Outlook for solar photovoltaics in 2009!

Friends and dear readers, this is my last blog post for 2008! Indeed, what a year this has been!!

Let me bid this year goodbye with a general outlook on the global solar photovoltaics industry for 2009.

iSuppli had recently put out a report on solar eclipse coming in 2009! I had blogged about the possible solar sunburn ahead, as well, earlier last week!

Another point that has interested me is: what happens to the top 20 global solar photovoltaic companies, based on iSuppli's analysis! This blog post has perhaps been the most popular in recent times.

I was very lucky to re-associate with Dr. Henning Wicht, Senior Director, Principal Analyst, iSuppli Deutschland GmbH, in Munich, Germany, for this discussion, thanks to the efforts of Jon Cassell and Debra Jaramilla!

How bad is solar?
The first and the most obvious question: how bad is the global solar market right now and why?

According to iSuppli, bringing an end to eight consecutive years of growth, global revenue for photovoltaic (PV), panels is likely to plunge by nearly 20 percent in 2009, as a massive oversupply causes prices to drop!

Worldwide revenue from shipments of panels will decline to $12.9 billion in 2009, down 19.1 percent from $15.9 billion in 2008. A drop of this magnitude has not occurred in the last 10 years and likely has not happened in the entire history of the solar industry.

Dr. Henning Wicht says that the upstream part of the solar business (cell, module, etc.) will suffer from price decline due to strong oversupply. The downstream side will benefit (installation, end-user, investor, etc.) by lower system prices.

Therefore, what can the solar players do to get over this coming bad phase in 2009? Well, three things: improve the cost structure, improve the sales side, and diversify downstream… These points hold strong for all fully integrated and non-integrated solar panel suppliers as well. By the way, fully integrated solar panel suppliers are likely to suffer less severe losses than non-integrated competitors.

There must be some way around to to bring about some balance within the current imbalance in the demand and supply situation. While Dr. Wicht agrees this is a difficult one to answer this early, he adds that supply and demand are diverging heavily. "With the current trajectories even in 2012, 100 percent more modules are produced than installed," he says. I promise to discuss this question again with the good Dr. in another six months time.

Word of wisdom
There are various support programs in place, and it is important to know whether they will continue to remain beneficial, both to support markets to become independent sustainable and to develop the regional industry.

Dr. Wicht believes the support programs are still required and beneficial. "If China, India, Mexico and other sunny regions would start to support solar installations, that could change the picture drastically," he notes.

A note of warning for new entrants in the solar photovoltaic space! Be aware that this warning has been earlier highlighted in the global semiconductor outlook for 2009! In tune with what the various analysts have maintained earlier, iSuppli also forsees newcomers in the solar photovoltaic line having problems in getting the required credit for their projects.

What next for Europe, emerging regions?
According to iSuppli, the short-term boost in demand from Spain and Germany has kept the installation companies busy, and solar orders and module prices high. But this boom is over. So, what's next for European players?

According to Dr. Wicht, Germany and Spain should continue their leading role as solar installation regions, even after the boom. France, Italy and Czech Republic are attractive, but still much smaller markets, he maintains.

iSuppli has also mentioned that the race to larger manufacturing scale comes to an end when the production is not sold anymore! In that case, what's the case for the emerging nations, like China and India? Aren't there buyers in such places?

Dr. Wicht says: "Demand in the traditional solar markets is not elastic enough to absorb all of the solar production. Potential new markets, for example, China and India, do not yet have installation capacities and administration to significantly change the global solar demand short term."

iSuppli also feels that the newer Chinese and Taiwanese suppliers will be hit particularly hard during 2009. The reason being, many suppliers have expanded their production capacities heavily without securing equally the sales/downstream part.

Global top 20 rankings to change?
Now to the most interesting part! Most of you have read about the top 20 global solar photovoltaic suppliers. Following the iSuppli warning of a 'solar eclipse' in 2009, there is every likelihood that there will be changes in that table!

Dr. Wicht adds, "However, the top 10 companies are typically better placed than the competition regarding their cost structures, downstream integration and vertical integration."

Obama's solar plans!
Now on to yet other interesting point! The US President-elect, Barack Obama's, New Energy for America plan could well have a significant impact on the US solar industry.

The plan's provisions include:

• A federal renewable portfolio standard (RPS) that requires 10 percent of electricity consumed in the US to come from renewable sources by 2012.
• A $150 billion investment over 10 years in research, technology demonstration and commercial deployment of clean energy technology.
• Extension of production tax credits for five years to encourage renewable energy production.
• A cap-and-trade system of carbon credits to provide an incentive for businesses to reduce greenhouse gas emissions.

Dr. Wicht says: "We all know that Obama is in favor of renewable energy. However, he will not change a 160 percent oversupply of solar panels in 2009."

Bumpy ride to grid parity?
On another note, and a pretty favorite one: Is it going to be a "bumpy road" to grid parity? How will the subsidies be kept going?

Dr. Wicht notes: "Subsidies will continue. It will always be a bumby road because the ramping cycles differ heavily among silicon, cells, modules and the installation capacity. Please remember that the installation business will now benefit from low module prices. It will recover some of the margins it has lost in the last years due to high module prices."

Also, up to when will polysilicon constraints last? iSuppli had earlier indicated PV strategy changes. According to Dr. Wicht, the polysilicon prices are coming down already. "Our indication from October 2008 seems to be fairly good," he says.

Lastly, will iSuppli be still sticking by solar, semicon investments being equal by 2010?

Dr. Wicht says: "Please let me cite again our interview in October: The investments for solar production raising up to several hundreds of Mio USD, up to 1 Bio $ per production site. That is coming close to a semiconductor fab. The total capex of semiconductor is still 10 times larger than PV. However, PV is rising much faster."

That will be all for this year, folks!

Look forward to sharing much more captivating moments in semiconductors, electronics, solar photovoltaics, telecom, etc., in 2009!

Wishing all of you a very happy, prosperous and successful 2009. Be safe and look after yourself! See you next year!! :)

Why solar/PV is good for India? An ISA perspective!

Recently, the India Semiconductor Association (ISA) held an educative briefing session on the potential of the solar PV market in India, which was conducted by Rajiv Jain, Director, Government Relations, ISA.

This meeting was held well before iSuppli issued a warning that there could be global solar sunburn in 2009! I am sincerely hoping that most of the points mentioned by ISA's Jain still hold good in the coming year, and that India really does well and takes off in solar photovoltaics.

The ISA's vision: To help make India an attractive global destination for PV manufacturing and a world leader in solar energy.

Starting with the basics of photovoltaics, he said that it is a package of solar cells used to convert energy from sun to electricity. In simpler words, photons from sunlight knock electrons into higher state of energy, thus creating electricity. The electricity can be used to power equipment or recharge a battery. A typical PV system mainly consists of a PV module, battery, inverter, controller and junction box.

Focusing on the technological landscape, he touched upon the two key technologies for solar: crystalline and thin film.

Crystalline silicon is said to be the most mature Si wafer technology, with the largest market share. Though, high on cost, it has a typical efficieny of 14-18 percent. Crystalline silicon is said to suitable for rooftop applications.

Thin film is nothing but thin layers of photosensitive materials on glass. It is currently on high growth due to silicon shortage, and very low on cost due to low material consumption. The efficiency is about 6.5-8 percent.

A third technology, nanotechnology, is the future technology for cost reduction. It is more in the R&D space as of now.

Present scenario for solar
So what's the present scenario? In 2007, of $71 billion invested in new renewable energy (RE) capacity globally, 30 percent was in solar PV. It is the fastest growing area in the energy sector, with a CAGR of 47 percent over the last five years.

Grid-connected solar PV has been high growth market segment in 2007 (50 percent increase). Also, 86 percent of the PV installations are largely in four countries, with Germany at 47 percent being the outright leader.

Market drivers are said to be attractive feed-in tariffs, national PV market development and acceptance, RE obligations through solar PV, access to cheaper mode of finance, manufacturing incentives as well as strong R&D.

Why solar for India
I have addressed this in an earlier blog post. Here's what Jain had to say, and it is mostly in line with the earlier discussions.

First, India has among the highest solar irradiance globally. It also has the best quality reserves of silica in Orissa and Andhra Pradesh. India has also established itself low cost producer and assembler of solar PV cells and modules.

The major challenges include attaining scale and integration for cost reduction, and, R&D for development of the industry.

Solar insolation in India
To start with, the daily average solar energy incident varies from 4-7kWh per m2. Next, we have multiple sites with solar irradiation >2000 hours per year. In contrast, Germany has 900-1,200 hours per year. Further, most parts of India have 300-300 sunny days in a year translating into a potential of 600GW. Also, potential in some states like Rajasthan is 35-40 MW per m2.

