Freescale to add 1,000 jobs in India Comments: This message did not originate from the

Austin chip maker aims to tap the country's engineering talent, a trend among U.S. tech companies.

By Kirk Ladendorf AMERICAN-STATESMAN STAFF

Wednesday, March 08, 2006

Freescale Semiconductor Inc. said Tuesday that it will add 1,000 engineering jobs in India over the next four years as part of the chip company's largest job expansion in years.

The Austin-based chip maker has acquired a 300,000-square-foot business campus in Noida, a suburb of Delhi, that will become Freescale's technical headquarters in India. The company already employs about 500 technical workers in India ÷ in Noida and in a software development center in Bangalore.

When the expansion in Noida is completed, India will become the company's largest engineering center outside the United States.

Freescale's expansion is part of a huge boost in hiring for increasingly high-send jobs by major U.S. technology companies in India. Chip makers Advanced Micro Devices Inc. and Intel Corp. have announced major design centers in India. Last year, Intel and Cisco Systems Inc. each said they would invest more than $750 million on new research and development facilities in India.

It's a sign that the types of jobs going to countries such as India are evolving from relatively low-skill call-center positions to those that are much more advanced.

That won't necessarily mean a downturn for a chip-design hub such as Austin, said Vijay Mahajan, a marketing professor at the University of Texas and author of "The 86 Percent Solution," a book about doing business in developing countries. But it will be a challenge.

"There are many aspects in a design," he said. "The challenge to us is in terms of what aspects of design we do here and what aspects take advantage of the cost structure in developing countries."

Silicon Laboratories Inc., an Austin-based designer of cell phone receiver chips, began partnering with an Indian firm almost three years ago to handle some routine design processes.

Freescale joins Dell Inc. among Central Texas-based technology companies that are doing most of their growth elsewhere. Dell plans to open its fourth call center in India next month, and its payroll there is expected to hit 15,000 within two years. That's quickly approaching its employment total in Central Texas of about 18,000 people.

Although the prevailing wages are lower in India than in the United States, companies also say they are expanding in India to tap the country's plentiful supply of engineers and technical workers. In the United States, by contrast, technology companies say the talent pool of engineers is far tighter.

Chip engineering jobs have been migrating overseas in recent years. AMD launched a facility in April 2004. Intel already has about 3,000 design workers in Bangalore, according to The Business Times of Singapore.

Motorola Inc. long has had a significant presence in India, Mahajan said.

Freescale's existing engineering center in India has worked on a variety of wireless and portable electronics chips. The new center will work on designs for the company's three major business markets: transportation, networking and wireless equipment. The company expects to hire as many as 400 electronics engineers and other workers in India this year.

"This is an investment in talent to help us support the growing markets that we are going after," spokesman Glaston Ford said. "These are net new jobs to Freescale, and anything that helps make Freescale more compebreastive is good for workers across the globe."

The chip maker, which has more than 22,000 workers worldwide, operates more than two dozen engineering sites throughout the world.

The company's largest engineering operations remain in Austin and in the Phoenix area. More than 2,000 of the company's 5,400 workers in Austin are involved in engineering or research.

"Freescale is committed to investing in talent across our global design operations, and India represents a particularly attractive opportunity," said Sumit Sadana, vice president for strategy and business development. "We want to leverage the highly educated Indian work force and growing Indian market."

Freescale spun off from Motorola in 2004, and the company's new management has focused on improving profit by spending money carefully.

The company's total payroll is down by about one-third from the late 1990s, and the Austin operations employ about half as many people as before. But almost all those reductions were made before the spinoff in response to the global chip slump that began in 2001.

The company bolstered profit over the past two years by making its seven chip factories throughout the world operate more efficiently. Now the company is out to build sales, which means developing new chips.

"Getting the right products to market in the right time drives growth," Ford said. "Having design teams across the world puts you in better position to succeed."