The Seventh Wave - Pakistan’s Chance to Achieve Escape Velocity

Re: # 37
In this global economy, the efficiency is already being built in, that the technical world needs the best brains, and not the cheapest brains. And that is where Pakistanis are.

Ans: How you claim to be best? How many papers does Pakistani reasearch scholars/engineers publish in international forums like IEEE? Please enlighten me. From my work experience, the best talent (I have seen) are Jews (in IT Industry) and Russians. Indians, Chinese and Japanese are following. Vietnam is the rising and may match any time.

Re: # 68
Specifically to the issue of Semiconductor industry, you have well entrenched players (Far east countries in Manufacturing and countries like India, Israel and other players in Design) to compete for business...

Ans: Man, some point of time, you should enter the business and compete with existing players. Israel was the only destination for hi-tech R & D and manufacturing for US based MNCs in eastern front. Now, they are using China and India also. India had lost the Intel Chip plant to China. Anyhow, TI, Intel, AMD, IBM, Flextronics, Nxp etc. design chips from India.

Brazil, Russia, India and China.

Re: # 33
Pakistanis are second to none when given the right environment and opportunity
Ans: USA is the technical super power for last 40 years. If, Pakistan complains about opportunity, it turns out to be excuse (they are with USA for long time).
The generic wisdom is, you have to create opportunity rather wait for it.
If Pakistanis have required skill, they can ghet trained by US industry and universities. If they need money, Saudi Arabi can provide that.

#77, thanks

Just a clarification, by probability analysis, I was suggesting that since there is no shortage of planets in the universe, it is possible that others exist like the earth on which life is found or others different than the earth on which different kind of life is found. That is the inspiration behind SETI, if it was impossible, I doubt scientists would waste time effort and money looking for it.

Re: # 76

We ALL can download this SETI program on our PCs and monitor the radio msgs recd from space on realtime basis.

http://setiathome.berkeley.edu/

Plain simple and very exciting to have that on our PCs.

Asadi:

Thank you very much for your post. Given your sincerity, and given my lack of a better answer, I shall tell my daughter exactly what the Koran says.

Yet, you make a mistake when you say:

``If you seek probability analysis in seeking the answer than it is more than probable that it does.``

NO, it does not if your prior belief is that:

``With probability one there exits no other place, except for earth, where life exists``

p.s.: You need to tell me more about the arabic verse.

GT writes <<< Is there life in some location in the universe that is not our planet: the earth? >>>

Since the question is off topic, I will make only one post on it here and chowk-staff is more than welcome to erase it, since unlike my other posts this is off-topic and since whenever the Quran is mentioned the mirasis on here, the dumbest among them have to expand discussions beyond absurdity, in which I am not interested, so ONE post. Ok, to your question,

If you seek empirical verification of life in the universe other on earth, it has not been verified. If you seek probability analysis in seeking the answer than it is more than probable that it does. That is the extent of human knowledge on the subject to date. If I have missed something please enlighten me.

Regarding your 2nd question, <<< What does the Koran say about the answer to the previous question? More importantly, why does it say so? >>>

Why the Quran says what it says is an easy one to answer concerning this question. The Quran claims to come from the creator of the universe, the creator of life, so if he created life in areas other than on earth he should know about it, and it so happens that the Quran claims that there is life other than on earth, in a very interesting aya 42:29



The verse is talking about the skies and the earth, and note the word `feehima` i.e. in them, there being `daaba` or animals (which includes humans). In fact there are a couple of other verses whose references I am unable to locate at this time (don`t have the index with me). Hope that helped with what you were looking for.

masadi,

behram claims this is a topic involving hard science, you claim that it involves social sciences as well. Hence, in line with chowk policy, since I am faced with a social as well as scientific dilemma, I think this is a forum to ask you a question that my child asked me a couple of weeks back:

Is there life in some location in the universe that is not our planet: the earth?

To this questions, I might like to add a question given the claims in your webpage (this question completely deviates from the topic and is hence against chowk policy):

What does the Koran say about the answer to the previous question? More importantly, why does it say so?

By the way, I am serious here.

Regards

#70 behram, please stay on topic, if that is not too hard for a mirasi like yourself.

In addition to #69 to chowk-staff

p.s: I am sorry if you feel like I am giving you a hard time on this, but this kind of erasure and personal bias is not healthy for a site of this nature. thanks

Dear friends,

It appears that the best route for expatriate Pakistanis to take is the electrical engineering transfer of knowledge from outside Pakistan into inside. This could be achieved in several modes.

To-Date, for varied reasons Pakistan is not ready to get into building a $3B FAB. However, Pakistan could provide adequate top paid design engineers to engineer new and coming technology and being creative. Existing electrical engineering curricula in universities should be enhanced to provide this knowledge. This Pakistan-centric enterprise could make use of the available pool of talented design engineers around the world.

Day-to-day operation of this enterprise and strategic design business development should be left to the engineers. Some public/private partnership could help, such as the federal R&D funding (if at all suitable in the Pakistani context). Design house parks (similar to such places already available in Hong Kong) could be established. Tax incentive could be provided to international small design houses to open shops inside these Pakistani design parks. And we must keep, anybody and everybody who has anything to do with the Fauji Foundation completely out.

Respectfully submitted,

Dear Chowk staff,

Regarding my posts #59 and #62 that you have erased, they were made in response to the charge that I was posting off topic when I talked about the socioeconomic aspect of development. I had related that to excerpts from the author`s article in those two posts explaining how relevant my discussion was, how can that now be off topic? Therefore your erasure is not justified, since mine was the first post you erased it tells me that the other erasures were just colletral damage to cover up your unjustified erasure of my posts. I recommend you restore my posts, since it merely reveals your bias in the issue and an abuse of power.

Sincerely,

masadi.

Re: # 69 by masadi on September 7, 2006 1:19pm PT

Dear Masadi:

Cry baby, uh!

Respectfully submitted,

I`m afraid, a well intentioned but an infeasible/unadvaisable proposal by the author.

Gaining and maintaining a foothold in high tech is a laudable goal for any developing country.. But it is probably not necessary in the short term, esp for a country like Pakistan which does not have a strong intellectual base (I might be wrong here) to support it. The country is better off investing in the areas where they have a better chance and invest massively in all levels of education. Then maybe you can join the next wave of high tech...

Specifically to the issue of Semiconductor industry, you have well entrenched players (Far east countries in Manufacturing and countries like India, Israel and other players in Design) to compete for business..

Rgds,
Avkrishna

Dear Chowk Staff:

Thank you for doing the job well done. As you can see, you have deleted 7 posts which were deflecting to other areas, (at least 10% of the posts on this site).

Please always guide us to respond to the posted article.

Respectfully submitted,

Last few posts are filtered because they are off subject. Please use this space for discussing the article topic.

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I find it odd that masadi feels Pakistanis cannot compete in the current world economy. Western MNCs care about cheap labor. If Pakistan opens the doors they will invest.