It is well known that the Indian semiconductor policy of 2007 has triggered off the now well publicized efforts in solar initiatives. The government of India has received 16 applications with investments envisaged at app Rs. 1,55,000 crores.

The investments in solar PV manufacturing exceed Rs 1,25,000 crores. Generation based incentives (GBI) are going to be key.

Potential market segments in India
There are quite a few, actually. In rural electrification, the government of India's target is to achieve 'Electricity for all by 2012'. About 18,000 remote villages will likely be electrified through RE. About ~25 percent of the remote villages, i.e., 4,500 villages, form a very viable market.

Next comes telecom back-up power! PV is a cost effective alternative to diesel generators (DG) for back up power for shorter duration, as DG based systems suffer from several disadvantages.

Another key market could be grid connected solar PV based generation. Current tariffs do not provide attractive IRR to developers. Decreasing system prices are however, likely to improve the economics.

Finally, roof based BIPV is said to be an alternative to reduce the cost of power procured by commercial buildings.

ISA's recommendations
The ISA has also made salient recommendations via its report on the industry. These include areas such as manufacturing: with an aim to encourage companies investing in 'Scale and integration', provision of capital subsidy to larger number of units, availability of funds at a cheaper rate, and an emphasis on R&D.

Also, the ISA has recommended that GBI be given for a tenure of 20 years, with the present period being 10 years. Further, it has suggested an accelerated depreciation along with the GBI scheme, and the availability of GBI for an unlimited capacity for a period of five years. The ISA has recommended an enactment of the RE Law requiring utilities to progressively increase power purchase from RE.

On its part, the ISA has been working with the government of India and various state governments as well. It has a sound rapport with concerned ministries - MNRE, DIT and NMCC.

The ISA has also assisted in the technical evaluation of solar PV proposals received in Fab City, Hyderabad. It has also drafted a semiconductor policy for the government of Karnataka, which should be out early next year, hopefully. The ISA is also working with several other state governments to promote the industry in their states.

The second ISA Solar PV Conclave is scheduled for November 2009 at Hyderabad.

Very good intentions, all of these! Now, for the Indian industry and the government to deliver, and walk hand in hand!!

Solar sunburn likely in 2009? India, are you listening?

iSuppli's just issued a warning that 2009 could well see the coming of a solar market eclipse!

Come to think of it! Just last week, in the Semiconductor International webcast, the analysts did mention that there could be tough times ahead for solar! In fact, Aida Jebens, Senior Economist, VLSI Research Inc., did indicate that solar/PV would pick up in the next two years and that 2009 could be a tough year.

If you look at the India situation, I have been getting the feeling all the time that all of a sudden, too many companies were entering this market segment, as though it is a land of promised gold! Perhaps, it is, and one sincerely wishes that all of those investments proposed for solar do not come unstuck.

This August, following the announcement of the national semiconductor policy (the Special Incentive Package Scheme, or SIPS), the government of India received 12 proposals amounting to a total investment of Rs. 92,915.38 crore. Ten of these proposals were for solar/PV, from: KSK Surya (Rs. 3,211 crore), Lanco Solar (Rs. 12,938 crore), PV Technologies India (Rs. 6,000 crore), Phoenix Solar India (Rs.1,200 crore), Reliance Industries (Rs.11,631 crore), Signet Solar (Rs. 9,672 crore), Solar Semiconductor (Rs.11,821 crore), TF Solar Power (Rs. 2,348 crore), Tata BP Solar India (Rs. 1,692.80 crore), and Titan Energy System (Rs. 5,880.58 crore).

Then, late September, Vavasi Telegence (Rs. 39,000 crore), EPV Solar (Rs. 4,000 crore), and Lanco Solar (Rs. 12,938 crore), also announced major investments.

Now, given the quite ruthless kind of financial crisis the world is currently engulfed in, several have raised doubts whether solar players would be able to get the credit they need. Or, would they run into rough weather?

On paper, some of these companies are big corporate houses, with several years of standing. However, reality can be quite different, and can bite! I've yet to hear whether all of these companies have managed to raise the requisite capital. One sure wishes that they have all been busy and will be successful!

Otherwise, all one needs to look at is iSuppli's warning. According to iSuppli, 'Bringing an end to eight consecutive years of growth, global revenue for photovoltaic (PV), panels is expected to plunge by nearly 20 percent in 2009, as a massive oversupply causes prices to drop.'

Will it be a case of massive oversupply in India? We haven't exactly started. Hence, perhaps, we will come to deal with oversupply later. The key thing is to get all of these solar/PV projects off the ground!

The India Semiconductor Association (ISA), and now, SEMI India, have been promoting the solar/PV industry very aggressively. The work they've done so far has been commendable, and I've been witness to all of their activities. However, keep in mind that these are only industry associations, who can only advice, guide, debate and promote the industry, and also provide industry statistics for everyone to consume.

The real action can only happen once the proposals have been cleared by the Indian government and the players have managed to arrange for the requisite capital for their projects. The Indian fab story with SemIndia is all to familiar, and there should not be a repitition with solar/PV projects.

Therefore, the role of the government of India will be extremely critical and crucial. The good health of the Indian solar/PV industry is entirely in its hands, and not in the hands of the industry associations.

Perhaps, the Indian government could do well to look at how the Taiwan government is playing a critical role in reviving the hard hit DRAM industry and also at the German free state of Saxony, which has played a key role in financing the ailing Qimonda.

Otherwise, the Indian solar/PV industry could get hit, even before it takes off the ground! And, as a nation, we cannot afford that to happen!

India has so far has had a good story going in solar. There are hopes that solar/PV will trigger off a spate of manufacturing activities in India, besides creating lots of jobs. Don't think we can afford to spoil all of this!

The industry in India is still very much in its infancy. Let the baby play happily in the water (solar) tub, instead of throwing the water out! This baby needs a lot of hand-holding to get stronger in the years to come.

My blog is the world's best!

Wow! I am overwhelmed!

This morning, when I stepped into the office, I'd no clue what lay ahead. This blog had been recently nominated in Electronics Weekly.com's first ever Electronics Blog Awards 2008, under the Electronic Hardware category.

My blog was declared the winner in this category!.

Several friends and well wishers have requested me to post an image about the winner's announcement page, so here it is!All of the other bloggers in the list are equally worthy, and they are all winners. My heartiest congratulations to all of my fellow nominees. I haven't even met anyone of you, ever! Hope I can, some time soon.

I've always maintained that love writing (or blogging) about things that are close to my heart. Semicon and telecom are prime in that category, two topics that I am really very fond of.

My blog -- well, it all started as a regular affair. There are a whole lot of great bloggers out there, who also write on similar topics. I was and am just one among those. Nor was and am I ever looking for traffic, etc., as it is my contention that people will only stop by and read your blog post or article IF there's something of interest to them. So, I was my only reader ;) I thought!

I didn't even realize that so many people would be reading my blog posts. Well, things changed somewhere, I don't know how. Wish I could thank everyone personally!

Thanks, dear friends, for stopping by my blog occasionally. I just don't have words to express myself.

All I can say is a big thank you to Electronics Weekly for picking up my blog. Thanks to the person who nominated my blog, as I've no idea who nominated it. Thanks also to Google for creating the Blogspot platform so that people like me can blog. Many thanks to all of those friends, well wishers and readers who voted for me. Hope you all find my blog useful.

Dear friends and readers, please keep those suggestions coming so I can strive to improve myself even further over time.

P.S. A former colleague and close friend, Debashish Choudhury, has also added a link on Global SMT site. The link is given here. Thanks Debu for the honor! ;)

Cybermedia/CIOL, very kindly, posted a news release announcing my victory. Many thanks for to CIOL and Cybermedia.

Later, in the evening, Pradeep Gupta, CyberMedia's managing director, sent out an email to the entire company, announcing my win. Thanks a lot for this very nice and touching gesture, Sir.

Finally, Electronics Weekly sent a mail to me saying: "You were the clear winner in your category, so congratulations! If I may, I'll send you a 'Blog Awards, Winner' badge for your blog, to commemorate the victory!" Thanks to Electronics Weekly again!

Solar/PV is just right for India

There have been significant investments in the solar/photovoltaic space in India in the recent past, and that does not look like ending any time soon.

Given the ongoing global financial crisis, and the state of the global semiconductor industry, it appears that India has bet quite successfully on the solar/PV segment. In fact, it seems that solar/PV is just right for India! In fact, it may just kick off the kind manufacturing activity India really needs.

Poornima Shenoy, president, India Semiconductor Association (ISA), says that solar/PV is right for India for a variety of reasons.

Firstly, India has among the highest solar irradiance, globally. Secondly, it is established as a low-cost producer and assembler of solar PV cells and modules. And thirdly, India has among the best quality reserves of silica in the states of Orissa and Andhra Pradesh.

