India is at the cutting edge of chip design. But how Indian is it?
On 16 September, British semiconductor design firm ARM opened a new engineering office in Bengaluru, where it will design 2-nanometre semiconductor chips. A day later, Japanese chip design firm Renesas Electronics said it is in the process of validating 3nm chips that it has been designing in India since May. But while Indian engineers are at the forefront of this work, a crucial question remains: who owns the patents? The answer is not straightforward, and it highlights a key issue for India—the distinction between being a talent hub and becoming a true powerhouse with intellectual property (IP) ownership. Mint explains why.
Why are ARM and Renesas designing chips in India?
ARM specializes in designing the cores of an integrated system-on-a-chip—a semiconductor platform that powers most electronics devices and components today. In fact, it has a global monopoly in supplying cores for mobile processors—no one but ARM makes them. Renesas told Mint in May that it is designing 3nm chips for automotive platforms. While ARM plans to employ nearly 2,000 people, Renesas hopes to scale up to 1,000 engineers by the end of this calendar year.
Every year, over 1.5 million engineers graduate in India, which has emerged as a talent hub in chip design. Chip design does not need multi-billion-dollar investments in advanced machinery and pure silicon supply chains. While the latter does help, multiple companies have housed engineers in India, driven by cost advantages and the government’s design-linked incentives.
With India hosting 20% of the world’s chip designers—behind China (28%) and the US (32%)—it is natural that India plays a key part in the sector.
What’s more influential – chip design or fabrication plants (fabs)?
Both are equally important. In 2016, the US suspended Huawei from accessing its tech patents amid reports of espionage by the Chinese electronics firm. Despite China having its own chip fabs, Huawei’s fortunes fell, showing how powerful chip design firms, including fabless chipmakers such as AMD and Nvidia, can dominate a market.
In a world of sanctions and tariffs, chip design has become even more powerful. With the US being increasingly guarded, India having its own chip design capabilities can reduce dependencies on foreign entities for fundamental products. This also includes regular essentials such as switches, fans, household appliances and more. Taking this into account, chip design is undoubtedly a more influential capability to have—than just a fab.
Have cutting-edge chips been designed in India before?
Yes. Google has used its India engineering team to contribute to its global chipset designs in the past. Others include NXP Semiconductors and Qualcomm, alongside ARM and Renesas now. In May, Union IT minister Ashwini Vaishnaw said that while Indian engineers, sitting in Indian facilities, have designed 5nm and 7nm chips before, this would be “the first time that a 3nm chip would be designed out of India.”
Are these chips really Indian?
The answer is not straightforward. Vaishnaw, speaking after unveiling Renesas engineering office in Noida this May, said there will be domestic value generation from foreign clients. Malini Narayanamoorthi, India head of Renesas, had added that while the company operates through joint-venture agreements globally, the core intellectual property of a chip design generated out of a country is owned by the Japanese parent firm. Vaishnaw, too, had not affirmed what kind of boost India will get to its semiconductor gross domestic product (GDP), due to engineers designing chips for foreign firms from India.
The same holds true for ARM as well. The patents of ARM’s core designs, also referred to as reference designs, are owned by the British firm itself. While ARM does not build a chipset entirely, its core designs to be used for 2nm chips will also be patented by the foreign parent.
Industry stakeholders say that buying patents is necessary to get an edge in this space. Earlier this month, Jan Crols, chief technology officer of domestic technology firm Cyient’s semiconductor subsidiary, told Mint that being able to procure patents—instead of developing foundational chip designs from scratch—can shorten the time that India would take to catch up with global chip design leaders.
Right now, though, India does not get instant ownership solely through its engineers working on a foreign firm’s chip design from an office within India.
How does local chip design help, then?
The indirect benefits are significant. India’s early-stage semiconductor startups such as Mindgrove Technologies, and veterans such as Continental Design, can get access to expert talent in the near future —a skill they can bring to research initiatives and commercial entities alike. Applying chip design to research operations can help India develop its own commercial cutting-edge chip patent.
Similarly, the rise of skilled engineers working on cutting-edge chip technologies is also expected to increase interest from investors in backing homegrown semiconductor firms. More than just chip fabs, the control over semiconductor patents is seen as a platform of vital geopolitical leverage. India, through the large technology firms investing in chip design and engineering facilities in the country, stands to benefit from seeing the birth of a coordinated chip design industry—which can in the coming years be leveraged for what would actually be India’s own chip design in the long run.