It reminds me of the Indian bureaucrats who wanted to protect India`s population from exploitation.

behram writes <<< Dear masadi:

You have an uncanny way of deflecting the topic to issues that are marginal as best. >>>

You post shows that you have completed your transition to being a mirasi making nonsense posts. If you think that you can have any kind of industry in Pakistan that is going to be immune to international trade and its rules rigged against developing countries, or whether any industry is going to take Pakistan out of its position of misery inspite of the global world system, then you are high on something. If you cannot answer my posts that is one thing, blabbering away asking for ``documentation`` like bs khan or saying that it is irrelevant when it sure is 100% on target shows your mirasi mentality.

So, if my posts were irrelevant how do you explain the following by the author of this article:

1. <<< The least that these ‘Enlightened Amir(s)-ul-Momineen’ can do is to provide an enabling environment that will empower people to harness their latent entrepreneurial zeal to fuel the Industrial and technological growth required to take us there...... >>>

2. <<< Take the Philippines for example; they have managed to carve out a good niche market for themselves in the Testing and Packaging sector. All major semiconductor firms of the world have a low cost facility in the Philippines that churn out their high volume parts >>>

3. <<< Incase they need a hint where to start their marketing blitz from, the answer is Europe. Modern European semiconductor manufacturers have shown the same enterprising spirit that their ancestor`s trading companies showed and are extremely keen on exploring Virgin Islands of opportunity, and who else is better aware of this European trait than the people of the subcontinent. In my opinion, European powerhouses such as ST Microelectronics, Philips Semiconductors, Infineon Technologies and the likes thereof could be successfully persuaded >>>>

Re: # 56 by masadi on September 6, 2006 12:22pm PT

Dear Masadi:

By responding to my posts, just shows that you are dignifying me in more than one way. You keep me in the conversation and with your stupid irrelevant posts, you just show where your thoughts are stuck.

Frankly, I can not blame you for your thoughts. Unlike me you are a product of soft sciences, and this is not where you belong. The author of this article is trying to gauge whether his idea of encouraging Pakistan get a FAB is feasible or not. That is the physical side of having some physical asset, electrical engineering, et. al.

He probably did not assume that there are folks, like yourself, on chowk who would throw out issues that are not worth a dime in this discussion. Your educational upbringing is only suitable when there is a discussion on some political economic conversation, and not where issues of knowledge based transfer is discussed. Your tearing down sentences to prove your notion does show your lack of knowledge of the subject matter.

Electrical engineering is all about on/off and electrons, and not some theory written by those in softer science. In engineering schools they never teach social sciences, because frankly we have no need for them.

So please clean up your act (at least on this board) and be a by-stander reader, and maybe you will get some nugget of enlightenment as to what engineers are all about.

Respectfully submitted,

Re:#53 by masadi on September 5, 2006 9:50pm PT

Dear masadi:

You have an uncanny way of deflecting the topic to issues that are marginal as best.

The writer of this article is promoting the idea to have semiconductor FAB in Pakistan. Nothing wrong with that thought. Some us enlightened ones would like to see Design houses to flourish as a preamble to a full blown FAB houses. And that is actually where the discussion is lying.

If you have noticed, it is only you who has brought in some other issues, which is quite unrelated to the topic which the writer is trying to have. You are the only one, who has post after post, and site after site, who suggest other non-related stuff.

Let me put it frankly to you, masadi, you are very dear to me and I love to interact with your thoughts, but somehow this particular streak in your thought is not needed, at this moment in this article.

Almost all the interactors have advanced degrees from well established US Universities, and calling us all sorts of names is not at all funny.

Here is some of deflection that was thrown into the discussion.

Talk about { tahmed writes <<< AND in fact nationalization weakens the governments.....in separation of government from economic activity are lost. >>> and then your response to it.....

Actually, you wasted over 12 precious lines in your post # 53, to answer something irrelevant. Now, how is that time used efficiently used to communicate between fellow Pakistanis who love their country?

---

Another example of your post is #52

To another post by tahmed, you wasted 21 lines in your theory.

All of this to me is non-informative and total waste of time in relation to the discussion at hand.

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Another example of your post is #51, wherein you spend another 10 lines in discussing issues beyond the scope of this article.

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And in response to my post, you misconstrued to my asking a very innocent question relating the future of R&D in Pakistan. Actually, that question was kinda tongue-in-cheek. But, it is you who deflects it into wherever. Why?

See, unlike you, I am proud of my country and its fellow engineers. I believe, that Pakistani engineers are second to none in this world.

---

Finally, I do not agree with the Chowk Staff to censure your post.

However, I do want the author of the article to use his/her right and moderate his site. Wouldn`t you agree?

As always,

Respectfully submitted,

masadi: Thank you for your profound thoughts. :-)

tahmed writes <<< AND in fact nationalization weakens the goverments policy, and does not strengthen it. this is because of the checks and balances inherent in separation of government from economic activity are lost. >>>

So the economic activity is going to regulate itself, abandon the profit motive and look after the masses and take care of the environment and achieve an equitable distribution of wealth and income. What kind of fantastic absuridity is that? People like tahmed have no problem with government intervention when it strengthens the corporations and their clout or bails them out with massive corporate welfare that is financed with our tax dollars. He has a lot of problems with governement when it tries to regulate wholesale looting of third world assets by multinationals who will send all their earning back to their home countries resulting in a multiple exit of capital. Nationalization by a people`s government where production and profits are geared towards local need fulfilment is very good and a welcome alternative to explotation of resources by multinationals while the people languish in poverty inspite of their hard labor.

tahmed writes <<< In the US, individual states compete with one another to attract foreign investors. Recently, Toyota became the second largest auto seller in the US, pushing Ford to number three and forcing the latter to shut down some facilities. No one in the US batted an eyelid. And what is true for the US in fact applies even more to Pakistan. >>>

Nonsense. Individual states and cities and town might compete but always to their detriment, most of the local manufacturers have already relocated overseas to take advantage of cheap labor, which has resulted in no benefit to those countries while huge profits for the manufacturers. If you look at the aggregate picture of this movement, if it is not overseas it is towards the southern states where unions are weak. These are shenanigans to avoid any regulation and take advantage of everything while getting tax holidays and exemptions and free rent.

If Ford and other US car manufacturers were going out of business because of Toyota, as is the case with `Third World` industry that is completely wiped out and non-existant, then many eye lids would be batted, many eye lids were batted when China placed a bid for Unocal and the US government did everything to block their purchase and forced them to withdraw.