She adds: "At present, solar PV may not seem to be an attractive option, primarily due to high generation costs. However, in the coming years, with increases in fossil fuel prices, rising environmental concerns, and a reduction in the cost of solar PV technology, it is likely to become a major source of energy."

The ISA expects 2015 to be an important year for the solar/PV industry. Around this time, the product cost of the Indian solar PV industry is likely to match the semi grid parity (peak power) globally, and also to match the grid parity within India.

The four major segments offering maximum potential in the coming years for solar PV in India are: rural electrification -- decentralized distributed generation (DDG); grid interactive solar PV power plants; backup power for telecom (base transceiver stations); and roof-based solar PV systems.

ISA-NMCC report on solar/PV
The ISA recently released a report on the solar PV market in New Delhi with NMCC (National Manufacturing Competitiveness Council).

According to the ISA-NMCC study, of the US$71 billion invested in new, renewable energy capacity globally in 2007, 30 percent of was in solar PV. Solar PV is the fastest growing area in the energy sector, with a CAGR of 47 percent over the last five years. The grid-connected solar PV segment saw 50 percent growth in 2007.

As per the report, the solar PV industry is likely to grow four-fold by 2011. However, there are various uncertainties in the short- to medium-term on both the supply and the demand side.

On the supply side, the main constraint is the lack of available polysilicon. The demand side is limited by the quantum of incentives for solar PV.

Gradually, there will likely be improvements in technology. The decreasing cost of manufacturing could drive the preferential tariffs lower, and ongoing demand for PV products could also attract significant investment.

As for the global solar PV supply chain. Thin-film production is one of the fastest growing segments in solar. The lack of available polysilicon is limiting growth, and this has led to the emergence of thin-film technology. This technology has enjoyed substantial growth since 2005: 80 percent in 2006 and over 100 percent in 2007.

My blog's been nominated by Electronics Weekly!

It was indeed a pleasant surprise to receive an email from Electronics Weekly, yesterday evening, informing me that my blog was recently shortlisted/nominated in the 2008 ElectronicsWeekly.com Blog Awards by a reader of ElectronicsWeekly.com!

All of the nominated blogs have apparently been considered by the panel of judges at ElectronicsWeekly.com. The email said, "I am delighted to inform you that you have made the shortlist in the Best Electronics Hardware Blog category."

The entire list can be seen here!

Wow! I must add that here that there are such great blogs and bloggers in that list that I went dizzy for a few minutes!

I never expected my blog to reach this kind of appeal or level! Nor do I think I have that kind of traffic, as this blog has more to do with serious stuff, rather than talk about gadgets, etc. In fact, somebody once told me last year that no one would bother about a blog on semicon and electronics, nor would I get any traffic!

Well, all of this has never bothered me. I'm here to blog about what I feel is close to my heart! If folks happen to stop by, I am extremely grateful to all of them!

Irrespective of whether I win this award, it is just the right time to thank all of the readers of this blog! Thanks to all of you for choosing to stop by my blog occasionally! I sincerely hope you find the content interesting and appealing enough.

There's lots happening in the semiconductor, electronics and telecom industries, and hope that I am able to add my views on all of those in the coming months.

Thanks again, my dear readers. Please keep those suggestions coming. I will try to live up to your expectations. Have a great Halloween, everyone!

Top 20 global solar photovoltaic companies

Alright folks! This has taken some time coming, but it is worth the wait! Presenting the Top 20 solar photovoltaic companies during Q1-2008. May I add here that I am extremely grateful to iSuppli's Jon Cassell for giving me this opportunity.

I was also fortunate enough to discuss this table with Dr. Henning Wicht, Senior Director, Principal Analyst, iSuppli Deutschland GmbH, in Munich, Germany.

Parameters for rankings
First up, what were the parameters used by iSuppli to determine the top 20? According to Dr. Wicht, the top 20 cell-companies have been ranked by production in 2007 and by announced production capacity 2010. He clarified, "Ranking by revenue is not applicable because many integrated manufactures publish compound revenues for cells, modules and systems."

Yes, there have been several announcements in the solar/PV space, in India, and globally, and some names could be missing here. However, the new cell manufacturing projects will be included as soon as they are announced.

Coming back to the topic, it is necessary to examine the role of subsidies. While photovoltaics have been getting cheaper, Dr. Wicht said that subsidies were still necessary to support the PV markets. "It shows that the time grid parity shortens faster than expected earlier. As an example, for Germany, the grid parity might be achieved in 2015, which is two years earlier than expected in 2007."

That is to say, the support programs are benefical, both to support markets to become independent sustainable and to develop the regional industry.

Global interest in solar/PV
Critically, there seems to have developed a sudden interest in solar/PV, starting late 2007, when this (solar) has been around for some time. How has this happened?

According to Dr. Wicht, raising CO2 levels generated through fossil energy, CO2 certificates, rising prices of fossil fuels, political dependency from oil exporting countries drove the Kyoto protocol to reduce CO2.

"Renewable energy is a major pillar to achieve that goal. European governments have been frontrunners to implement and execute that goal. That said, solar has been around for a while. Japan was the first significant market. However, on a global basis, it took off in Europe from 2005 onward," he noted.

With the spate of initiatives in solar/PV, can it not turn out to be a case of too many folks entering the same line?

Sure, over and undersupply happens along the supply chain! The iSuppli market research figures out imbalances, which drive prices/margins up and down.

Also, isn't there a chance of solar/PV getting commoditized, or has it already become one? Well, PV modules are a commodity product, said the analyst. The market is still in its infancy and it will continue to grow for the next 10 years and further. The overall saturation will come, but still some years to go.

Is solar helping semicon?
Some industry folks have been saying that the solar/PV initiatives are not really helping the overall semicon industry, a statement I agree with as well. Also, it may only be benefitting some of the equipment makers.

Dr. Wicht said: "Indeed, semicon fabs are not able to produce competitively solar cells and the solar need for semiconductor devices is rather low. The semiconductor companies, however diversify into PV, e.g., Qimonda with a new cell production. Intel is investing in several PV companies, LG is investing in Conergy, etc., or supplying devices for power conversion, e.g, National Semiconductor. However, the overall impact on the semicon devices market is rather low!

Solar, semicon on par?
iSuppli made a forecast some time back regarding investments in solar and semiconductors being on par by 2010.

The investments for solar cell production raising up to several hundreds of Mio USD, up to 1 Bio $ per production site. That is coming close to a semiconductor fab. The total capex of semiconductor is still 10 times larger than PV. However, PV is rising much faster.

Solar, semi rocking in India; global semi recovery in 2010?

Wow! What a start for October! We have had a whole new range of activities going on! Fist, late September, the India Semiconductor Association organized a solar/PV conclave in New Delhi, where plans were laid out for India's roadmap in the solar/PV field. the ISA-NMCC (National Manufacturing Competitiveness Council) report on the Indian solar PV market was also released at the conclave.

According to Poornima Shenoy, president, ISA, the year 2015 could be important for this industry. She said, "Around this time, the product cost of the Indian solar PV industry is likely to match the semi grid parity (peak power) globally, and also to match the grid parity within India."

Next, AMD joined hands with Advanced Technology Investment Co. (ATIC) of Abu Dhabi to create "The Foundry Company", a leading-edge foundry production outfit. It will also join the IBM joint development alliance for silicon-on-insulator (SOI) and bulk silicon through 22nm generation. It will be very interesting to see how AMD now takes on Intel!

Messe Munchen put out a white paper on "How China, India and Eastern Europe are changing the global electronics market." This is not surprising at all! You can download the report by clicking on the link here, and I must say, the report is really engaging!

On the same lines, Gartner came up with its analysis that China is dominating the global semiconductor scene, and that both India and Vietnam are gaining! India's growing might in semicon is well documented! Also, last month, I had mentioned how the lack of a fab or the exit of a top professional from an Indian semicon firm would not hamper India's growing fortunes in this industry!

The trials and tribulations of the global semiconductor industry were already touched upon by Derek Lidow of iSuppli. Analysts such as Malcolm Penn of Future Horizons and those at Gartner have been saying similar things, more or less. Penn advises that this is the time to stop chasing fashion and get back to basics. He adds, "The good news being the industry basics are mercifully as good as they get back."

Gartner only expects a recovery for semiconductors sometime in 2010! According to Gartner, a collapse in memory spending, combined with a weak economy, is driving a major contraction in semiconductor capital equipment spending in 2008. The slowdown is likely to continue into 2009 before the industry recovers in 2010.

SEMI now has a presence in India. Sathya Prasad, formerly of Cadence, has been appointed as president of SEMI India with immediate effect. This is a further indication of India's growing leadership in the semicon space. I will be getting into a discussion with Sathya Prasad sometime later.

