"90 Percent of External Modems Sold in India Have our Chips"

Conexant Systems is a leading American semiconductor supplier focussed on
solutions for communication electronics. With revenues of $2.1 billion in fiscal
2000, Conexant has been providing solutions for a variety of wireless and
wireline voice and data products that power the Internet. It has opened its
Bangalore office recently. It has an application lab in Delhi. Conexant’s vice
president sales, Asia Pacific region, Dr Dennis Packard, talks to Sudesh Prasad
of Voice&Data about company strategies and future plans in relation to
India.

What is Conexant’s positioning as a semiconductor
company vis-à-vis its competitors?

We are one of the top 10 semiconductor companies in the world
and growing at the rate of 30%. In five years from now, we expect to be in the
top five. Intel is currently on a slower growth rate and is dominating the PC
business. We are planning to reposition ourselves by the acquisition strategy.
We have acquired close to 10 companies in the last one-year as they bring value
to our company, which helps us diversify into more products and solutions. We
are already focussed in the high growth segment of the semiconductor business.

How important is India to Conexant?

As of now, India is a very small market and it is less than
5% of our total Asia Pacific business. 90% of external modems sold in India have
our chips. The market is growing very fast, doubling every year. Five years from
now, it will be a significant market for us in Asian business. We have clients
like D-Link, ITI, HFCL, Microtek, HCL, BPL, TVS, etc., to name a few, and they
are working with us to develop products.

Don’t you think that the manufacturing base of
communication products, which use your chips, is very weak in India?

Yes, I agree that that was the case about 3 years ago. 50% of
modems sold in India are manufactured locally. Today, there is significant
investment happening in the manufacturing industry. There are a few companies
who are talking to us and who want to go in for manufacturing IP related
products.

Are you looking at acquisitions in India?

Well, globally we have acquired about 10 companies who had carved out a niche
in different segments. In India, we are looking for companies that are on the
cutting edge of technology. There is no one that I can point out now.