BANGALORE, India Cypress Semiconductor Corp. will invest about $5 million in India over the next 12 to 18 months as it doubles the number of engineers at development centers here and in Hyderabad by year's end. The cash infusion will push Cypress' investment in India to approximately $25 million and its roster of engineers from 160 to about 320.
Almost a decade old, the Bangalore center focuses on data communications. It developed Cypress' most complex logic chip, the Packet Over Sonic IC, with more than 15 million transistors. Hyderabad was set up last year. So far, Cypress India has compiled more than 60 U.S. patents.
Cypress put the benefits accruing to it from Indian operations at about $200 million, and the growth planned here is meant to reaffirm the utility of Cypress India. In addition, the parent company will look to increase the chip design and software development work that Wipro Technologies has been doing for it for the past couple of years, said T.J. Rodgers, president and chief executive officer of Cypress.
Cypress (San Jose, Calif.) is on target to cross $1 billion in revenue this year, having hit the $250 million run-rate in the previous quarter, Rodgers said. Revenue growth in 2004 will be about 30 percent more than in the previous year. Predicting a boom year for the chip industry, Rodgers said that he expected a good run until at least mid-2005. "I have been in the industry since 1975 and through five recessions, but I have never been able to predict a downturn," he said in explaining why he would not discuss the business outlook beyond the next 12 months or so.
Rodgers predicted that sales to cell-phone manufacturers will go through the roof this year. In general he pinned most of the growth potential on Asia, where he sees a big shift in the consumption of semiconductors. "Asia has taken off like a rocket, and I do not see an end to it," he said.
While noting Cypress' plans to grow its design centers in India, he said the company does not intend to ship out U.S. jobs. He called the offshoring controversy politically motivated. "The clamor against outsourcing is low-class, a diatribe. In general, the world is much better off when people are working at the skills they are good at. India is one of the most skilled in software, so it is right for the world to buy Indian software. The U.S. makes chips very well, and it is right for India and other countries to buy chips from the U.S."