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The IT industry is witnessing a second and more sophisticated round of migration to tier II cities. After IT services companies and software MNCs moved out of Bangalore, Hyderabad and Noida due to their appetite for large numbers of professionals, it is the turn of semiconductor companies to follow suit.
Unlike IT services companies, which require a large workforce, an average semiconductor design firm needs 150 engineers. However, finding the right talent in the IT clusters has become a difficult task even for these companies, considering the attrition rate and rising salaries.
The choice of semiconductor firms stretches from Manipal in coastal Karnataka, Mysore, Goa, Coimbatore, to Ahmedabad. Sankalp Semiconductor, a provider of analog, mixed signal and radio frequency semiconductor services, is based in Hubli, a north Karnataka town. The company was founded by Vivek Pawar who was with Texas Instruments. Sankalp plans to grow in tier II cities. Its next centre will be in West Bengal. Other semiconductor-related companies operating in secondary cities include Caliber InfoTech in Coimbatore, Karmic Microelectronic Design Centre in Manipal, ControlNet in Salcete (Goa), eInfochips in Ahmedabad and L&T Emsys in Mysore.
The India Semiconductor Association (ISA) expects more companies to set up operations in secondary cities. "At present, there are only six semiconductor-related companies, which have excess of 600 employees. All six are based in IT clusters. Smaller and mid-size companies prefer secondary cities for growth," said ISA President Poornima Shenoy. "Hubli, Manipal, Pune and Mysore have high quality engineers," she pointed out.
Embedded systems solutions provider eInfochips has chosen Ahmedabad as its location. It employs 600 engineers, and 400 are based in Ahmedabad.
The company recently opened a centre in Pune. "We have been profitable from the day one. We have grown 50-60 per cent in business volume and employee strengths for the last three years," eInfochips Vice-President (international sales) Sudhir Naik said.
To set up centres in smaller cities, some companies had to build their human resources from scratch. Coimbatore-based Caliber InfoTech is one such company. "Since there were not much activity in the semiconductor industry and experienced hands were not available when we started, we had to train fresh engineers to produce results. We were able to get good qualified engineers from the colleges around the city," said Prathibha Deendayal, director (engineering and design), Caliber InfoTech. The company, which employs 140 professionals, is confident of attracting fresh talent.