This Rs 50 basic device beeps if the animal goes off the road and a small display panel gives back-up information on how much load the cart has been carrying over the last few trips. This device is not ready yet but will hit the market shortly, says Neeraj Paliwal, vice-president and country manager of NXP India, a semiconductor major.
With tech firms stepping up their research pitch to accommodate innovative features, the semiconductor industry is seeing a rush in demand, specially for chips crucial for research – the PLDs.
PLDs or programmeable logic devices are building blocks on which researchers designing 3D TVs, mobile phones and satellites mount innovative features. What differentiates this from conventional chips is that it can be customised. “These chips are used in infrastructure upgrades and new applications. We have been seeing an increase in demand in emerging markets,” says Neeraj Varma, country manager (sales), Xilinx India.
Analysts tracking this sector say that an increase in demand for PLD chips is a sign of growing research activity in the technology sector. $2.4-billion Xilinx, which commands more than 50% of the global market share for PLDs, has seen chip sales revenue grow from $415 million in Q2FY10 to $620 million in Q2FY11 — a 50% spurt.
So is the case with Altera, another major player in PLDs. “As per rough calculations, our 2010 estimated revenue has been around $1.95 billion, which is a 63% growth compared to the $1.19 billion 2009 revenue,” says Jennifer Lo, senior marketing manager, Asia Pacific, Altera. Rajeev Mehtani, senior vice-president of Cypress Semiconductors India, says his company’s PLD sales have seen a 15% growth over the last year.
“The advantage of PLDs is its flexibility, programmability and speed. But you have to pay a price for it. This can be used only on an ad hoc basis to test new features. This is extensively used in a new design cycle, especially when a new product is being designed,” explains Mehtani.
The cellphone and television markets have been seeing the maximum uptake of PLDs as tech innovations are fastest here. This is supported by a proportional rise in consumer demand for high-end consumer electronic products. Rohit Pandit, business head, home entertainment, LG India, says: “More than 7.5 lakh LCD TVs were sold between January and December 2010.
We target to sell 15 lakh this calendar – which is a 100% growth in sales.” Customer demand for LG’s 3D LCD TVs have also been growing although they are in the high-end bracket (the 47-inch one costing around Rs 2 lakh while the 55-inch one costs Rs 3 lakh).
A hardware researcher, who is currently working on a USB 3.0 compliant technology, says: “The market window for many of the technology products is short-lived. By the time our products hit the market, our competitors would have integrated a more sophisticated version in their products. So, it’s a question of hitting the market fast, making a quick buck and getting out.” And this is probably where the PLDs have been making a mark.
“PLDs are used where the need is to rapidly develop and productise solutions which are big value-adds. The key here is that the demand volume should not be very high,” says S Balajee, director, IC Engineering, India Operations, Texas Instruments. “This was never a ultra high- volume market. Now, almost a million PLDs are shipped to one client,” explains Neeraj Verma of Xilinx.
With customers willing to open their wallets to spend on the latest in technology, research in this sector is moving at a frenzied pace. While the global semiconductor industry spends 10-12% (on an average) of their revenue on research, many companies like Xilinx spend as much as 18% (of their sales) and NXP around 15%, respectively.
Xilinx, which has its biggest unit outside San Jose in Hyderabad has doubled its workforce in the last one year. “Today, PLD chips are used in applications like high-speed transceivers, high definition applications, 3D Tvs and high bandwidth digital displays,” says Balajee. Altera has been seeing an increasing demand in segments like industrial, military, and broadcast applications.
“One of the main values that PLDs bring to a designer is differentiation in his designs compared to other designs using regular (ASIC) chipsets which provide fixed set of functions or features. Additional features like 3D, better streaming, HD quality video may not be supported by regular chips (ASICs) due to their maturity or standardisation, but those features can easily be implemented on PLDs.
Many broadcast applications such as video encoding equipment, editing equipment, cameras, and switchers use these chips to support the growing demand for better, clearer, crisper HD picture quality,” explains Jennifer of Altera.
“PLD sales are likely to go up further as it is widely used in targeted applications like medical and military devices,” says Mr Mehtani. Explaining the crucial role PLDs playing in the satellite space, Neeraj Varma says: “In work on satellites, the noise and radiation levels are very high. For this, radiation-hardened chips are needed. Unlike earlier, PLDs are deployed so that scientists can reprogramme the chips from right here on earth.
With the chip industry seeing tremendous growth in areas where it never saw growth and with the market becoming extremely fragmented, PLDs are likely to see more meaningful applications in future.
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