Tuesday, February 06, 2007

Semicon Industry's new business model

Here is an interesting report by Mr. Tsuyoshi Kawanishi especially for those interested in the Semiconductor Industry in Japan. This conference was held to discuss the "Insourcing" business model pioneered by Future Techno Designs (FTD) - a Singapore based organisation. Lectures were delivered by Mr. Thakur (Minister-Counselor of India), Mr. Tamaru (IPA), Mr. AndoElpida Memory Inc.and Mr. Inoue (Japan Society for the Promotion of Machine Industry).

Bottomline: Indian software professionals can look to many exciting jobs in this field!!

Major Comments in the Seminar

  1. For electric devices, cost of software has been increasing. For a cellular phone, more than 70% of the cost is occupied by software

  2. Many of the quality issues concerning electric devices are caused by the software troubles (software:34.2%, hardware 23.3%, spec 22.2%)

  3. There are 175,000 design technologists in Japan, but still 70,000 more are required. Therefore, it is inevitable to seek for software technologists abroad

  4. India, China, Israel, etc. are candidates. However, issues such as employability, skill, cost, language, infrastructure, country risk, partnership, etc. must be taken into consideration.

  5. Though, India leads the other countries on the whole, China is still a strong candidate thanks to its large market. Yet, India still has an advantage in development of embedded software.

  6. There are two types of partnership style for embedded software.

  • Modular type: US/EU type. This is so-called "outsourcing" type. It enjoys good efficiency but various kinds of "barrier" between each side need to be broken.
  • Integral type: Japan/FTD type. This is so-called "in-sourcing" type. There are less "barriers" between each side called "all-embracing system". 
  1. Insourcing model of FTDFTD finds a design company in India upon request of each customer. After a certain period of time, the customer can take over the company. The Insourcing model is limited to matching, transparency, protection of IP, accumulation of technology, and the like with specification, process, and basic design of the product.

Customer's responsibility:

  • provision of technical roadmap
  • provision of product planning
  • schedule planning
  • preparation of budget, and
  • technical integration

FTD's responsibility:

  • employment, education, and management of personnel
  • preparation of necessary infrastructure such as building
  • project & budget management , and
  • quality & process control

Reasons why Elpida chose FTD

  • it is in India
  • its achievements, especially with Japanese enterprises
  • its insourcing business model, and
  • trustworthiness

Mr. Thakur (Minister-Counselor of India): India is trying to improve infrastructure while putting emphasis on hardware development as well as software

Mr. Inoue (Japan Society for the Promotion of Machine Industry)To be more competitive, Japanese enterprises must make use of India more

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