Chip designers in great demand

Bengaluru: INDIAN engineering services firms are witnessing good demand from chip designing segment as global semiconductor firms, cellular and electronics majors are ramping up capacity.

Currently, most industries including automotive firms, cellular and electronics industry, gaming technology sector are reeling under severe shortage of semiconductors seen globally.

To bridge the gap, many countries including the US, Japan, South Korea, and several European nations are ramping up existing capacity or building new fabrication units. Such ramp up is leading to high demand for chip designing companies. In India, engineering services firms with chip design expertise are seeing more demand. "At L&T Technology Services, we are well-placed to cater to the rising demand in the segment (chip design) over the next five years.

We have made key acquisitions in the semiconductor space to enhance our global offerings and capabilities in the complete VLSI chip design and embedded software. These acquisitions will act as a force multiplier for LTTS in times to come," said Giri KK, Global Head of Telecom and Hi-Tech at L&T Technology Services (LTTS).

Despite the semiconductor shortage, various industries including manufacturing players are undertaking their research and development (R&D) work that is driving demand for the chip designers. "The pandemic has left players with no choice but to reimagine themselves relevant for the new normal world and earlier perceived technology spend are now looked upon as investment strategies. Demand for digital engineering services and new-age solutions such as electric vehicles, autonomous vehicles, IoT (internet of things), AR/VR (augmented reality/ virtual reality), connected ecosystem, medical devices, 5G with embedded systems are on the rise.

Since late last year, the world is facing severe shortage of microchips due to sudden demand surge for tablets, personal computers and mobile phones amid widespread work-from-home operating model. Due to this shortage, many user industries such as automotive firms, cellular and electronics industry in India are looking at disruption in production schedule.

India is a net importer of semiconductor with minimal manufacturing base in the country. In 2019, the country imported around $10 billion worth chips from other countries, out of which 70 per cent was sourced from China.