Don`t think you can fool people here with such bs, people look at the world and see a handful of countries dominating industry, which gives them monopoly power in dealing with the rest of the world, and in that group there is the US and Europeans and their protectorates like Japan while the rest of the world is languishing under their rules in crushing poverty and you want us to believe that ``what is true for the US is true for Pakistan``. Dishonesty of the kind where you say that powerful US corporations will just sit by and let someone destroy them without batting an eyelid, when they have shown us often enough that they are willing to destroy whole countries for their profits is just shameful on your part.

tahmed writes <<< You cannot build an extension to a house in the US without getting two or three visits by a government inspector. You cannot operate a restaurant without regular inspections and loss of license if even they see a cockroach in the kitchen. You can complain to the local government if you have been gypped by a merchant and have them intervene on your behalf >>>

That is all in theory, the same ``theory`` exists in Pakistan as well. There is wide scale corruption of a much larger scale in the US, invading and destroying a whole country based on lies is that not corruption? Enron and the massive Savings and Loan fraud that the government bailed out on the backs of ordinary tax payers, was that not corruption? Iran/Contra, Watergate and on and on. Regarding your cockroach example, it does not work that way, I have worked at restaurants in the US during my student days where rats ran wild but they never lost their licence and the whole period of struggle that led to these laws that protect the people, they did not develop among a starving/uneducated people, they required a base, the same base that you will not let Pakistan develop as you promote dependency upon the West.

behram writes <<< Ignoring some of the rubbishes around here, we can definitely continue in evaluating what Pakistan can do to enhance its drive for modernization and ``taraqui.``

I recently read that US spends about 0.5% of its GDP on R&D. I have no idea, what percentage of GDP does Pakistan spend on it`s R&D >>>

The only ``rubbishes`` around here to quote his word, is his post. The country has vast numbers of the population living below the poverty level, the illiteracy rate is sky high and he is talking about R&D. That is what these people want, they want our economies to be geared to serving the West as coolies and peons, talking about R&D and other nonsense when the foundation itself is dying. When someone talks about strengthening that foundation, removing yourself from the muck the developed world has enslaved you in, they talk about how best to secure the crumb the master throws from his table and carve out a niche among the other slaves that are eyeing that same crumb. Go ahead erase this post as well

Ok, let me rephrase my post # 45 since the word ``mirasi`` is too much for the chowk editors to handle and so they erase my post. Tahmed had labelled me a ``Stalinist`` for seeking protectionism for infant industries in the developing world. So using his logic I had said:

As if Oxfam is a Stalinist organization and the US and the Europeans were ``Stalanists`` when they used maximum protection to protect their industry and as if they are being Stalanist today when they use all their clout to maintain their monopoly industrial standing to the exclusion of the rest of the world. So if the West is Stalanist by your definition, as we have logically deduced then you as its poster child are the biggest Stalinist among the Pakistani crowd here. Now can I rest my case or do you want to call in the (M word censored, refer to line 1) to reply to this?

Now what was so abusive in this that the whole post had to be deleted? Chowk editors, I know you dont like my pov, you block my articles etc, just let me know that you don`t want me posting here and I can find better things to do with my time.

coming back to the article, why can qualified pakistani engineers not work in neighbouring India.They can both contribute and benefit. To imagine that a duplicate fab city can be created in Pakistan is stretching things...

And for the non believers, Ahmad Salman Alvi of Karachi graduated from IIT Delhi in 1983 aftger completing a five year course in engineering. He was a popular student. So many other Pakistani students & others find India a comfortable place to study, work & live..

Let not the chest thumpers daunt you...

#38 urstruly:

If the experience of nationalization has failed (which is still debatable) then it does not mean that we should abolish a government`s policy making role as well.

I agree. And what I wrote did not refer to government policy making. In fact, the government`s regulatory role in Pakistan is weak and needs to be strengthened. You cannot build an extension to a house in the US without getting two or three visits by a government inspector. You cannot operate a restaurant without regular inspections and loss of license if even they see a cockroach in the kitchen. You can complain to the local government if you have been gypped by a merchant and have them intervene on your behalf. In Pakistan, you can build a 15 storey building without proper inspection (as obviously happened to the building in murree that collapsed a couple of days back). And the concept of government intervention to help an average customer out is unheard of.

AND in fact nationalization weakens the goverments policy, and does not strengthen it. this is because of the checks and balances inherent in separation of government from economic activity are lost.


You write I am suggesting that for the country of the size of Pakistan local market forces must dictate the kind of industry that need to be established.

I would agree with you if you took the ``Local`` out and said ``market forces``. By keeping out foriegn investors (as you suggest), the government is interfering in market. And thus setting the stage for all the ills that go with it. Foreign investors should be welcomed and not feared. Reason:

1. Local entrepreneurs have an edge in any case with respect to the local market. Thus, foreign investors generally seek out local partners to work with either through franchises (like in fast foods) or some other forms. You dont need a joint secretary to issue a license for this purpose (with all the ills that go with public officials having control over economic activitiy by exerting his nuisance value).

2. Local entrepreneurs cannot take local customers for granted. They are forced to become more efficient.

In the US, individual states compete with one another to attract foreign investors. Recently, Toyota became the second largest auto seller in the US, pushing Ford to number three and forcing the latter to shut down some facilities. No one in the US batted an eyelid. And what is true for the US in fact applies even more to Pakistan.

I have to go now, and may not have done justice to your post. So I may come back with additional comments on the rest of what you wrote later.

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Just as a sidenote to the use of word ``seth`` in this article.Not everyone is a Paan chewing Gujrati or Marwadi ``kem chho`` bhaaya.Some of the ``seths`` i`ve seen working are extremely crafty, patient and professional dudes.But then the variety among humans is as much varied and you cannot form opinions on one or two bad examples.

Behram

I wouldn`t have written any of my posts had they not been relative to this article and on going discussion. Please do disgaree all you want or ignore (even better) but do not portray something that is not.

#39 by Urstruly on September 5, 2006 11:32am PT

Dear Urstruly:

Please allow me to respond to your posts #38 and #39.

For the most part both of these posts are somewhat valid. However, as we say in our engineering consulting business, some aspects of your thoughts are beyond the scope of this discussion. And I will try to elucidate you on this.

Most of my posts are almost inline with your thoughts:

{Now please tell me why would local indigenous government invest in a particular field of higher education e.g. Electronics when they cannot even predict where this filed would be in the next five years. }

Agreed, and educating the local engineering community is not part of this discussion, although Charlie (ref. post #40) has answered this particular question quite eloquently.

{The …..Because of the lack of any labor laws and regulating authorities every member of male workforce want to immigrate to Canada.} Valid point and agreed for the most part, however, engineers migration to other countries is beyond the scope of this discussion.

Unless we can propose a new agreement to those who get government financing, such as that they may not leave the country until they repay the cost of government financed education, etc.. Again, all of this discussion is not what this article is all about.

{….this vicious circle starts because local governments do not take interest in the development of human capital and the reason they do not do that is because they can`t predict…}

Agreed. Why in the world should the engineering community be held responsible for what these politicians do?

In your response to tahmed32, post # 35: you noted

{I am suggesting that for the country of the size of Pakistan local market forces must dictate the kind of industry that need to be established.}

Agreed, and all my posts on this site is about this thought. Pakistan is not ready for a semiconductor FAB, but can definitely venture out in the design houses, as the article suggests.

{For example, Pakistan is a hot and humid country, and it always has been, but an indegenous airconditioner industry did not evolve until very late in `80s. Was Pakistan not hot before `80s or were there not many a/cs being sold?}

Agreed, that Pakistan should develop an a/c manufacturing industry. All it needs some sheet metal and a bunch of fans. You have stated what I have always wanted. As you must be knowing, India has started exporting heavy machinery to the US and is competing with Caterpillar. Why can Pakistan not do the same?

