Global semicon industry on rapid recovery curve: Dr. Wally Rhines

Thanks to Mentor’s Raghu Panicker and Veeresh Shetty, I had the pleasure of an exclusive meeting with Dr. Walden (Wally) Rhines, chairman and CEO, Mentor Graphics, post his technical keynote at the recently held VLSID 2010.

We discussed a range of issues, such as the global semiconductor and EDA industries, as well as the Indian industry.

Global semicon industry
According to Dr. Rhines, the global semiconductor industry is currently on a rapid recovery curve. However, that the semiconductor total available market (TAM) would decline in 2009 due to the weakness of H1-09.

He added that the global semiconductor industry’s growth could even be as much as 22 percent during 2010, as also advised by Malcolm Penn of Future Horizons. This number can definitely change, rather than remain so optimistically high, as the year goes by. (Yes, Malcolm’s an optimist!)

Dr. Rhines said, “If you look at the major semiconductor companies, most of them will have an opportunity to grow — after the Q4 results are in.”

On global EDA industry
So how will all of this contribute to the well being of the global EDA industry?

According to Dr. Rhines, the EDA industry has been a little different. Mentor and Synopsys have probably had more growth and stability. “Mentor could be the only company to grow. Bookings in Q3-09 have grown by 15 percent and revenue by 3 percent. We are perhaps the only major EDA company that has grown,” he said. In the long term, EDA tends to trend with semiconductor R&D. Semiconductor R&D was flat in 2008, down in 2009, and will probably grow in 2010. So, EDA will probably lag in 2010.”

Advise for Indian semicon industry
I also requested Dr. Rhines to advise the Indian semiconductor industry.

He said: “The Indian semiconductor industry needs to look at more of systems and IC design, as well as embedded software development. India should also have more product start-ups. What makes India unique is its talent, education, etc. India is now producing its own electronic design architecture and embedded software, and it also has the systems infrastructure. India can greatly advance what it already does so well.”

Commenting on the industry’s weaknesses, he added that the Indian semiconductor industry needs to increase the infrastructure for its local start-ups. That infrastructure would require things such as VCs and especially, a cultural acceptance of failure. Also, if India does not have the intrinsic semiconductor manufacturing capability, then it needs to stay current on the evolving technologies.

Does India need a fab?
On being asked this question, Dr. Rhines’ reply was immediate: “I don’t think India ever needed a fab! You can easily have closer relationships with other fabs. The highest paying jobs are design and innovation, etc.. The recession has been driving down costs and innovation has been happening. There are big growing markets — in India and Asia.”