BANGALORE, India—Chief executives of companies, including semiconductor companies, are in the process of asking themselves on how best to address the Chinese and Indian markets, as these markets are the ones that are on top of everyone's mind, according to Lip-Bu Tan, president and CEO of EDA vendor Cadence Design Systems Inc.
Speaking to executives here, Tan said this is because semiconductor consumption in the two countries is not only rising but set to rise even more.
On the other hand, semiconductor companies, though having more than adequate cash reserves, are struggling for top line growth, without exception, Tan said.
"Every CEO is worried," Tan said. "We are going to be in a very challenging situation, not just economically, but also politically, in both Europe and the U.S."
Semiconductor companies are investing in designing the next killer application, but in terms of staff, most of them have imposed a freeze on hiring. There will be more consolidation in the semiconductor industry, Tan said, citing as an example the recent acquisition of National Semiconductor Corp. by Texas Instruments Inc.
"The number of startup companies in the semiconductor industry has dropped. This worries me as innovation typically comes more from startups," said Tan, who is also chairman of venture capital firm Walden International.
Cadence is investing in strategic programs such as 20-nm related work with foundries, in ARM-optimized solutions, high performance and advanced node design intellectual property and sees new applications, mobility, video, cloud computing and green technology as drivers of business in the future, Tan added.