Of course, we have the usual stuff like companies selling off or retiring 200mm fabs. Examples are NXP, Hynix, Renesas, etc. Also, DRAM prices continue to be weak and suppliers could likely face a credit crunch.

Interesting mix of happenings, isn't it! While India rocks in solar and semicon, we are still speculating on a recovery for the global semiconductor industry. About time India took the lead in making that happen!

Finally, I was busy with Durga Puja, and hence, didn't blog in a while. Will try my best and make up for my absence. I would like to take this opportunity to wish SHUBHO BIJOYA to all of my Bengali and non-Bengali friends.

Building a good solar ecosystem in India

Solar/PV has been doing the rounds consistently, and has probably now become one of the most hyped sectors.

In fact, renewable energy has never ever had such a good time! As mentioned, a tremendous hype has already been built around solar photovoltaics. Several companies, in India, and elsewhere, have also jumped into the solar bandwagon.

So what are the reasons behind this 'sudden' interest in solar? According to Dr. Ashok Das, managing director, Solar Solutions, and a well know expert in this area, consumers do not yet drive the solar energy sector. Being energy, it is mostly driven by the government and its subsidies.

So, why has there been this 'sudden interest' in solar? There are two reasons.

First, the climate change issue started getting center stage at world forums, leading to policies and targets to cut global warming, and hence boosting renewable energy. Second, the soaring oil prices and continued dependence on a few countries for oil has led to the realization of the energy security.

There are several takeaways from the European experience with solar. Dr. Das says that Europe, particularly, has taken solar very seriously. They have been a leader in solar. "Germany, for instance, gave away all of the necessary subsidies to attain energy security. These subsidies have led to the solar boom. It has also led to an increased R&D to bring down the cost of solar energy."

Nevertheless, he adds there seems to be a bubble forming in this sector, like all other booms in the past. The industry will go through consolidation as the market matures.

And where does India stand in comparison? According to Dr. Das, steps are being taken to promote solar energy in India. "As of now, the feed-in tariff is Rs. 15 for photovoltaics and Rs. 12 for thermal solar. The government also announced a mandatory 5 percent renewable energy mix in the electricity production.

"The PMO (Prime Minister's Office) has also issued a National Action Plan that has plans for boosting solar. These subsidies are driving some of the increased activities in India."

He contends: "We need stronger lobbying so that better subsidies can come through. Therefore, most of the manufacturing activities in India are still driven by the export markets."

Surely, given the surge of investments in solar within India, there is every room for developing a very good ecosystem.

Dr. Das says: "Coming to the solar ecosystem, we already make solar products, as well as the modules. We also have the capability to make cells. The only part missing has been wafer, the silicon for solar.

"A few silicon factories should be coming up in India soon. So, India can easily establish the entire ecosystem for solar photovoltaics."

Postscript: More investments in solar today, in India. According to Hindu Business Line, there have been three additional investments worth Rs. 55,000 crores.

Vavasi Telegence to invest Rs 39,000 crore for solar PV and polysilicon unit; EPV Solar to invest Rs 4,000 crore for solar PV unit; and Lanco Solar to invest Rs 12,938-crore for solar PV and polysilicon unit.

A word of caution: It's advisable not to get carried away by all the success in solar. Solar is/was only part of the ecosystem units in the Indian semicon policy.

Don't forget semiconductors!

While this success in solar does augur well for the solar industry in India, don't think this is even close to what the Indian semicon policy, launched with fanfare last September, originally set out to achieve!

Synopsys' Dr Chi-Foon Chan on India, low power design and solar

There have been reports about the troubles within the EDA industry in recent times, especially those related with quarter sales. Interestingly, Synopsys has been the one sailing along fine! If that's not enough, it made its intention known of playing a role on the solar/PV segment, an area where lot of investments have been happening!

Given this scenario, I was fortuitous enough, rather, extremely lucky to be able to get into a conversation with Dr. Chi-Foon Chan, President and Chief Operating Officer, Synopsys Inc., during his recent visit to India.

On the state of the global semiconductor industry, he said, it was somewhere now in the low 10s [well below 10 percent]. The EDA industry is currently tracking below that level. However, Synopsys has been growing at around 10 percent. He said, "The technology challenges today are very high."

Synopsys has a substantial number of R&D population based out of India. Giving his assessment of the Indian semiconductor industry, Dr. Chan added: "Our main interest in India is largely talent and the academia. India can very well get more into the product development side. Even the outsourcing of designs have increased. Our capabilities, of the Indian team, have also increased."

As with any good semiconductor ecosystem, the Indian industry also needs a proactive industry association, a role played to near perfection by the ISA (India Semiconductor Association). Acknowledging the ISA's role, Dr. Chan said, "The ISA has also formed a very cohesive team."

There is little doubt about India's growing importance in technology strengths and managerial leadership. Dr. Chan added: "We are more on the high-end side and also track what others design. In India, the profiles of designs are definitely high-end in nature. This is largely due to the presence of a large number of MNCs. A very high percentage of designs are in the 45nm and 65nm process technology nodes."

There is another significant indicator of India's growing importance, and that is the huge rise in the attendance of the SNUG. In 2000, this event attracted 180 people. However, in 2008, the SNUG attracted over 2,000 people.

Moving India to next level
Given the very high level of commitment on Synopsys' part toward India, there was a need to find out from Dr. Chan what exactly India needs to do to move to the next level in the value chain in the semiconductor ecosystem.

He advised: "India can do two to three things. One, for the system to grow, you need the government, academia and industry to grow together. India has all of the ingredients required to drive products."

Comparing India with China, he highlighted the fact that while in China, the local consumption was higher than local supply, that was not the case with India!

"Therefore, looking at merely the local market is not the only thing. Products developed here can also be targeted at the Middle East and Southeast Asia." He was quite forthright in his analysis, adding: "Industries start when you find markets. The skill sets are already present here. There can well be multiple startups."

Dr. Chan also touched upon the fab vs. fabless issue, noting that there could well be more of fabless companies in India. "Building a fab requires lot of capital. Also, consolidation will continue to happen."

What role does Dr. Chan see Synopsys playing in the Indian context? He said: "Synopsys will continue to be a catalyst for the industry. A healthy design industry in India continues to help us. We also work well with the Indian universities. Having more people from the universities will always help. We also invest a lot in application support. The application team also trains others. I now look forward to seeing more fabless companies here and India to become even more global."

On low power design
India is also a centre of expertise in low power design, given that low power is hugely important in today's electronics ecosystem. Dr. Chan commented that low power has always been the number one design issue. It cannot be taken care of at one single stage.

He added: "A slightly new concept that has emerged is low-power verification. There are so many schemes for attacking low power, such as multiple voltage islands. We (Synopsys) are spending a lot of effort in low power.

"As a designer, you require detailed analysis. Low-power verification is now coming up. Another area is testing. As an example, if so much power is required, how do you have the power cut from the tool you are using to test? From a Synopsys point of view, we are involved in several points, such as front-end synthesis, testing, sign-off, verification, etc. We are trying to put in a whole lot of methodologies."

Synopsys in solar
EDA may be able to help by lowering power requirements and leakage on better products. Especially, the Synopsys' TCAD product can be used to create more efficient and effective solar cells. Now, this is not a new development anymore. Synopsys, along with Magma, have already made known their intentions about setting foot in the solar/PV space.

On the TCAD, Dr. Chan said: "We have a very strong position in the TCAD, commercially. Now, it is one of our most critical elements in high-performance. Our TCAD is among the strongest in the EDA industry.

"In solar, it does not have to be a complicated place-and-route, etc. From an entire solar industry point of view, we have now used some effort from TCAD into this space. Heat transfer issues, etc., are more in the EDA space."

I will continue my conversation with Synopsys on its solar initiative sometime later. Keep watching this space, folks

Magma's YieldManager could make solar 'rock'!

Make no mistake, folks! The EDA guys are getting their act together to penetrate the solar/PV segment!! Magma's YieldManager is a great example of that effort! Yes, we all know the troubles of the EDA industry as well as of the key players. However, let's not ignore this initiative from Magma!

Recently, Magma Design Automation Inc. announced the development of a new yield enhancement software system, the YieldManager software system, which is customized for solar fabs to improve conversion efficiency, increase yield and reduce the manufacturing costs of solar cells.

Magma is collaborating with Pegasus Semiconductor-Solar to refine the product specifications and test the new product, based on Magma's YieldManager.

This is an interesting development, especially from the point of view of the solar/PV industry! Even more significant is the entrance of the EDA community [the one being Synopsys] into solar/PV, a segment, which has witnessed a substantial amount of investments worldwide, and specifically, in India.