{Therefore, I am for a very aggressive government role in policy making in conjunction with local Chambers of Commerce and Manufacturer Associations.}

And that is why in one of my earlier posts, I am all for public/private partnership. But, I would be very skeptical to invite those who are not without rational minds to be involved in an engineering society. Wouldn’t you agree?

{See, the problem in West is different from us….ess. If the recent wave of global terrorism, and emergence of leftist governments in various parts of the world is not the signs of global sedition against this atrocity then what is?}

This fight that you are referring to is about natural resources such as oil, and minerals, etc. and not about human knowledge. And that is the distinction, at least, I have been trying to make.

Respectfully submitted,

Behram

Please read this paragraph from the article:`` Instead of rushing in we first need to comprehend the complete cycle of this industry and then try to see and analyze the areas that can be easily accommodated into our current Industrial stream and business psyche.. ....``

In this paragraph writer says that `` Design houses don’t require too much of an investment in terms of capital expenditure but does require a lot of rich human expertise and Intellectual capital and since both these quantities are in extremely short supply, the chances of a large scale proliferation of Semiconductor design houses or Fabless companies as they are more commonly known is unlikely, since top level knowledge and human capital is not our forte, nonetheless there are a few top notch design houses functioning in the ever green and serene environs of Islamabad, mostly operated by a handful bunch of sincere US based Pakistanis for whom giving something back in return means more than just handing out charity.``

Now please explain to me where and how would we produce ``rich human expertise and Intellectual capital`` unless someone invests in the education system of the country. The multinational corporations will not invest in education is theird world countries for two reasons:

1. They want to keep the knowledgebase to themselves (I have no problem with that).

2. They plan on moving to next cheapest country of production (production is a comprehensive term) just as the opportunity strikes, so why invest in local population. ( I have problem with that).

Now please tell me why would local indegenous government invest in a particular field of higher education e.g Electronics when they cannot even pridct where this filed would be in the next five years.

The horrible effects of this trend is showing in the Pakistani education sector, where now 75% of the post graduate students are females. Out of these 75% hardly 5% join the workforce, rest get busy in increasing the population. The half of 25% male students graduate from universities like Jamshoro and NED and they cannot even compose a letter in English. Because of the lack of any labor laws and regulating authrities every memeber of male workforce want to immigrate to Canada.

So the lesson is that had we strengthened our indigenous industries, improved labor laws, and standardized manufacturing this talent would have not gone to waste. And this takes us back to square one i.e. this vicious circle starts because local governments do not take interest in the development of human capital and the reason they do not do that is because they can`t predict.

Dear Urstruly:

This article is not about International Trade or mercantile trade. Free trade is a concept for transfer of raw materials and resources. This article is about knowledge and nobody is suggesting the transferring knowledge based inside Pakistan to outside Pakistan. On the contrary, the transfer of knowledge that is talked about in the article is about knowledge transfer from outside Pakistan to inside Pakistan.

{I would agree with Masadis thesis.} I am sorry but Masadi has no thesis, except for using weapons of mass deflection from the subject matter.

{It is common sense that, …Free trade is a death sentence for indigenous industry in the third world. } Agreed, and none of my post on this subject would suggest otherwise.

{I do not want to use heavy jargon of economics and trade, but this common sense observation must be obvious to all.} You must start appreciating the nuances of the modern world of complex trade theories, etc. to become some sort of commentator, don’t you think?

{The West still has the hold on manufacturing and engineering but they need cheap labor along with cheap raw material.}

This is true and so yester year’s thought, and not an issue with this article, to say the least. We are discussing knowledge, which needs to be developed inside Pakistan, and selling of this knowledge to the Pakistani design houses.

{Only a third world country can provide both.} Design houses should not and does not provide the cheapest labor. At the least, I hope not.

{All the manpower associated with production….costs by using crude work ethics and draconian labor laws (or no laws at all) to meet the competition. In that case domestic market forces become even more irrelevant and people are left without any buying power.} Agreed for the most part, but what has this got to do by building a knowledge based society of engineers, eh!

{It is a vicious circle which brings on lawlessness, anarchy, and death; as this circle has started to rotate in Pakistan. } Urstruly, where are you going with your thoughts?

{For the country of the size of Pakistan free trade is a death warrant; it must be avoided like a plague.} Yes, and nobody is suggesting that. Who in their right mind has suggested that?

For several months, you have read my posts on the subject matter, and have you ever found me suggesting the notion that Pakistan should be out in the forefront of free trade? But, free trade is only an issue with mercantilists in mind.

Do you consider that knowledge based transaction can be construed as free trade?

Respectfully submitted,

Urstruly: You get the Second Prize (after Masadi) for being the Last Stalinist on Earth. :-)

You write It is the role of governments and policy makers to protect these industries from external forces.

All the ``intellectuals`` were saying this until about 30 years ago. Now, they have changed their tune - based on experience that ``infant industries`` refuse to grow up; based on the experience with ``naukar shahi``, as was evident when Bhutto killed the nascent Pakistani banking system by nationalizing it - and overnight, bank employees changed their attitude from one of customer service to one of ``naukar shahi`` where they took your bank deposit as a favor to you (after they had their cup of tea, like good public servants). The indian economy was stuck at 4% growth rate as long as they followed your recipe - and took off only when IT came in and public servants didnt know how to get their arms around this type of an industry. The entire Soviet Union collapsed after 70 years of misleading themselves and the entire developing world with talk of the evils of capitalism.

Re: # 35

There is a difference between nationalization and policy making role of the governments. If the experience of nationalization has failed (which is still debatable) then it does not mean that we should abolish a government`s policy making role as well. These are two different animals.

If you read my post again I am suggesting that for the country of the size of Pakistan local market forces must dictate the kind of industry that need to be established. For example, Pakistan is a hot and humid country, and it always has been, but an indegenous airconditioner industry did not evolve until very late in `80s. Was Pakistan not hot before `80s or were there not many a/cs being sold? No, in fact, the demand was already there but anti-Pakistan government policies were not conducive to establish a local industry. Similarly, Pakistan produces best and world class textile products along with textile products that were affordable by the lowest echelon of the society. The local market forces were dictating the price, henece, making it affordable. The competiont was cut throat and there was no question of monopoly. Hundereds of thousands of families were connected to textile business at all level. It was a self sustaining economic engine untill government policies allowed inferior textile products, especially from India, to be dumped in local market. The people were told that they will get even cheaper product but opposite has happened. Even with this mindless dumping people cannot buy clothing anymore because they (more and more textile related workers) are out of work and hence lost buying power.

Therefore, I am for a very aggressive government role in policy making in conjunction with local Chambers of Commerce and Manufacturer Associations. The only way a foreign product could be allowed in the country is when its manufacturer establishes a manufacturing facility in this country and preferably in collaboration with a local manufacturer.

