Intel to make $100m R&D investment in India

Intel has unveiled plans to expand its research and development efforts in India and increase the number of employees it has in...

Intel has unveiled plans to expand its research and development efforts in India and increase the number of employees it has in India from the current 1,000 to around 3,000 over the next few years.

The investment required for this expansion will be about $100m (£64m), chief executive Craig Barrett said. "These plans are contingent on some form of economic recovery in the hi-tech industry," he added.

Most of the new staff will work at Intel's Development Center in Bangalore where Intel currently employs about 900 developers. The announcement by Barrett that Intel is beefing up engineering resources in India, after an announcement in July that it was trimming its workforce worldwide by 40,000 people in the second half of 2002, suggests that the company is shifting some of its R&D from the USA to India which is a lower cost location, according to analysts. Intel also announced in July that R&D spending for 2002 is expected to be approximately $4bn (£2.6bn), lower than the previous expectation of $4.1bn.

Intel's India Development Center in Bangalore has emerged as a design hub for Intel's new business offering ASIC (application-specific integrated circuit) design services to customers, according to Manni Kantipudi, director and site manager of the centre. Intel announced in September last year that it was setting up a new ASIC business, called Intel Microelectronics Services (IMS), focused on the design of networking and communications chips for customers.

The India Development Center is also working with Intel's other business groups such as the networking and communications group and the microprocessor group. Software & Silicon Systems, an Intel company in Bangalore, has designed some of Intel's new network chips, including the IXE2424, a network switch on a chip.

The India Development Center is also working on Intel's internal information systems including supply chain applications, sales and marketing applications, finance and enterprise services, and enterprise business computing.

Like other multinational semiconductor companies that have integrated circuit design or software development centres in India, Intel too has shied away from investing in chip fabrication in the country.

"There is no thinking on setting up of any manufacturing facility in India at least at the moment," Barrett said.

Although Intel will continue to invest in countries it had earlier identified as "hotbeds of activity", and where it has either manufacturing or design or both, such as Israel, India, and Ireland, Intel expects to make large investments in Russia and China as well.

"I should point out that Russia and China are equal candidates for our investment going forward, and probably will see the greatest percentage growth in our investments," Barrett said. "China from a combination of engineering and manufacturing and Russia primarily from an engineering standpoint."

Other Intel sites in Malaysia, the Philippines, Puerto Rico and the USA will however continue to play a significant role in Intel's growth, Barrett added.

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