The remainder would be spent on enhancing value-added services.

The firm’s shares provisionally rose 5.4 percent to Rs. 472 in a firm Mumbai market that rose 2.5 percent.

Another official said it had formed a partnership in China that would enable Tata’s global clients gain access to customers in China.

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CURRENT ISSUE IN PDF
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COVER STORY
Firearms in America:
A Free Market for Guns, Violence
America’s free market, primitive laws and dark-age social customs are responsible for never-ending campus tragedies, writes Partha Banerjee.

ENVIRONMENT
How Poor Nations Pay:
The Environmental Cost
The environmental damage caused by rich nations costs poor nations more than their combined foreign debt, according to a UC Berkeley study. A Siliconeer report.

DIARY
Letters from My Motherland:
An India Journal
Despite the myriad frustrations — Delhi’s awful traffic jams, poor sanitation, constant honking and badmash auto rickshaw drivers — after a few months, India became her home, writes Preeti Tijoriwal.

OTHER STORIES
EDITORIAL: Gun Violence
NEWS DIARY: February
WORLD ECONOMY: BBC Global Survey
ENVIRONMENT: Bhopal Survivors March
RECOGNITION: Outstanding Engineers
SUBCONTINENT: Indian Green Energy Giant
SUBCONTINENT: Rising Rupee & Indian IT
HEALTH: Tackling Cholesterol
TRAVEL: Wide World of Fast Food
BUSINESS: News Briefs
COMMUNITY: News in Brief
INFOTECH INDIA: Round-up
AUTO REVIEW: 2008 Buick Enclave
BOLLYWOOD: Jodhaa Akbar
BOLLYWOOD: Guftugu
TAMIL CINEMA: Kaalai
RECIPE: Paneer Tikka
HOROSCOPE: March

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