See, the problem in West is different from us. Almost all Western countries have a negetive population growth rate. They do not have enough human resources to make their industrial engine work. It is their compulsion to take the manufacturing elsewhere, but the challenge for them is to always stay on top as well. Therefore, they want weaker labor laws, environmental laws and minimal govermnet interference on part of third world countries. So that they can get their products made cheaper. They sugarcoat this attrocity with words like ``free trade``. This vile plan of theirs, which they enforce through WTO dictats is going to make third world a dump of misery and lawlessness. If the recent wave of global terrorism, and emergence of leftist governments in various parts of the world is not the signs of global sedition against this attrocity then what is?

I would agree with Masadis thesis. It is common sense that, for developing countries, the internal market forces rather than external must drive the kind of industry that needs to be established. It is the role of governments and policy makers to protect these industries from external forces. Free trade is a death sentence for indigenous industry in the third world.

I do not want to use heavy jargon of economics and trade, but this common sense observation must be obvious to all. The West still has the hold on manufacturing and engineering but they need cheap labor along with cheap raw material. Only a third world country can provide both. So a western business concern opens an industry in a third world country; they manufacture the product while looking for still cheaper raw material and labor and as soon as they find it they move over to next third world country. Now even though the first third world country has the technology, trained manpower, and raw material but now it cannot compete with the second. Now it doesn`t have a domestic or international market. All the manpower associated with production at all levels goes out of work. Unless the local government or manufacturer slashes its production costs by using crude work ethics and draconian labor laws (or no laws at all) to meet the competiotion. In that case domestic market forces become even more irrelevant and people are left without any buying power. It is a vicious circle which brings on lawlessness, anarchy, and death; as this circle has started to rotate in Paksitan.

For the country of the size of Pakistan free trade is a death warrant; it must be avoided like a plague.

behram #29: I think you an important point in noting that the Days of just being cheaper are over. I think it is true only to the extent it applies to direct labor - Technical advancements (notably factory automation, increasingly intelligent computers) in due course will basically eliminate direct labor costs as a significant factor of production. And in that sense the low labor costs of developing countries become irrelevant. However, until that happens in any significant manner (perhaps several years or decades from now), there is room for Pakistan to make its low cost labor in specific areas work to its advantage. And, I think there will be increasing scope for private initiatives in future, just as there will be for a hard-working and intelligent labor force where Pakistanis are second to none when given the right environment and opportunity.

Re: # 33 by tahmed32 on September 5, 2006 10:00am PT

Dear Tahmed32:

Just a difference of opinion as regards to Pakistani engineers and their design houses. Why in the world should I promote my country`s best engineers at the cheapest price? If Pakistan can produce the best engineers, then their price is irrelevant, is it not?

In this global economy, the efficiency is already being built in, that the technical world needs the best brains, and not the cheapest brains. And that is where Pakistanis are.

Respectfully submitted,

behram #27: thanks for responding to mr. masadi`s usual rantings. He does get a medal though for being the last Stalinist left on earth, a man who thinks entrepreneurship is a western conspiracy. :-)

aslam #24 I had heard of the road financed by local businessmen that I mentioned, but didnt know of the locally financed airport as well. I am not up-to-date on the local economy in Sialkot, but it seems they will probably have a dry port in Sialkot once the airport is built - rather than having to send their goods to Lahore.

Here credit must be given I think to the present government for stepping aside and letting local entrepreneurs do what government agencies like PWD, i.e. the Pakistan Works Department, better known as Plunder Without Danger :-) failed to do in the first few decades after independence. Also, I think local self-government helps - since I cannot imagine traditional DCs allowing locals to buying the motorbikes I mentioned to the police!!

Sialkot of course has a long-standing tradition of private entrepreneurship - back in 1952 my father visited UK and while there purchased some surgical instruments requested by his sister-in-law in Pakistan who was a doctor. After the purchase, he was surprised to see that these were made in Sialkot!! This was over 50 years ago! There are other centers of manufacturing coming up in Pakistan too of course (Gujranwala, Chiniot in addition to Karachi and the coastal areas). I think what they all have in common is their reliance upon the basic skills and industry of the average Pakistani. This is where individual Pakistanis do indeed ``stand high and tall” (to modify and make applicable the phrase that was ironically stated in the article above).

Re: # 21 by Charlie on September 5, 2006 5:33am PT

Dear Charlie,

Great post indeed. I agree with most of your points in the post, and would like to keep GOP at an arms length. I do agree with only the design house concept, but for that to materialize we need extensive educated workers in the electrical engineering profession. This requires political stability for the workforce to be developed in a rapid way. Getting young engineers by the time they are 22 years old, is a tall order for the disruptive Pakistani society.

And here is the hiccup, I see

Your point 1. {It should be multinationals doing this work (if they realize that it is cheaper to do this thing here.) }

Days of just being cheaper are over. Dell is bringing its call centers back to the US, because there is a huge cultural disparity. Pakistan has to contend with political image crisis that can only be removed if they hire political lobbyist in the US, in Capitols of every major US States. Commerce is a state issue, where multinationals usually resides. It seems that paindoos in Islamabad have yet to realize that.

Charlie, on your point #2, software is secondary to the primary function of making the chip, and this vertical integration is all but impossible. For example, Johnson Controls has taken over the controls market by providing everything to the extent of providing their controls software education. Penetrating such a market is almost impossible.

On your point #3, I disagree to the extent that lying and deceiving should not run a society. This is of course more of the government policy issue, which could hurt the already tarnished Pakistani image.

On your point #4, you are banking too much on those who have money and who are unscrupulous. I would never allow those who have money to run the show, when it comes to high level knowledge based industry, like design houses. Yes, they can be investors, just like any venture capitalists are. Personally, I believe that those in Pakistan who have money are not much better than the government.

I agree with you that {I don`t expect anything more from government.}. I would just add that I should not expect more than money from the Sethias. Their ill-gotten money could jeopardize the whole nascent technology sector of Pakistan.

On your post #5, I agree wholeheartedly, as was suggested in one of my earlier post.

Thank you for such an enlightened post.

Respectfully submitted,

I personally liked the posts of Behram, tahmed and aslam... Quite a positive approach...

Re: # 29

Dear Behram,



Here are again some comments about your post.

>> do agree with only the design house concept, but for that to materialize we need extensive educated workers in the electrical engineering profession.


Right... I agree... But I don`t think that it is very difficult to do... For fresh engineers to work in design houses, they need to know a little basics of digital design, hardware architecture, modeling in hardware, coding in C/Assembly etc.. Which they already do at universities in Pakistan.
For a little better start, they need to know embedded operating systems, ASIC/FPGA designs, System level design and understanding the design flow... It can be covered in a couple of new courses. So, I don`t think that at courses level, we might have some probelm generating good people. (Because of my background in Academia, I have a lot of friends currently teaching /planning to teach in Pakistani universities. And If I suppose that if I wanted to start a design house, it will be the least important thing for me to worry about the courses as I could easily ask them to teach whatever I needed. Or I can even deliver lectures once a week in my university to attract the most talented engineers to work in my design house.)

Yes, if we are talking in terms of numbers of engineers because of the opinion that the number of good engineers is the bottleneck for the number of design houses in the country, then we probably need to open a few more universities related to engineering which they are already opening... (Quality of engineers will have to be compromised in that scenario however.)