It was fun catching up with Ankush Oberai, VP, Failure Analysis Business Unit, Magma Design Automation, in Silicon Valley, to find out more about the YieldManager software system, what it can do for the solar/PV industry, and why Magma decided to venture into an 'unchartered territory'.

The first and most obvious thing, why YieldManager?

Ankush Oberoi says that in semiconductors, yield impacting parameters which are regularly monitored are mostly extrinsic, i.e., from outside, such as particles, over-exposure, under-exposure and miss-processing. In solar cells, the yield impacting parameters are mostly intrinsic, that is, something built into the solar cell material which can NOT be easily seen. Thus, a different "eye" is needed to see the solar parameters. The "eye" is the YieldManager here!!!

It would NOT be either inspection tools or litho optical proximity correction (OPC) detector. The solar cell efficiency is directly influenced by electro-physics of solar materials. A YieldManger is required to monitor any changes in those efficiency impacting parameters.

The most important parameter is the lifetime of current-generating carriers. As the solar energy generates the "hole-electron" pairs, they are collected separately as electricity.

If the solar material is "dirty" with many crystalline boundaries as in thin film solar cells, the solar generated hole-electrons get pulled into those crystalline boundaries and do not contribute to the electricity generation.

"Thus, if we can find a solar yield management system to detect the very subtle change in carrier lifetime, then we are at home with a greatest Home Run in solar cell business," he contends.

Given the EDA background, why did Magma decide on a yield management technology?

He adds that yield management technology was acquired by Magma as part of the Knights Technology acquisition in Nov 2006. Magma's Fab Business Unit (formerly, Knights Technology) is a pioneer (since 1994) in yield management for semiconductor technology.

The product is deployed and used in leading fabs around the world to help manage production wafer yield. Yield management has also been deployed for mask making and LCD productions.

It would be interesting to know how Magma's new product will allow solar fabs to better monitor all metrology, inspection and performance data throughout the manufacturing process.

Oberoi says: "For Si wafer solar cell, the most important parameter to monitor is the solar conversion efficiency impacting parameters. An example would be a carrier lifetime.

"If the carrier lifetime fluctuates more than normal, the solar Yield Manager will quickly examine all of the key data, i.e., metrology, inspection and performance data, to pinpoint out potential root-causes of the fluctuation problem."

For thin film solar cell, particles, laser cutting integrity and film thickness uniformity would be main things to monitor. Those data are quite similarly collected, as in semiconductors, and would be monitored as similar ways. The Solar Yield Manager would do well as proven in semiconductors in this case.

Next, it is important to find out how will the YieldManager enable fab operators to identify and correct root causes of solar-efficiency and yield degradation caused by subtle fab processing fluctuations or instability.

According to Oberoi, the carrier lifetime, which could be caused by various factors, is the most critical parameter to monitor for achieving and maintaining the good solar conversion efficiency.

He says: "As the Solar Yield Manager carefully monitors those factors, blindly committing ~400,000 wafers a day can be eliminated, when critical process instability starts appearing and persists. The solar conversion efficiency impacting factors could be monitored differently by different solar fabs."

Some fabs may not have capabilities to monitor those factors. The Solar Yield Manager would define those metrology and performance tool requirements, when released.

It is also interesting to learn how improving the energy conversion efficiency, reducing the manufacturing costs and increasing the yield of silicon wafer-based solar cells are critical to the growth of the solar market.

Currently, the Si wafer for solar cell costs $2~$2.5/watt due to the severe shortage of Si. The selling price of a solar cell is $3~$3.5/watt, that is, the material cost is 60~70 percent of the solar cell price.

No market or industry would prevail with the 60~70 percent material cost, adds Oberoi. Thus, every milli-watt squeezed out of a solar cell would be very critically important for proliferation of solar industry.

In order to increase the power output of a solar cell, the solar conversion efficiency must be maximized. Once maximized, sustaining the good solar efficiency is the name of the game in the solar cell manufacturing business.

The effective manufacturing cost will be drastically lowered, if bad solar cells with poor solar efficiency is minimally produced. That is, some fabs will use ~400,000 wafers a day to generate ~500 M-Watt a year, whereas some ~450,000 wafers to do the same with poorer solar efficiency.

Innovation in the solar fabrication process must be accelerated, and today, no other enterprise-wide yield enhancement software exists for solar fabs.

Oberoi says: "Solar cell is an old technology, but a very new industry, simply because not enough money was being invested. Now, money is pouring into the solar industry and products like solar Yield will start to appear. It is not known yet that anyone commercially has tried to develop a similar product."

Global estimate of solar/PV industry
There are several publications with recent estimates. The annual solar cell installation in the world: Germany ~46 percent, Japan ~23 percent, USA ~9 percent, Spain ~6 percent, Italy ~4 percent, the rest of Europe ~1 percent, the rest of Asia, including India and China ~6 percent, and the rest of world ~5 percent in 2006.

Magma is currently in the design and implementation stages of the product and plan to have version 1.0 of the product commercially available in Q1-09. The company has targeted solar fabs based in Asia that are eager for early implementation of the solar yield product.

Right then: those planning or having solar fabs! Now's the time to test that home run theory with the YieldManager.

What India brings to the table for semicon world! And, for Japan

This semicon blog's title has been inspired by some queries, largely from friends in Japan, who are looking at the Indian semiconductor market. The topic of great global (and Japanese) interest is: What does India bring to the table for the semicon world to go to India!

Interesting! The world has been keenly following the Indian semiconductor and fab policy, and can gather a lot of information off my blog itself! For those who'd like to know it all again in specifics, here we go again!

Indian semicon and fab policy
Around September last year, the Department of Information Technology, Ministry of Communication and IT, Government of India, came up with the Special Incentive Package Scheme (SIPS) to encourage investments for setting up semicon fabs, and other micro and nanotechnology manufacturing industries in India!

The "ecosystem units" have been clearly defined as units, other than a fab unit, for manufacture of semiconductors, displays, including LCDs, OLEDs, PDPs, any other emerging displays; storage devices; solar cells; photovoltaics; other advanced micro and nanotechnology products; and assembly and test of all the above products.

What has happened since?
Lots! Initially, there were two major proposals from HSMC and SemIndia for setting up wafer IC fabs. While those haven't really taken off yet, more investments have since happened in India.

Quite recently, the Indian semiconductor and fab policy attracted 12 major proposals, worth a whopping Rs. 93,000 crores! The Department of Information Technology (DIT), Government of India, has set up a panel of technical experts to evaluate these proposals.

Ten (10) of these proposals are for solar/PV. One is for a semiconductor wafer -- from Reliance Industries worth Rs. 18,521 crores, and another for TFT LCD flat panels -- from Videocon Industries, worth Rs. 8,000 crores.

The 10 proposals for solar/PV are from: KSK Surya (Rs. 3,211 crores), Lanco Solar (Rs. 12,938 crores), PV Technologies India (Rs. 6,000 crores), Phoenix Solar India (Rs. 1,200 crores), Reliance Industries (Rs. 11,631 crores), Signet Solar Inc. (Rs. 9,672 crores), Solar Semiconductor (Rs. 11,821 crores), TF Solar Power (Rs. 2,348 crores), Tata BP Solar India (Rs. 1,692.80 crores), and Titan Energy System (Rs. 5,880.58 crores). This is as far the latest developments are concerned!

Solar fabs have also been announced earlier by leading firms such as Videocon, Reliance and Moser Baer, etc. (Two of them are figuring here again!) There are also talks about developing solar farms in India, which is good.

What are India's strengths?
The clear strengths of the Indian semiconductor industry are embedded and design services! We are NOT YET into product development, but one sincerely hopes that it gathers pace.

The market drivers in India are mobile phone services, IT services/BPO, automobiles and IT hardware. India is also very strong in design tools, system architecture and VLSI design, has quite strong IP protection laws, and is reasonably strong in concept/innovation in semiconductors.

Testing and packaging are in a nascent stage. India will certainly have more of ATMP facilities. Nearly every single semicon giant has an India presence! That should indicate the amount of interest the outside world has on India. In fact, I am told, some key decisions are now made out of the Bangalore based outfits!

Electronics manufacturing
In the electronics manufacturing domain, India's strength lies in hardware, embedded software and industrial design, OEMs, component distribution (includes semiconductor and box build), and end user/distribution channel, as well as more than moderate strength in product design and manufacturing (ODM, EMS).

India is likely to witness $363 billion of equipment consumption and $155 billion of domestic production by 2015. India's electronic equipment consumption in 2005 was 1.8 percent. It is likely to grow to 5.5 percent in 2010 and 11 percent in 2015, as per a joint study conducted by the ISA and Frost & Sullivan.

