The semiconductor industry is globally a $600 billion industry, and it is expected to grow to more than $1 trillion by 2030. This growth, at a rate of almost 12-13%, presents significant potential.

The semiconductor value chain encompasses IP providers, design providers, and various other players. While the general-purpose chip market exists, the Application-Specific Integrated Circuit (ASIC) market is growing three times faster. This growth is driven by companies seeking differentiation at the chip level. Larger semiconductor players may not be as interested in this market due to its relatively smaller scale.

According to a study, the global ASIC market size stands at $24.6 billion in 2023. This is likely to cross the $52-billion mark by 2031, growing at a CAGR of 10 p.c..

Cyient has been involved in semiconductor design services for over 20 years, including collaborations with companies like IBM and GlobalFoundries. In 2017, Cyient acquired AnSem, a company based in Belgium with strong capabilities in ASICs. Over the past 7-8 years, Cyient has developed approximately 40 different ASICs. Cyient offers a turnkey ASIC solution, handling everything from customer specifications to final chip delivery. Despite the growing demand in the ASIC market, Cyient’s current business structure limited its growth potential. The capital requirements, buying cycles, and commercial models differed significantly between the traditional semiconductor services market and the ASIC turnkey market. 

Cyient aims to carve out this business into a separate entity to capitalise on the market’s rapid growth. There are several reasons for this decision. Cyient has a strong track record in chip design and delivery, with a portfolio of over 40 ASICs. The target market for ASIC turnkey solutions aligns with Cyient’s existing customer base in the automotive, healthcare, communications, and industrial sectors.

Cyient can leverage its cutting-edge technologies and IP portfolio in Europe, combined with its cost-effective design engineering ecosystem in India, to offer a competitive proposition.

The board has approved the creation of the new entity. Internal preparations are underway, and the launch is planned for the first quarter of the next fiscal year. The new entity will operate as a fully owned subsidiary of Cyient but function independently with its own leadership team.

The specific details regarding personnel allocation are still being finalised. The new entity will launch with a smaller, focused team, primarily comprising critical resources. As demand grows, the team will be expanded, potentially incorporating the entire existing semiconductor workforce.

The new company will primarily focus on four industry segments for its ASIC turnkey offerings – automotive, industrial, telecommunications, and healthcare. From a domain standpoint, the company will specialise in areas like power and energy, communication, microcontrollers and System-on-Chips (SoCs).

Yes, the new entity will operate on a fabless model. It will leverage its strong ecosystem of partners, including fabs, OSAT players, and IP vendors.

The talent pool for semiconductor design is relevant for both traditional services and turnkey solutions. While there is a shortage of skilled engineers in India, Cyient has a strong in-house talent base and is actively hiring. To address the talent crunch, Cyient has established academic partnerships to develop a future pipeline of skilled engineers.

The ASIC turnkey market in India is not crowded. Most Indian service companies focus on providing specific design services rather than end-to-end turnkey solutions. While there are several players in Asia and Europe, the Indian market presents a unique advantage due to the limited competition.