>>Days of just being cheaper are over. Dell is bringing its call centers back to the US, because there is a huge cultural disparity. Pakistan has to contend with political image crisis that can only be removed if they hire political lobbyist in the US, in Capitols of every major US States. Commerce is a state issue, where multinationals usually resides. It seems that paindoos in Islamabad have yet to realize that.

Perfectly agree...


>>On your point #3, I disagree to the extent that lying and deceiving should not run a society. This is of course more of the government policy issue, which could hurt the already tarnished Pakistani image.

Right... I agree..
We will discussPakistan`s image someother day whch I think is not a big reason for lack of investment...

>>On your point #4, you are banking too much on those who have money and who are unscrupulous. I would never allow those who have money to run the show, when it comes to high level knowledge based industry, like design houses. Yes, they can be investors, just like any venture capitalists are. Personally, I believe that those in Pakistan who have money are not much better than the government.


Yes, I was talking in terms of Seths taking the roles of investors and venture capitalists... It is the duty of educated Pakistanis to educates seths and show them that more profitable ways of earning exist in the world.

Even if Seths don`t understand, Venture Capital companies are already opening up in Pakistan and venture capital companies from west can prove to be even more helpful.

We really don`t needs Seths to make things working if they find our proposals bad.


It is always interesting to discuss the things with someone who understands what you are talking about. It rarely happens on chowk and never happens on other sites... :)

Now I can see some people trying to play the roles which are ``bigger than themselves``. Only way for them to become developed is to bulldoze capitalism and make a new ``ism`` to be successful... Isn`t it a difficult way to reach to a relatively easier target?

Re: # 40

May be, I was not that much clear in explaining relationship between industry and academia... (My example was very rough.)

Being more precise, university and industry should go side by side. If Industry is complaining about universities not doing enough, it is infact pointing to its own weakness.

Industry should have good terms with universities and guide them to generate professionals according to their needs. Smart software houses often have good contacts with faculty members and pick up good graduates as soon as they come out of university or even start their final year projects.
On the other hand, Fan makers in Gujranwala are always complaining that they have unresolved issues or they are not having any change in their state since last 30 years. Reason is simple... If you are smart industrialists, you keep your influence in the university and provide constant feedback to the academia guys. If you are not, then you complain...

The attitude of landlords in multan, as mentioned by tahmed, is attitude of so many people among us. This attitude is reinforced, when we don`t see so many positive examples around us... Some exceptional people set examples, rest of them follow them and then it becomes a culture...

Re: # 43 by Charlie on September 5, 2006 1:29pm PT

Dear Charlie:

Ignoring some of the rubbishes around here, we can definitely continue in evaluating what Pakistan can do to enhance its drive for modernization and ``taraqui.``

I recently read that US spends about 0.5% of its GDP on R&D. I have no idea, what percentage of GDP does Pakistan spend on it`s R&D. Do you? Could Pakistan, as a society afford spending 0.5% of its GDP (around $100B) on R&D? I doubt that paindoos in Islamabad would want to do such a thing.

Respectfully submitted,

behram writes <<< Get off you high horse, PLEASE. >>>

Facts bother you, I can understand that, you want for people in the developing world to keep busy with pipedreams that will never amount to much unless the big picture is taken into account, I can possibly understand that also given that you are a house slave but the totally devoid of facts post that you just did in trying to rebut my post, reminds me of the mirasi bskhan on here. Such a post was unexpected, even given my low expectations from a dimwit like your good self.

Respectfully submitted,

For those who want to read the entire reports that I quoted from, here are the links

Quote 1


Quote 2

What the author looks over, and what is fundamental to any industrial base developing in the ``Third World`` countries, is that the world system is rigged in favor of the developed countries, the countries that developed an industrial base on maximum protectionism themselves while using their global clout today to force unfair trade practices on the ``Third World`` that lead inevitably to economies dependent on either primary products or cheap assembly points, neither of which help with either poverty alleviation or development.

Let me quote a few excerpts from an Oxfam report on trade

(quote) ``Virtually all of today’s developed countries built up their economies using tariffs and subsidies (and many other measures of government intervention) throughout the 19th century and most of the 20th century (in particular, until the early 1970s). Throughout most of the period between the 1820 and 1945, the United States maintained average industrial tariffs at around 40 per cent, and never below 25 per cent except for brief periods, far higher than those it xii accepts from developing countries in the NAMA negotiations today. Five of the six fastest growing developed countries in the so-called ‘Golden Age’ (1950-73) were high tariff countries (Japan, Italy, Austria, Finland and France).

Double standards are thus rife when these countries preach the virtues of free trade and free markets to today’s developing countries, many of which in fact have tariff rates lower than those that prevailed in today’s developed countries at similar levels of development....The numerous success stories among developing countries over the last 50 years, from the Republic of Korea and Taiwan Province of China to more recent examples in China, India and Viet Nam, show that, while some trade liberalization may be necessary and beneficial, infant industry protection is vital in the early stages...`` (end quote)

Also consider the hypocrisy of the West in the tariffs they place and the dumping that takes place in the manufacturing sector on which most developing countries that venture out of raw materials are involved in:

(Quote)`` Exports of textiles and clothing are a vital source of employment and income for developing countries. Under the Multifibre Arrangement, rich countries used quotas to restrict entry of these goods to their markets....Exports of textiles and clothing to industrialized countries face average tariffs that are three times higher than for other manufactured goods, as well as sharp tariff peaks of up to 40 per cent for certain items. These taxes represent a perverse redistribution of wealth from poor to rich countries. In 2001, exports from Bangladesh to the United States generated $331 million in tariff revenue for the US Treasury; in the same year, net US aid to Bangladesh was just $87 million. WTO negotiations over industrial tariffs (non-agricultural market access, or NAMA, talks) are supposed to address this problem, but are currently stalled. Tariff reduction offers from the EU and USA are too modest, and are tied to unfair demands for reciprocal liberalization by poor countries.`` (end quote)

Note that tahmed and co, those who want to keep the developing countries forever dependent on their ``Anglo Saxon`` lords and masters, will preach about private endeavor and entrepreneurship, knowing full well that without state intervention no base will develop and when no base develops no entrepreneurship will ever amount to anything. Now if these developing countries were to develop will that affect the balance of power and wealth that the first world now enjoys due to their monopoly exclusion of the majority world. You bet they will, will they allow that to happen? Of course they will not, regardless of the good intention that tahmed and co attribute to them. That would be like Walmart declaring bankruptcy for no reason just that Target or K-Mart capture its market. Thus, the only way forward for countries of the ``Third World``, developing countries is to detach, withdraw from the economic system imposed by the West on them, and move forward together, until par is reached, and then engage the West on equal terms. Other than that, semiconductor or no semiconductor, development for developing countries are mere pipedreams.

Re: # 25

masadi:

`` In 2001, exports from Bangladesh to the United States generated $331 million in tariff revenue for the US Treasury; in the same year, net US aid to Bangladesh was just $87 million.``

how much revenue did it generated for the bangladeshis? any idea.