The Indian semiconductor TAM (total available market) revenue is likely to grow by 2.5 times while the TM (total market) is likely to double revenues in 2009. The TAM is likely to grow at a CAGR of 35.8 percent and the TM is likely to grow at a CAGR of 26.7 percent, respectively, during the period 2006-09.

Telecom, and IT and office automation are the leading segments in TM and TAM. Consumer segment occupies the third fastest growing area in the TM, and the industrial segment is the third fastest growing area in the TAM.

The major semiconductor categories of interest include microprocessors, analog, memory, discretes and ASICs, while the major end use products include mobile handsets, BTS, desktops, notebooks, set-top boxes and CRT TVs.

India, the embedded superstar!
India's embedded design industry has been going from strength to strength. An IDC-ISA report forecasts the revenues from India's VLSI, board design and embedded software industry to grow to $10.96bn by 2010 from the current $6.08bn in 2007.

India is also focusing on moving up the semiconductor value chain. It is emphasizing on end-to-end product development, investing in IP development, developing India specific products, and partnering with OEMs to understand the market needs. Also, be aware that several leading EMS firms are present in India as well.

What should investors do?
Certainly, invest in India! The Indian semicon policy clearly defines the "ecosystem units." Global manufacturers of displays, including LCDs, OLEDs, PDPs, any other emerging displays; storage devices; including SSDs, solar cells; photovoltaics; other advanced micro and nanotechnology products, should certainly look at investing in India, and consider manufacturing here!

Lots of solar fabs are likely to come up, so there will be a great demand for solar related equipment, chemicals, testing, etc. We hope that one wafer IC fab comes up as well, so there will be opportunity for semicon equipment manufacturers. However, do be prepared to wait as things may not move as fast as some may expect.

There is lot of opportunity for fabless companies and in ATMP as well. There are several Indian firms, small ones, who may be interested in partnering. Some trading companies may find India of interest, especially in the solar/PV and ATMP segments.

Keep an eye on the IT/semicon policies some states, especially, Karnataka have in store. A host of opportunities could become available, once Karnataka comes up with a policy. More states may follow suit!

Well, do contact me in case you need further assistance.

Japan semicon firms seek close ties with India

The India Semiconductor Association (ISA) recently organized the India-Fukuoka (Japan) IT, Embedded Software and Semiconductor Business Workshop 2008. A host of companies and institues from Fukuoka, Japan participated in the workshop seeking partnerships, alliances, and business in the semiconductor space in India.

My first impression was that all of the Japanese firms present at the workshop are quite interested in the Indian semiconductor market, and especially in the embedded space. Besides, some of them may look at investments, should the opportunity arise. Some of the participants are also looking at the direction fabs are taking in India, besides the solar/PV market.

The participating companies and institutes at the workshop were:

1. Daichi Institution Industry Co. Ltd
2. DISCO (Dai Ichi Seitosho Co. Ltd) Corp.
3. Fukuoka University
4. Fukuoka Industry, Science & Technology Foundation
5. Inoueki Co. Ltd
6. Invest Japan
7. JETRO (Japan External Trade Organization)
8. Kyushu Economic Research Center
9. CLAIR (The Japan Council of Local Authorities for International Relations), Singapore

Masane Saito, Chief, JETRO, said that the total trade between India and Japan was worth $9.9 billion during 2007, a 25 percent growth. India's strengths included knowledge-based services, high-quality talent, etc. He added that Japan required a lot of embedded systems engineers, perhaps, hinting at Indian engineers and the opportunity that lies ahead of them.

Todd Takaki, Director, Inoueki, clearly highlighted that his company was looking at the manufacturing segment in India. A semiconductor trading company, it delivers chemicals to IC fabs, among others. He added that companies from Japan needed to see the inroads being made in India, both frontend and backend. While Inoueki is also looking at making investments in the country, Takaki stressed the need to have a developed market.

Akihiro Kawaguchi, International Science Technology Co-ordinator, Fukuoka Industry, Science & Technology (IST) Foundation, highlighted the Fukuoka Cluster for advanced system LSI design and development. He also touched upon the Silicon Sea Belt Fukuoka Project, which streches from China, covering South Korea, Japan, Taiwan, Hong Kong, Singapore, Malaysia, right up to Bangalore, India. This belt has the potential of the world's largest semiconductor market (60 percent), emerging car industry market, ever-developing wireless market, and the world's largest population of engineers.

The Fukuoka IST is also part of the Knowledge Cluster Initiative, a national program carried out by Japan's Ministry of Education, Culture, Sports, Science and Technology (MEXT), in co-operation with the local governments.

Dr. Hajime Tomokage, professor, Fukuoka University, touched upon the semiconductor business network via the MAP (microelectronics assembling and packaging) and RTS (reverse trade show) programs.

The Kyushu silicon island has a 6 percent share of the global IC production with over 20 percent raw wafers. SUMCO has four fabs in Kyushu. The silicon island also has 16 fabs, including those of Renesas, Toshiba, Sony, NEC, Yamaha, etc. Overall, it is home to nearly 650 semicon related companies. Kyushu is now looking for Asian customers, and specifically, from India.

Some other features include the national project on SiP (system-in-a-package) and MEMS, which have been place since 2002, as well as the SiPOS (System Integration Platform Organization Standards) platform.

Keiji Honjo, Leader, Product Innovation Sales Group, DISCO Corp., touched about his firm's business. DISCO's activities revolve on: manufacture and sale of precision cutting, grinding and polishing machines; maintenance of precision cutting, grinding and polishing machines; training in the operation and maintenance of precision cutting, grinding and polishing machines; disassembly and recycling of precision cutting, grinding and polishing machines; lease of precision cutting, grinding and polishing machines, and sale of used machines; manufacture and sale of precision diamond abrasive tools; and for-fee processing. It is also seeking business interests in India.

Yutaka Akagawa, Executive Director, Daichi Institution Industry Co. Ltd, said the company is also into 8Gen LCD business. It transfers the glass substrate for the LCDs. The company highlighted Clifter, a device, which carries the wafer cassette, LCD cassette, and so on, vertically, with the holding cleanliness to the clean room on the up-down floor.

Interested Indian companies desirous of tying up with these Japanese companies are welcome to send in their queries.

In my next blog, I will discuss specifically what India brings to the table for the semicon world to go to India, and especially, Japanese companies, since we are on Japan! This is also a request from a friend from the Far East!! I may be a bit inaccurate in my assessment, but I will try my best.

Xilinx on microprocessor trends, solar/PV

This semicon blog will basically examine the key trends in microprocessors, as well as whether companies such as Xilinx -- a key player in FPGAs -- has any kind of role to play in the solar/PV domain.

For the record, this is the concluding part of the discussion with Vincent Ratford, Senior Vice President, Solutions Development Group, Xilinx.

First, on to solar/PV! We have been reading and hearing a lot about the rapid advances being made in solar/PV. With so much investments in solar/PV happening globally, is there a role for Xilinx to play in this segment?

Ratford said: "Perhaps! Our devices are great for prototyping new ideas and often find their way into new markets. In base stations, our devices are used to reduce the power up to 50 percent. In signal processing applications, we have a decided performance/power advantage vs. discrete signal processors. Many of these 'Green' applications require some form of signal and embedded processing." Interesting, and this point needs some further examination!

Another area of main concern within the global semiconductor industry is low-power design. According to Ratford, there are a variety of ways to save system power.

He added: "We are designing features in our new products that will reduce active and standby power. We also have power-estimation and optimization tools. I would say, there is a lot more to be done in this area at all levels, software, IP and silicon."

Ratford was however, tight-lipped about Xilinx's product roadmap beyond the Virtex V. Obviously, we need to remain very tuned toward this!

Key microprocessor trends
Now this is another interesting area. A few weeks ago, I had received a great article from TI, which mentioned about five key microprocessor trends today.

Microprocessors have always been among the key areas of interest for semiconductor design and development. On being quizzed on what could be the five major trends for microprocessors, Xilinx's Ratford said: "For our embedded customers it is:

* Rising adoption of Linux.
* Increasing use of multi-core and some multi-processing.
* Accelerating trend to increase the connectivity, bandwidth and reduce the latency between the processor and the FPGA.
* Improve the OOBE (Out of the Box Experience) for non-FPGA developers.
* Reduce power.

Before signing off, my thoughts also veered toward LTE and TD-SCDMA, one 4G and the other, a 3G technology. Both these technologies have been very much in the news lately, especially, TD-SCDMA, which is currently in use at the Beijing Olympics.

As expected, Xilinx has also forayed into both LTE and TD-SCDMA spaces!

Ratford said: "Yes, we have complete reference designs for LTE and TD-SCDMA and have secured most of the prototype sockets for these air interface standards with Virtex-5. We have a very strong IP portfolio for the radio shelf and baseband and our Sytem Generator and AccelDSP tools are used extensively."

