The success of NXP Semiconductors in India
"*" indicates required fields
In 15 years, the Dutch chip producer NXP Semiconductors has grown into one of the largest chip producers in the world with a turnover of over 11 billion dollars. The R&D division in India plays a crucial role in this, says Sanjay Gupta, VP at NXP. “We have 650 patents in our name.”
Sanjay Gupta (in blue)
Largest R&D hub
NXP has 4 R&D offices in India. A total of more than 3,000 people work there. The different locations focus on specific markets. In Noida, near the capital Delhi, they design hardware and software that is used in the next generation of microcontrollers and microprocessors for the automotive and edge computing industry, in Bengaluru the focus is also on the IoT and security markets, in Pune on connectivity solutions and in Hyderabad on software solutions for the communication and infrastructure market. “India is NXP’s largest R&D hub,” says Gupta. “And is also considered one of the most innovative hubs. We have been able to add more than 650 patents from India to the already impressive list of NXP patent families.” According to Gupta, this once again underlines the quality of Indian engineers.
Corporate culture in India
Gupta himself as an engineer from a leading university in India. “Twenty-six years ago, as a recent graduate, I was offered a job at this great organization. I was fortunate to have multiple opportunities to grow and excel within this global company and was mentored and supported by NXP’s leadership every step of the way, moving from one challenging role to the next. In 2016, I was given the most challenging opportunity to lead NXP India, as the company merged with US semiconductor maker Freescale. Examples like my career within NXP are a huge motivator for our people, knowing that everyone has the opportunity to develop within the company.”
NXP’s Senior Leadership Team is actively working to create a family culture across all locations. “It’s also good for business,” says Gupta. “Despite our teams in India being literally miles apart and focusing on different products and markets, we encourage collaboration between departments as much as possible. We notice that when we bring different disciplines together, they learn incredibly well from each other and often come up with new ideas or solutions for their own segment.”
Ease of doing business
According to the India vice-president, companies that are still unsure whether India is the right location for their R&D department should now seize their chance. “There is a huge amount of talent in India and as a company you don’t have to worry about the quality they can deliver. Moreover, doing business in India is becoming easier, just look at the enormous leap that India has made in the past 5 years on the World Bank’s Ease of Doing Business list. In addition, the government is investing heavily in the development of industries such as the manufacturing sector and the chip industry. No wonder that India is becoming increasingly popular with foreign investors.”
Tax benefits
In the 2022 budget, the Indian government announced that it would extend the tax benefits that apply to international companies that set up a production site in India. In addition, major investments will be made in the chip industry, the automotive industry and infrastructure. According to Gupta, this offers interesting opportunities for European companies. “If you want to successfully enter the market in India, you need a long-term vision. That is why you should not only consider setting up your R&D here, but also investigate the production possibilities. That way, you can benefit from the current stimulus measures and be agile and prepared to respond to the rapid developments in Indian society.”
Competition is increasing
Gupta is not worried about the potential competition for NXP now coming to India due to the favourable business environment. “First of all, I think competition is healthy for any business because it makes you more focused and efficient. Also, at NXP, we are so diverse, we have talented people and the markets we operate in are developing so fast, that I expect that we will significantly increase our revenues in the next five years. Take the automotive industry, for example, one of our key markets. We are currently working on exciting innovations and solutions for electric vehicles, infotainment & connected cars and autonomous vehicles, with a focus on improving the customer experience. This sector will continue to evolve in the coming years.”
India is at a turning point
The MD admits that these advanced technologies may not yet be 100 percent aligned with the current needs of the Indian consumer. “But make no mistake, India has a population of over 1.4 billion people, half of whom are under 35. This rapidly developing country has a growing middle class and rising income levels, creating huge business opportunities for international companies if they dare to seize the opportunity to invest in India and be part of this ‘journey’. India is known for embracing new technologies and solutions at an exponential pace, once they are affordable. For example, India is the largest two-wheeler country in the world. Every year, more than 20 million motorcycles and scooters are produced for the Indian market. The number of internet users is also a good example. It has increased by 800 percent in 10 years. Online payments or shopping were still very unusual a few years ago and have now become commonplace. India is at an interesting turning point that companies should take advantage of.”