Re: # 25 by masadi on September 5, 2006 8:07am PT

Dear masadi:

Can you not resist by not interjecting your worthless opinion, where you do not belong? I was getting ready to respond to Charlie post #21, when on refreshing my screen, I saw your stupid post, and of course, as usual you brought in all those irrelevant issues.

So, let us clear this garbage thrown by your post.....

{What the author looks over, and what is fundamental to any industrial base developing in the ``Third World`` countries, .....assembly points, neither of which help with either poverty alleviation or development.} FYI, semiconductor industry is not considered as industrial base industry.

Then your rubbish post brings in the issue of high tariff....

{Five of the six fastest growing developed countries in the so-called ‘Golden Age’ (1950-73) were high tariff countries (Japan, Italy, Austria, Finland and France). }

In this particular issue tariff was not even discussed. Nowadays, large corporations move products as unfinished goods, and most of the time tariffs never becomes an issue. Would you know any difference?

{Double standards are thus rife when these countries preach the virtues of free trade and free markets to today’s developing countries, ....}

And where has the author talked about advantages or disadvantages of free trade?

{Note that tahmed and co, those who want to keep the developing countries forever dependent on their ``Anglo Saxon`` lords and masters, will preach about private endeavor and entrepreneurship, ...... }

O! you just SHUT UP?

{Thus, the only way forward for countries of the ``Third World``, developing countries is to detach, withdraw from the economic system imposed by the West on them, and move forward together, until par is reached,.... } Yeah, Right! So the third world countries can feed other with crap, as you are doing with your tirade against the west, eh!

Get off you high horse, PLEASE.

Respectfully submitted,

Great article. The structuring of the article around the different stages of in the semiconductor lifecycle makes it a very informative article. The future is indeed (as in the famous movie phrase)...plastics. Or semiconductors, in this case. This is something those involved in OPEN should probably dedicate some seminars.

I am very optimistic that we will see Pakistan moving forward in such areas. And semiconductors could well be a promising area.

The key is to encourage a culture of entrepreneurship in Pakistan. Charlie #21 mentions the Sialkot seths - in this connection, a few weeks ago I heard a US-based Pakistani who had recently interviewed local businessmen around Pakistan, and he had something to say about them as well: On going travelling to Sialkot, he was struck by the high quality of roads and the excellent traffic control by motor-cycle riding cops. On interviewing the local businessmen, he was told that after giving up on the government, they had pooled resources to finance the road (necessary for their export-based industries) and then pooled some more money and bought the local police the motorbikes!! This was entrepreneurship at work. Then he went to Multan, center of landlords in the panjab. He was told by the local businessmen of excellent opportunities for planting fruit trees - and they asked him to ask the government to invest money in it!! He responded by asking why, if profit-making opportunities existed, they did not invest themselves. They had no answer. But he knew the answer, he told us. It was the ``landlord culture`` of that area. Which, in contrast to Sialkot, has created a culture of dependancy.

Re: # 23
tahmed, i would agree with you about sialkot, the businessmen there are also building a airport in the private sector, most are honest there are few rogues, i was defrauded by one. on the whole i think north¢ral panjab are years ahead of southern panjab&rural sindh. i think one reason is there has been a massive migration overseas from north¢ral panjab which has led to prosperity.

It is my understanding that idea of an idegenous semi-conductor industry was abandanoned by planning commission sometime in early to mid-90s. In the 80s Japanese invested heavily in education sector to promote Electronics engineering at Polytechniques and university level. As a matter of fact the Electronics Department in Dawood College of Engineering won a Center of Excellence Award from Japanese Government. At that time Afghan war was in progress and US government was forcing its allies and corporations like Sears, Walmarts, and such to invest in Pakistan. Of course the minute the war ended everybody took their business elsewhere. Japanese stopped funding and a semi-conductor research institute either in Islamabad or in Wah ( I don`t exactly recall, had to be shut down).

The semiconductor technology is machine intensive, whereas design part of it requires highly educated and skilled workforce. Pakistan lacks in the latter, and it cannot be done without govt involvement in developing dedicated education institutions. Corporations just wont do this.

Dear Imran Mustafa,

Very good article indeed. The way you have explained us the basic of semiconductor industry simple language, I just loved it...

Here are a few points I will like to mention:

1. Government run organizations are inefficient, politicized and hence not really growth oriented. A Fab is going to meet the fate of the steel mills if established by government. We should not expect government to take the initiatives. It should be multinationals doing this work (if they realize that itis cheaper to do this thing here.)

2.There is still more money in software. Even in embedded systems i.e. PDA, mobile phones, GPS, MP3 etc., more money is spent in software develoment.

However I don`t mean by this fact that semiconductors shold be ignored. With the evolution of Mems, Nanodevices, biochips, we are going to have very long term benefits from a basic investment made today.

3. I have a few chinese colleagues of mine who often talk of Semiconductor industry setup in beijing. No IP protection, no business ethics, designs are copied using brute force techniques like copy attacks against digital watermarking and much more... Yet still, they are on top of semiconductor industry.

I think it is the same seth sahib`s approach as you were portraying... It might have started as a chinese seth buying a couple of test machines, then the other seths seeing the seth earning more money bought their own machines and the culture flourished to an extent that now they have silicon foundaries, design (rather copy/paste) houses and much more...

It is all about making it part of the culture.

Just like the way , Seths in Sialkot know how to get orders for football stitching... Now, let`s say some other country looks at sialkot and tries to establish a football, surgical instruments and jackets. they will not be do it. As it takes time for develoment of culture... (I believe Sialkot can be a good place for electronic biomedical instrumentation.)


Role of the government can be buying a few machines, setting them up at polytechnic institutes so that workfoce for machine operators can be made available, arranging a few exhibitions at local industrial markets presenting a couple of business plans and that`s it. Smart Seth will see the oppuruity and grab it first. Rest will follow.

I don`t expect anything more from government.


5. I am ,personally, if I ever become an entrepreneur, inclined towards design houses. They are intellectualy challenging and professionally satisfying. No need of extra large investment and returns are good.

``#19 by injundollar

As long as our cities infrastructure, roads, streets etc. remain under the control of babus, municipalities etc, there is no hope.``

The problem is more intricate than that. A whole parallel politico-economic ecosystem has been built around the delivery of public services by our netas since independence. No economic activity can take place without their hand in it. The aim of the system is to raise funds for personal enrichment & political activity. Essentially a political ponzi scheme.

Go to a govt. office and if the bribe is higher than what you expect to pay, the standard answer is ``what to do, we have also paid (the politicians) to get this posting and we have to recoup the money``. That about sums up the problem

It is going to take years, perhaps decades to untangle this cobweb.

#17 TVARD

//But walk out on the street and you are back to the third world with a thud. //

As long as our cities infrastructure, roads, streets etc. remain under the control of babus, municipalities etc, there is no hope.

Ways are to be found how to free them from these white elephants who only suck public money into their belly and do just nothing.

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After spending 20 years in the U.S. I moved back to Bangalore 4 years ago. Here are some of my observations:

1) The reason why IT clicked was because the babus of two decades ago just couldn`t see value in software. Hence they couldn`t strangle the baby in the crib (to use Condi`s words). By the time they figured out the threat it posed to their absolute control of economic activity, it was too late.