Indian fab policy gets 12 proposals; solar dominates

Just about 10 odd days ago, I had blogged about building-integrated photovoltaics (BIPV)! I had also mentioned how solar/PV will be the next big story in India, with BIPV right up there at the very top!

Well, according to a published report on India Infoline, the Indian semiconductor and fab policy has attracted 12 major proposals, worth a whopping Rs. 93,000 crores!

A Press Information Bureau (PIB) release says that the Department of Information Technology (DIT), Government of India, has set up a panel of technical experts to evaluate the proposals.

The promoters will come up to the Appraisal Committee for sanction of subsidy under the scheme once they have reached the threshold limit of investment, as indicated in the guidelines of the Special Incentive Package Scheme.

A majority of these proposals -- ten (10) -- are for solar/PV. One proposal is for a semiconductor wafer -- from Reliance Industries worth Rs. 18,521 crores, and another for TFT LCD flat panels -- from Videocon Industries, worth Rs. 8,000 crores.

The 10 proposals for solar/PV are from: KSK Surya (Rs. 3,211 crores), Lanco Solar (Rs. 12,938 crores), PV Technologies India (Rs. 6,000 crores), Phoenix Solar India (Rs. 1,200 crores), Reliance Industries (Rs. 11,631 crores), Signet Solar Inc. (Rs. 9,672 crores), Solar Semiconductor (Rs. 11,821 crores), TF Solar Power (Rs. 2,348 crores), Tata BP Solar India (Rs. 1,692.80 crores), and Titan Energy System (Rs. 5,880.58 crores).

Does the Indian solar/PV story now start making some sense? It is very much in line to become the next big success story for India after the Indian telecom story!

Evidently, Reliance Industries is the major player in all of this, having proposed both a semicon wafer fab as well as a solar/PV fab. Lanco Solar, Solar Semiconductor, Signet Solar, Videocon, and PV Technologies are some of the other big players proposing to enter the Indian semiconductor/fab space.

Well, this is really great news for the Indian semiconductor industry! Further, it comes close on the heels of the announcement of the 3G spectrum policy and MNP policy by the government of India.

A few weeks ago, Dr. Madhusudan V. Atre, president, Applied Materials India, had mentioned that taking the solar/PV route was perhaps, a practical route for India to enter manufacturing. How true are those words!

Late June, I too had proposed, among others points, that Karnataka (and other Indian states) look at having some solar/PV fabs.

Dr. Pradip K. Dutta, Corporate Vice President & Managing Director, Synopsys (India) Pvt Ltd had also mentioned late June that it was too early to write off the Indian fab story. We now have the answer to that question of having fabs in India!

All of this should also excite those investors looking to enter India. The huge interest and subsequent proposals for solar/PV can also lead to India having some of its own solar farms as well!

The India Semiconductor Association should be congratulated for having made this happen. It is soon going to a year since the Indian government had announced the semiconductor policy. Now, with these mega proposals in place, maybe, we will see more investors in the Indian semicon and solar/PV fab spaces.

Top 10 Indian semicon companies review
Another interesting thought! Last year, around this time, I had prepared a list of the Top 10 Indian semiconductor companies. This particular blog has been among the most accessed.

Perhaps, a review is in order! Besides, several Indian players are beginning to make a mark, like Cosmic Circuits, SemIndia, etc. The list of August 2007 mostly had Indian design services companies. This feature of Indian design services companies dominating a top 10 list will probably continue for some more time, till all of these proposals bear fruit into concrete, productive fabs.

I am sure, with those mega investments coming into the Indian semicon wafer IC fab and solar/PV fabs, most of the companies would soon figure in any top 10 list!

Surely, 2009 should be quite exciting as all of this means a very positive future and outlook for the Indian semiconductor industry.

Karnataka semicon policy very soon!

The government of Karnataka will be announcing a semiconductor policy very soon, according to Katta Subramanya Naidu, the minister for Excise, Information, BWWB, IT and BT, government of Karnataka, while delivering the opening address at the ISA Excite organized by the India Semiconductor Association.

Over the last several years, India has been a destination favored by almost all leading global semiconductor companies for setting up their development centers for semiconductors and embedded designs.

The size of the Indian semicon design industry is currently $6 billion across VLSI and board design, and embedded software, with the potential to be around $9 billion by 2009. There are nearly 200 companies and it employs over 130,000 professionals, all over India, with the potential to employ over 180,000 by 2009. The Indian semicon design industry has a CAGR of nearly 22 percent versus the global average of 7-8 percent.

Nearly 90 percent of the VLSI design work is done out of Bangalore alone. Appropriately, the ISA is headquartered in Bangalore, the heart of India's chip industry. The minister said: "The conducive work environment policies and high-quality talent are the important attractions for both MNCs and Indian companies to set up shop here. We value the contribution of our technology leaders and engineers to build the economy of the state and make it a global leader. Bangalore is next only to Silicon Valley, California, in terms of the work done here."

New centers likely
In future, the government of Karnataka wants to look at Mysore, Mangalore and Hubli as important centers to be developed. "These are centers of education with high quality and quantity of engineering talent. Our government is working on improving the connectivity to these cities to help attract investment there, as well as the expansion of companies from Bangalore to other towns within Karnataka," he added.

Welcome the ISA initiative to launch Excite, a program for the semiconductor and ecosystem companies, he noted that it was a good platform to understand the technology trends and to collaborate with the right partner.

He said: "Karnataka today is at the crossroads. We have the direction and leadership of Hon'ble chief minister Yeddyruppa. He is extremely committed to the cause of making Karnataka as the most preferred destination for the semiconductor industry and electronics hardware manufacturing. My (BJP) government would be glad to extend any support for your business plans in the state."

Semicon policy soon
The state government plans to announce a semiconductor policy in the very near future, actually. It has also earmarked land for a hardware technology park near the new airport (in Devanahalli).

The government is also thinking in the lines of finishing schools in PPP mode as the semiconductor industry is technology driven, and demands continuous training and re-skilling of the workforce.

Initiatives in Karnataka
The minister pointed out that his government has been taking several pro-active steps for further accelerating the growth of these sectors, as well as for their expansion in tier II and III cities. For these two sectors, the government proposes to identify and set apart exclusive IT/BT zones in Mysore, Mangalore, Hubli-Dharwad, Belgaum, Shimoga and Gulbarga.

Yeddyruppa, the state chief minister, has made an announcement of a number of initiatives to boost the growth and development of IT/BT. A bio-IT park on a 100-acre plot is proposed to be developed with private participation near Bangalore. IT parks, with private participation, would be set up in tier II and III cities. A massive IT city on the lines of the Electronics City near Bangalore is under consideration. Similarly, BT parks are proposed to be set up in Mangalore, Dharwad and Bidar. KEONICS, a government of Karnataka undertaking, will play a major role in development of the IT city, IT parks and computer literacy campaigns.

He added that the state government believes in formulating initiatives and policies in consultation with the industry. The existing Mahithi IT policy is also being revised with inputs from the Vision Group on IT headed by N.R. Narayana Murthy of Infosys.

"The state government would be happy to see IT and BT developments happening in tier II and III cities. We are taking steps to improve and upgrade the infrastructure in these cities. The CM is personally reviewing the construction and upgradation of airports in Mysore, Shimoga and Gulbarga, which will provide vital air connectivity, essential for the growth of industry and business," he noted.

The NASSCOM-Kearney report has identified 43 potential locations in the country for IT development. The report also suggests measures to be taken to make these locations attractive for IT investments. Recommendations, such as improving the quality of education, imparting employable skills to the uneducated youth, improving infrastructure, particularly, air connectivity, etc., would be taken into consideration.

The minister said: "Our government would take all the necessary steps to ensure that there is no flight of investment to other states, and to make Karnataka the most attractive region for IT/BT investments. We want the semiconductor industry to grow and flourish in the state."

Participative semicon policy likely
Elaborating on the proposed semiconductor policy for Karnataka, Ashok Kumar C. Manoli, principal secretary to the government, said: "When you look at India, it is software, and when you look at China, it is hardware. We should make a beginning and try and become the global capital for both hardware and software. We need to design such a policy that design activities continue and also facilitate manufacturing."

He added: "We will come up with a very participative semiconductor policy. It will also look at addressing infrastructure requirements for manufacturing setups." According to him, the hardware industry is the foundation for the entire revolution, which the government is looking at. He requested all companies present at the ISA Excite to participate at the forthcoming BangaloreIT.com event, and added that the state government was committed and fully geared up to deliver.

Announcing the ISA Excite initiative, Sanjeev Keskar, country sales manager, Freescale Semiconductor India Pvt Ltd, said: "We need to collaborate with the right partner. The ISA felt the need to arrange an ecosystem meet. Telecom and healthcare are the two drivers of importance." The ISA has plans to take Excite to other cities too, possibly, New Delhi, focusing on industrial and consumer.

