Report: India design market hit $6B in 2007

A study by the India Semiconductor Association (ISA) reported that India's design services market grew to $6 billion in 2007, up from $4.6 billion in the previous year. The design sector is expected to grow by over 21 percent during the next three years on a compounded annual growth basis to $10.96 billion, the report said.

In 2007, VLSI design services, employing 13,900 workers, accounted for $766 million of India's total design services, while hardware and board design services employing 9,400 workers accounted for $386 million. Embedded software services, employing 106,000 staffers, constituted the lion's share with $4.9 billion.

Much of India's design work is performed by both Indian companies and their overseas partners with offices in the country. Most of the design work focuses 90- and 65nm process technologies, with a few 45nm design projects, according to market researcher International Data Corp.

Exports accounted for most of India's design services revenues, but higher electronics consumption and localization of product design and manufacturing are expected to account for an increasing share of design revenues in India, said Kapil Dev Singh, country manager for IDC (India) Ltd.

"The next phase of growth will be different," Singh said. "While the current business will continue to grow, the design services industry will get closer to the markets and develop more IP in order to go up the value chain."

Concern over the faltering U.S. economy and a possible slowdown in design projects will put pressure on Indian man-month wage rates. Current engineering man-month rates here are $4,562 for VLSI, $3,854 for embedded software and $3,415 for hardware and board design.

ISA chairman S. Janakiraman said the total Indian design workforce has reached 130,000, and is expected to nearly double over the next three years.

The U.S. accounts for the majority of India's design services and other software exports with about 70 percent. Europe accounted for the rest, while Asian electronics manufacturers from Taiwan and Japan hardly registered in the ISA design survey.

- K.C. Krishnadas
EE Times