On Dec. 28, 1945—two years before India became an independent country—Wipro was formed as West India Vegetable Products Ltd. to sell seeds. As it grew, it branched out into crushed seeds, then cooking oils and, later, soaps. With its profits, it invested in a hydraulics business—which, with a recent acquisition in Sweden, has now become the second largest in the world.

In the early 1970s, India's government famously forced multinational companies such as Coca-Cola and IBM out of the country. Taxes on imported electronics systems soared to 300 percent overnight, opening the door for Wipro and other growing conglomerates to buy components from overseas, then assemble their own computers and other gear for the local market.

For a time, such companies became important beta sites for Intel 386 and 486 processors and other computer chips. They designed their own motherboards, chassis and operating systems for everything from minicomputers to desktop PCs. But some 20 years later, the government switched policies, lowered tariffs and invited the multinationals back in.

"When the tariffs came off, our economies of scale were not good enough to compete with likes of IBM and Hewlett-Packard. So we had to decide what to do, given that Wipro has a policy of not laying off anyone," said Anand Valavi, an engineering manager at Wipro Technologies who was hired right out of college in 1994—just before the political shift—to design PC motherboards.

"People like me started taking on design projects for the worldwide market. That was the beginning of our design services business," said Anand, who helped establish, and now heads, the company's analog and mixed-signal design group.

Wipro snagged AT&T and Nortel as its first two big customers—deals that led to a shift in its primary focus, from computers to telecom. Today, it counts a laundry list of such companies—including Alcatel-Lucent, Ericsson, Motorola and Nokia—among its customers. What was a 50-person computer R&D team has bloomed into a diverse R&D services division with as many as 17,500 software and hardware engineers worldwide.

"Our vision is to be one of the world's top 10 companies," said Lakshminarayana Lan, the company's chief strategy officer.

The government policy shift led Wipro to extend its expertise in designing printed-circuit boards to developing its own semiconductor blocks and ASICs, in order to address the needs of its new telecom and PC customers.

"ASICs were new to us, but we figured there was no magic to it," said Valavi. "We put a group and tool flow together, started some basic designs for standard interfaces, and implemented them in such a way that people could put them in their chips, so we could license the blocks to others."

Within 18 months, Wipro had USB and FireWire blocks it could license to other companies or use in its own ASICs. It has nearly 90 FireWire licensees today.

As it grew, the group invested some of its cash in acquiring silicon intellectual-property firms and design houses in European markets to reach new customers. Deals in Germany, Finland and elsewhere helped Wipro expand its expertise.

A 2005 acquisition of Austria's New Logic added Wi-Fi and Bluetooth IP blocks in 180-nanometer technology to the portfolio, which the company has since upgraded to 130-nm and 90-nm designs. Wipro recently bought a wireless design center that Japan's Oki had operated in Singapore, thereby adding DVB and ZigBee expertise. Its silicon IP group now employs about 200 people.

In the late 1990s, Wipro became the second company certified as an ARM design partner. "We were early in the system-on-chip cycle," said Vasudevan A., who leads the company's 2,000-person hardware design group.

That group's 1,000 ASIC designers now kick out about 100 ASICs a year, putting it among the top tier of fabless design companies, said Sudip Nandy, chief executive of the telecom and product engineering group, which oversees all electronics design services. About half its current chip business involves delivering a full spec-to-GDSII design service; the rest is in lower-level jobs, such as verification or layout of other companies' designs, and in selling its silicon IP. The physics of success
The group is particularly proud of its work with chip startup Ageia Technologies Inc. Ageia had the concept and some specialized software to drive a so-called physics accelerator that could be an adjunct to a high-end graphics processor.

"The startup came to us with an initial idea and some software for it," said Sanjeev Patel, who managed the project but would not confirm the startup's name.

"We developed the silicon architecture based on a ground-up RISC core we designed and an instruction set we co-developed with the startup," Patel said. "We also designed other blocks for the chip, did the physical layout and handled design changes to optimize test coverage and yield."

An initial, 130-nm design was done in 11 months. Aegis and Wipro followed up with a second-generation chip, which packed 50 million transistors and was designed in a 90-nm process. Nvidia was pleased with the $99 accelerator card that the chip powered—so pleased, in fact, that it acquired the startup in February.

Customers such as Ageia can be gold mines for Wipro. "I love working with startups because that's where the technology really is, and you are working with top guns who are trying to change the world," said Sujeeth Joseph, who helps pitch Wipro's services to new chip customers and, if Wipro wins their business, helps define the target chip's architecture.

"We want to serve all the needs of the semiconductor companies, from VLSI design to standards IP, said Vasudevan. "Their needs have been changing; the whole make-vs.-buy decision has been changing."

One opportunity Wipro and others now see is to help chip companies design their core semiconductor platforms. Such work gives them insight that lets them pitch business developing derivative products for specific markets a chip maker may not have time to address itself.

"We can quickly put up a team to do a derivative design for a customer," said Vasudevan, whose group just finished one such project in automotive. "We are trying to develop and end-to-end capability."

The whole system
Most jobs, including the Ageia work, are paid per project. But the group has made some progress in its effort to share in the success of the products it helps design.

For example, one European telecom company is paying Wipro half its design fee up front for work on a new network switch, but the rest will be paid based on the product's revenue. Wipro struck a similar deal on a set-top box design for a Japanese customer.

Wipro designed 66 full systems last year. It recently commissioned a system-level testing center at its Bengaluru headquarters that includes an EMC chamber big enough to test a 5-ton car for radiation immunity up to 18 GHz and radiation up to 40 GHz.

"In all India, this is the only location that can offer complete systems testing under one roof," said Ravi Kumar Chirugudu, manager of the test center. "Up to now, we had to go outside the company for full system testing."

The local center will nearly halve the cost of doing system test compared with the cost at European or U.S. labs, he added.

"We want to make our customers' R&D dollars go further than they ever could before," said group chief Nandy. "We expect growth of 20 percent. That is not as fast as the 38 percent growth in our financial services division, but it is very healthy for this electronics market."

Azim Premji, chairman of the Wipro Ltd. conglomerate and son of the group's original founder, claims the former vegetable oil company is now in the forefront of technology.

"We are the largest third-party R&D services supplier in the world," Premji said.