The one-day ISA Excite event had an exhibition running simultaneously, featuring about 40 companies. These included ARM, Farnell, Ittiam Systems, Broadcom, Cosmic Circuits, Windriver, Wipro, HCL, AMDL, LSI Logic, TI, NXP, Cisco, Synopsys, SemIndia, Freescale, Open Silicon, MindTree, AMD, Analog Devices, RFMD, Cir-Q-Tech, NewEra, STPI, etc.

Get ready for building integrated photovoltaics (BIPV)

Building integrated photovoltaics or BIPV! Hey folks, prepare yourself to hear more about this term and the technology for quite some time to come! Solar/PV will be the next big story in India, and BIPV should be right up there at the top!

While BIPV is not yet talked about a lot in India, though, it may surprise many that there has been a deployment in India, I am sure that BIPV will be doing the rounds very soon.

There's another interesting angle to the BIPV, rather, solar story. Can EDA play a role here? I will examine this angle some time later.

First, what is BIPV? According to PV Resources, BIPV is merely photovoltaic systems integrated with an object's building phase. They are built/constructed along with an object, or planned together with the object. Yet, they could be built later on.

The following BIPV systems are said to be recognized:

* Facade or roof systems added after the building was built.
* Facade integrated photovoltaic systems built along with an object.
* Roof-integrated photovoltaic systems built along with an object.
* "Shadow-Voltaic" - PV systems also used as shadowing systems, built along with an object or added later.

If there are more, kindly share the information with me!

Now, to India. Just recently, Dr. Madhu Atre, president, Applied Materials India, referred to the use of BIPV during a discussion. He said that for energy-efficient glass, you could save on AC costs, etc., by using building integrated photovoltaics (BIPV). I hope we take serious note of what Dr. Atre said!

Didn't they say green IT was the most used and abused term? We really love talking so much about green IT. Well, here's an outstanding example, and actually, an example very few have really bothered to look at, so far, at least.

Staying with India, very few know that SunTechnics India, a brand of Conergy Group, a leading supplier of solar system integration, completed the design and installation of India's first green housing project facilitated with building-integrated solar power.

The 58 kilowatt project was developed in partnership with the West Bengal Renewable Energy Development Agency (WBREDA) as an initiative in solar architecture for the Rabi Rashmi Abasan eco-friendly housing complex at New Town Kolkata, of all places! Power will be fed into the public grid and facilitate electricity needs for 25 residential buildings and a community center.

If anyone has any doubts about the scope and power of solar or BIPV, take a look at Nanomarkets' report, which predicts that the market for BIPV will reach over $4.0 billion in revenues by 2013 and surpass $8 billion in 2015.

Late last month, I had written about certain steps Karnataka and the other states could adopt as part of a semicon policy.

Do include BIPV in your plans!

Actually, BIPV is very much part of the Indian semicon policy as well. West Bengal is probably the first state to have successfully implemented BIPV in a project. Congratulations are due!

Practical to take solar/PV route: Dr. Atre, Applied

Solar/PV is perhaps, a practical route for India to enter manufacturing, contends Dr. Madhusudan V. Atre, president, Applied Materials India. Alternatively, another way to enter this field could be by having solar farms.

According to Dr. Atre, India has a strong potential for manufacturing. The Indian scenario has the talent pool and an emerging middle class, along with the presence of system design and chip design companies. Only a fab seems to be the missing piece from this ecosystem!

Benefits of a fab include: fuels economic productivity, contributes to GDP and adds to national growth, creates jobs, helps set up the other expertise necessary for an ecosystem, and closes the loop between market, design, manufacture, test, customer.

Indian fab scenario
Commenting on the Indian scenario, Dr. Atre, says: "For PV, about $200-500mn is needed for a fab. If we can enter into manufacturing via the solar/PV route, the scale of investment required would be much less [than the investment needed for a wafer IC fab]. This can be practical route to enter manufacturing in India, and less complexity is involved, as compared to an IC fab." Another way of entering manufacturing is by having solar farms.

Applied's external face in India involves: Take leadership role in industry bodies; work with the government on various semiconductor and manufacturing policies; look for potential investments in start-ups; work with the academia on collaborative research in nanomanufacturing; be sponsors in key conferences; drive corporate social responsibility programs; and help enable semiconductor and solar manufacturing in India.

Touching on some emerging areas of interest, Dr. Atre highlights that packaging is very important in semiconductors. "We may look at some company in packaging R&D. We have invested a bit in Tessolve," he says. "We would also like to see the success of the nanotech lab in IIT-Mumbai, and see how it can help India." On a global scale, he notes that Applied would be setting up two-three SunFab lines with Masdar in Abu Dhabi, UAE.

Applied Materials in India
Headquartered in Bangalore, Applied has been present in the country for over five years. It has approximately 1,500 employees and associates. A liaison office was originally set up in May 2002. Applied Materials India Pvt Ltd (AMIPL) was set up in July 2003, and operations started in November 2003 with cost + model. It consolidated all Applied operations in Bangalore into ITPL (~92,000sqft). It also merged Brooks Chennai (~100RFTs) into Applied India operations. Applied currently has R&D centers in Bangalore and Chennai.

Next, Applied established site operations in Delhi (~5000 sqft) to support Moser Baer. Its key partners are Satyam, Wipro and TCS, on various aspects of engineering and software services. In Delhi, Applied has 25-30 people to support Moser Baer, where it has the first SunFab line up and running.

In Mumbai, it has set up a nanomanufacturing lab with IIT-Mumbai. "We have put in equipment worth $7-8 million there, and do R&D projects," adds Dr. Atre. The nano lab at IIT-Mumbai was inaugurated in November 2007 by Mike Splinter, president and CEO, Applied Materials.

Applied is also involved in the potential upgrade of SCL. "We are working with some other companies on how we can upgrade SCL. We are more at the backend to set up some capabilities," he says.

Applied Ventures makes investment in emerging technologies and companies. It has funded a couple of companies in the semi start-up stage. Applied Ventures looks at global investments.

Moser Baer is Applied's first customer in India. It has a 35-40MW assembly line. This is the first time that 5+m2 solar panels will be coming out. The panel will now have to be taken up to the production ramp. Dr. Atre adds that Europe was much advanced in solar/PV. Germany, especially, was far advanced in the implementation aspect, as well as Italy and Spain.

Nanomanufacturing simplified
Nannomanufacturing, as per Wikipedia, is "the near-term industrial-scale manufacture of nanotechnology-based objects, with emphasis on low cost and reliability." To manufacture at this level requires a lot of expertise, skills, etc., says Dr. Atre. Cost is definitely an important driver, and so is reliability, he adds. According to him, nanomanufacturing technology combines the two core strengths of Applied: nano + manufacturing.

Applied's vision has been to apply nanomanufacturing technology to improve the way people live. Its mission: To lead the Nanomanufacturing technology revolution with innovations that transform markets, create opportunities, and offer a cleaner, brighter future to people around the world.

Applied Materials is a global leader in nanomanufacturing technology solutions with a broad portfolio of innovative equipment, service and software products for fabrication of: semiconductor chips, flat panel displays (using TFTs), solar photovoltaic cells and modules (in crystalline and thin film vectors), flexible electronics, and energy efficient glass (BIPV). The last three categories fall under EE or the Environment and Energy Division.

Dr. Atre says: "We have the SunFab line for solar/PV. In flexible electronics, as an example, you can have solar cells wrapped around an object." As for energy-efficient glass, you can save on AC costs, etc., by using building integrated photovoltaics.

Core capabilities
Applied's core capabilities include: commercialize sophisticated systems and thin-film engineering, besides a global culture. "Our technological strengths include semiconductors, solar/PV cells and FPDs. We have nanomanufacturing technology as the common theme." Touching on the loss per watt, he says it is currently around $14, which needs to come down to at least $2 or one-fourth.

Applied makes systems used to produce virtually every new microchip in the world, taking care of thermal, etching, inspection, PVD, CVD and CMP. For LCD flat panel display systems, Applied offers a variety of systems, such as PECVD systems, e-beam array testers, PVD systems and color filter sputtering systems.

The processing panels can be up to 2.2x2.5 meters. For solar manufacturing, Applied offers crystalline silicon, flexible PV and thin-film line, or the Applied SunFab lines. For architectural glass and flexible electronics, it offers both glass and Web coating systems.

"We have three key businesses, silicon systems, displays and energy and environmental solutions," said Dr. Atre. These are supported by Applied Global Services.

Applied's goals for 2010 include: Expanded revenue streams, to become a $13-15 billion company; increased operating efficiency, with margins >25 percent, and increased cash flow, about >20 percent of revenue.