The $10.35-billion STMicroelectronics, one of the world?s largest semiconductor companies, is maintaining an unwavering commitment to research activities. Having spent about 23% of its revenue into research activities, the company?with particular strengths in multimedia, power, connectivity and sensing technologies?is claimed to be one of the most innovative companies in tech circles. The India R&D centres at Greater Noida and Bangalore will continue to play a key role for the company?s technology R&D activities, says Didier Lamouche, chief operating officer (COO) and vice-chairman of STMicroelectronics? Corporate Strategic Committee. Lamouche, who holds a PhD in semiconductor technology, has more than 20 years experience in the semiconductor industry, holding various senior operational and general management positions at Philips, IBM Microelectronics, Motorola, among others. In a recent interaction with BV Mahalakshmi, he predicts that semiconductor consumption in India will explode in the coming years. Excerpts:

What is your strategy for the overall growth of STMicroelectronics?

In 2010, we have captured a huge potential coming from product portfolio repositioning, focused R&D execution and manufacturing and cost restructuring. Indeed 2010 was a record year and we have met or exceeded almost all of our targets, managing a strong turnaround. We are now ready to further capture our potential, driven by the new wave of products? innovation and expanded customer base, all these naturally includes turnaround as well. A continued focus on innovative products will boost margin expansions.

However, we are facing three headwinds. The first is the euro/dollar rate: we are less vulnerable to its volatility than in the past which we are taking actions to react and mitigate its impact. Second is the present business situation of our largest customer, which is currently impacting ST-Ericsson and ST. And lastly is the disaster in Japan. There is a negative short term impact to revenues in 2011. Overall, despite these headwinds, for the remaining part of 2011, we see solid growth driven by our analog and micro-electrical mechanical systems (MEMS) offering, power discrete and digital consumer products.

Are there any new semiconductor products in the pipeline?

Indeed, this is the year when we will start production of some breakthrough products such as application specific integrated circuit (ASIC) system on chip for 3D and internet connected TV, advanced display port products, complex power 32-bit micro-controllers for automotive applications and a new family of motor controller technology for computer peripheral applications. Besides, a wave of new products/new families will hit the market this year, which include active microphones on MEMS technology, advanced analog system solution for touch sensing applications, near field communication security solution, a new generation of smart grid products. All these new products are addressing the requirements of the four application areas.

What are your plans towards energy saving solutions and the market opportunities you want to capture?

Energy saving solutions are a priority area for STMicroelectronics. We have a broad range of products in the area of power applications including power discreet products, smart power products, intelligent power products and also micro-controllers and analog products to control the flow of energy. ST has also developed solutions for alternative energy application such as solar panel. These solutions are very innovative. We have developed micro inverters and specific integrated circuits to optimise the flow of current from solar cell which in itself is an innovative solution. In fact, we are the first in world with an integrated solution for this purpose. In this concept, for example in a solar panel, there is always a possibility to maximise the energy or the flow of the current from the panel by excluding the blocks of panels that are not efficient either because they are not exposed to the sun for any reason by using the power tracking device.

There is another area where we also contribute greatly to energy saving and that is in the automobile. We are intensely working on the electrical vehicles to minimise the consumption of fuel and it is also a new technology for hybrid and electrical vehicles.

Any plans of setting up a manufacturing plant in India?

No, we don?t have any plans to set up manufacturing units in India in near future. I think the motivation and the programme we have for India has two major focus. The first is to expand our R&D efforts. In the last three years, we have increased from 1,500 employees to 2,200 employees in India. We expect to continuously grow in future, so this is a first block of priority and the second area of focus is to grow with the Indian market. We want to march in an accelerating way with plenty of new application offerings and establish partnerships with the local customers and grow with them.

Portable healthcare devices and home diagnostic is an emerging market. How do you see the competition and demand?

It is indeed one of the major areas of focus of STMicroelectronics. I would like to divide these products into two categories. We have broad semiconductor suppliers and plenty of products that are suitable to the healthcare domain particularly all those products with a very low power like low power micro-controllers, low power analog products.

I would like to mention some of the most important solutions in the domain of the healthcare: Lab on chip, which is used to run DNA analysis very quickly is a very good device to detect virus and its competitive advantage is that it?s cheap and fast. Another fascinating product that we have introduced is pressure sensor for glaucoma. The challenge is that it is very difficult to track the eye pressure and what we have invented is very small sensor that is put inside the contact lens that can track the eye pressure for 24 hours.

Another product invented by ST is to track the cardiac disease. It can track the rhythm of heart, blood pressure, temperature and movement of the body and the information is transmitted from a smart super sensor to the phone which can be connected to any medical institution. The glucose sensor is yet another system which is in close loop to driving insulin micro pump for diabetes.

There are great opportunities to make healthcare more accessible or to improve the life of patients especially in rural India where majority of India population resides.

Do you see an increasing trend in outsourcing of designs to India?

Yes, over a period of time, we will be increasing our relationship with the Indian engineers. Presently, it is about 10%-15% and this would sizeably increase. However, the local demand in the country has to increase like in China. This would create a market for local designs. Besides, cloud computing will fuel the next wave for wired and wireless infrastructure thus serving the required opportunities.