At a recent conference, I spoke with a colleague who talked about the high engineer turnover in China and Asia in general with his American company. Essentially, they would become trained and then immediately leave and go to a indigenous competitor. Then ultimately, you don't get the business. Thus, it seems like someone like TI would be weary of such practice.
Here's what I've heard lately from a colleague of mine in Beijing:
He wrote to me:
"Actually, the job market of chip designers in China are still very strong. And engineers are easy to find another good salary job if they do not like the current salary, corporate culture or even the logo or slogan of a company."
This has been the truth. From ADI to TI, the industry is going China which means they are building big teams in those countries. But do not be fooled, Americans visit those engineers monthly to help them.
quote: TI is after in China is a smart metering device based on China’s state grid program. TI taped out the first product and is sampling it now, said Roller. “This is a huge opportunity for us.” -- you bet it's a huge opportunity to control costs and precious resources; see PiperJaffray's still useful industry report on those opportunities: http://www.strategicsiliconservices.com/wp-content/uploads/2011/09/MR-PJ-08162010.pdf
It is amazing to see that the local companies some time takes only six month from start of design to tape-out! Do they deliver the products with expected quality?
Recently, there was a news about China government kicking off a program that aims to define a national processor architecture:
Does this move have any relation to that?
No, Sanjig. Not directly.
However, I think what gets lost in the West often is China's speed. Once they decide to do something, Chinese moves very fast. Do they cut corners? Some do, others don't. But the biggest challenge facing the multinationals is how to keep up with this China speed, in my humble opinion.
In my experience the emphasis in China is on cost and speed. Quality, meeting specifications, test coverage, etc., not so much. And, keep in mind that it is pretty easy to tape out a spinoff product in 6 months, which is based on a family which took TI years to develop. Furthermore, a lot of those "quick" products developed in China by Chinese companies are knock-off second sources of US IC-s. While Chinese engineers are willing to work harder and longer hours than their US colleagues they have much less experience. In general I do not believe in miracles, like developing a significant new IC from scratch in 6 months.
I do not believe in miracles, either. No doubt a new chip taped out must be a spin-off product...but then, what we can't lose sight of is that these spin-offs must come to the market, very quickly. Otherwise, you lose the window of opportunity in meeting particular needs of a particular customer. Again, we can discuss who is more experienced in or better at meeting the spec as much as we want, but if we don't have a product designed to meet the spec in the first place, we are not even participating in the market opportunity.
Thus, I think TI is making a great move here by installing its MCU design center in Shanghai.
How is this trend going to affect the Low cost design centers situated in India? India does not seem to be a good market for manufacturing products, sales i am not so sure compared to China, but my guess is China probably is better.
I don't think there is any question that TI wants to do MCU design in China so that it can be tune with the Chinese customers building products. India, I believe, has a great deal of design talent, but TI wants to be as close as possible to customers in China.
In tune with, as a]close as possible to, the Chinese customers? You can't be serious? TI, like everyone else has a ton of offshore deferred-taxes cash it does not want to return to the US to get taxed. They could care less about where it's designed or for what reason or even about IP protection...a microcontroller is a microcontroller that an APPS TEAM is in tune with he customer on requirements with. The IP protections are a non issue for execs who only care about keeping that offshored cash from coming back and paying for our jobs, roads, schools, retirement, and wars.
India's design talent used to have an edge over China's but I am afraid the margin has shrunk. Access to fab for post-Silicon characterization and design iterations give a huge advantage (while India is busy putting out press releases on its fab plans about once every six months!).
Junko, to your point, TI has invested in India starting in the late 80's when many similar businesses were running as far away from it. The initial years for TI in India were loss leaders but TI believed that the market there took longer than in other countries. Overall, investing in India has paid off to TI.
I have a hard time believing the design cycles move much faster in China for MCU's. It can certainly be replicated here in the US and in other places like India.
The risks mentioned in the comments above around employee retention and IP protection are very real, but in the end the risk of not being in China is far greater.
The needs of local Chinese customers (and other emerging markets) are simply different than what is required in most of the western world today. Product lines based in China will have the best ability to translate those needs into device specs and execute on them.
I'm glad you're aware that your IP is in danger. I'm curious how you calculate that the risk of not having a design center in China is higher than the risk of losing your IP portfolio. TI has a fantastic legal department, but that has very little impact in China.
How 'IP is in danger' for a digital IP of a MCU? Unless an employee leak out all the rtl and custom block designs, it's really hard for any company to produce a compatible IP product in a short time. And the market won't wait for anyone to do so. That's why the Chinese won't simply copy a complex MCU or SoC product. Analog IPs, on the other hand, needs more protection.
Check out Scott Roller's Linkedin profile - that explains his smile and the demise of TI's management proficiency. I just spoke to a friend at TI about how they were doing and he mentioned that China was eating their lunch in analog products. Seems China hired several contractors from the US a while ago (unemployed no doubt), paid them handsomely, and they solved their analog process problems within ~3 weeks. Now China is dialed in. No more field advantage for the US.
Like we found with Russian nuclear engineers, unemployed US semiconductor engineers can be a loose cannon for hire.
It is a win-win decision to establish design center for TI in Shanghai.
On one hand, TI could sell more chips to the most market China in globle and get big profit by closing to the demand market.
On the other hand, more Chinese engineer have chance to enter into TI to learn knowledge and accumulate experience.
What are the engineering and design challenges in creating successful IoT devices? These devices are usually small, resource-constrained electronics designed to sense, collect, send, and/or interpret data. Some of the devices need to be smart enough to act upon data in real time, 24/7. Specifically the guests will discuss sensors, security, and lessons from IoT deployments.