2) India`s near banktrupcy in 1991 couldn`t have come at a better time. It helped loosen the stranglehold of the babus and Indian entrepreneurship exploded.

3) The policy of allowing a college to be opened in little more than a cow-shed actually helped India in producing enough techies to fulfil demand for them.

Today, you can walk into an IT office in Bangalore and you`ll be hard-press to see the difference between it and it`s counterpart in the West. But walk out on the street and you are back to the third world with a thud. It shows that the gating item is the political class for whom an elected office is only an avenue to make a lot of money. Moreover the barrier to entry for capable people in politics is extremely high which adds to the problem.

re #15

Chowk rates every interactor by an esoteric number called ``interact index``. If your interact index falls to 0, all your posts are automatically filtered. How the number is decided is known only to the inner circle. FWIW, most garden variety interactors have an interact index of 1. The ``special`` people like Ms. Versey and ferozk have interact indices of 4. Dunno if there exist any interactors with an index>4. If Ms. Versey is 4, I doubt the chowk powers that be can give a higher number to any other person.

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Without proper infrastructure base Semiconductor revolution will be just a pipedream.Chinese are hard to beat in terms of ingenuity and costs of production.As long as cheaper chip design options are available with countries like Taiwan and Malaysia anyone will think twice before investing here in Pakistan.If another rat race is started like IT, it`ll be a bigger blunder as there`ll be no industry to absorb these ``techies``.Till then FPGAs se kaam chala baba, Lagay dum mitay ghum.

India Concern to Design I.B.M. Chips
By SARITHA RAI

BANGALORE, India, Nov. 17 - I.B.M. announced an agreement Thursday establishing an Indian outsourcing company, HCL Technologies, as the first design center outside I.B.M.`s own walls for its Power Architecture chips.

The deal highlighted India`s growing role in the design of high-end chips. The country is better known as a hub for outsourcing of software development and comparatively low-end back-office work.

The agreement is also in line with I.B.M.`s plan to adopt a more open strategy in its microprocessor business by setting up design centers around the world to help customers in areas like wireless technologies, consumer devices and networking by developing customized chips.

At Power Architecture design centers, I.B.M.`s chips are tailored for products as diverse as Xbox game consoles, high-definition TV`s and pacemakers.

Traditionally, microprocessors like I.B.M.`s Power chips were optimized by shrinking the size of transistors and fitting more into each chip to increase processing speed.

But with newer, tightly packed microprocessors consuming more and more power, optimization in performance comes from adapting microprocessors to different uses.

I.B.M. has its own Power Architecture design centers here in Bangalore, and also in Israel, China, Japan, Switzerland and Germany besides the United States.

I.B.M.`s agreement comes in the wake of estimates that India`s semiconductor design industry is growing, albeit from a small base. The industry will triple by 2010, to about $1.72 billion from $624 million currently, according to a recent forecast by iSuppli, a research firm based in El Segundo, Calif.

``Outsourcing chip design to a low-cost center like India with a large talent pool is a trend of the future,`` said Jagdish Rebello, iSuppli`s principal analyst for communication systems.

As with other types of outsourcing, the availability of skilled, English-speaking workers at lower costs - design engineers in India are typically paid a fourth of American salaries - is prompting chip companies to expand in the country, aided by clearly drawn intellectual property laws.

``The mind-set about what is possible and what is not in India is changing and the country is becoming a development center for products, software and chip design,`` said Sham Banerji, head of software development for the Indian unit of Texas Instruments, one of the first multinational companies to set up a captive design center in the country.

HCL Technologies, India`s fifth-largest technology services outsourcing company, with $814 million in revenue, will pay a licensing fee to I.B.M. for its use of the Power technology and will split revenue with I.B.M. when the technology is sublicensed to others.

``I.B.M.`s goal is to make Power Architecture solutions as pervasive and open as possible,`` said Ron Martino, I.B.M.`s director of Power products.

The outsourced design center will be based in the southern Indian city of Chennai, a site with 25 employees currently. But company executives said this could grow into a 1,000-employee operation in two years, depending on demand.

The center will offer equipment makers a range of Power Architecture solutions, including sublicensing the Power group of embedded microprocessor cores. Indian companies have progressed in the value chain from doing back-end work to developing architecture, said S. R. Dinesh, program manager in Asia for the electronics practice of the Frost & Sullivan consulting firm.

India`s own domestic demand for electronics and consumer electronics is also growing rapidly.

The large number of companies setting up chip design centers illustrates the maturing of the industry in India. Nearly 125 chip design companies are now in India, mainly in Bangalore.

``Every major chip design multinational has set up operations in the country,`` said Poornima Shenoy, president of the India Semiconductor Association, a trade body representing semiconductor companies.

Ms. Shenoy said there was heightened activity, with semiconductor companies hiring as many as 1,000 graduates in India annually. Chief executives of international technology companies are routinely visiting, she said, ``and all this is an indicator that India has moved to the next level.``

The Indian development center of Intel, for example, has grown to 2,500 employees from 1,500 at the end of 2004. India is Intel`s largest design center outside the United States.

But India does not have manufacturing infrastructure, and experts see this as a drawback to a larger role in the chip design process. The nearest chip foundries are in China and Taiwan.

IEEE spectrum

Getting in on the Action

It was as if, during the final quarter of 2005, the top players in a high-stakes poker game had brooded over their hands for months or years and then, all at once, placed their bets. IBM, Intel, and AMD all announced major investments in Indian chip design. Cisco, not generally thought of as a semiconductor maker, anted up as well. And even Microsoft seemed to be moving in to take a seat at the table, should the pot get juicy enough.

A major development was the announcement in November that HCL Technologies, India`s top technology services firm, would do design work on IBM`s Power Architecture family of semiconductor devices—chips that are customized for diverse hardware products, including Microsoft`s Xbox game consoles and high-definition television receivers.

IBM already has Power Architecture design centers in Bangalore, as well as in China, Germany, Israel, Japan, and Switzerland, but this is the first time that it has outsourced such work. It`s expected that an HCL design center in Chennai (Madras) will grow from barely more than a couple of dozen employees at present to as many as 1000 within two years.

At the end of November, AMD chief executive Hector de J. Ruiz announced that his company would join a consortium and supply technology to build India`s first semiconductor plant, which is expected to cost about US $3 billion. Obtaining foreign investment in the venture, called SemIndia, was a high priority for the government—China already has close to 50 fabs—and relations with Intel soured when its chairman, Craig R. Barrett, dragged his feet. Not to be outdone, however, Intel announced on 5 December that it would invest upward of $1 billion in India over the next five years, more than it has spent in the country in the last decade.

Intel already operates its largest chip design center outside the United States in Bangalore, where it employs more than 2500. About $800 million could go for expanded R&D operations in India and $250 million into venture capital projects. Broadcom also has a thriving R&D facility in Bangalore and has announced it eventually will outsource production of chips for mobile phones to SemIndia. Its chief technology officer, Henry Samuele, said on a visit to India on 1 December that the performance of the company`s Indian teams had surpassed his expectations.