Broadcom said on Thursday it will expand its operations in India with a new state-of-the-art research and development facility in Bangalore that will house 200 employees.

The $2-billion fabless semiconductor maker did not say how much the facility would cost, but the announcement represents a sign of long-term commitment. Broadcom began its operations in India in 1999 through its first-ever acquisition, a 30-person Indian firm called Armedia.

India is also growing as a market for Broadcom, especially for the Irvine, California-based company’s mobile phone chips. The cell phone market in India is growing rapidly. Entry barriers for foreign players are coming down and call rates are dropping, as private and public sector companies vie to attract more customers.

Shares of Broadcom were up $0.84 to $47.36 in recent trading.

For Broadcom, whose Indian engineers primarily work on set-top boxes for TV sets, networking infrastructure, and wireless products, the market is where its employees are.

Broadcom’s most recent expansion in Indian engineering talent came in October 2005 with the acquisition of Athena Semiconductors, a developer of semiconductors for mobile digital TV tuners and low-power Wi-Fi. Broadcom added about 40 engineers in India by acquiring Athena.

Engineers from the Athena team in Bangalore will help Broadcom oversee the development of the next generation of wireless local area network (WLAN) solutions for the low-power embedded segment as well as multiple input multiple output (MIMO) technology, a technique for boosting wireless bandwidth and range. 

Of Broadcom’s total portfolio of more than 1,000 patents, the India center contributed 150 or so, according to Broadcom India CEO Rajendra Khare.

“The R&D center in India has developed some mission-critical system-on-a-chip (SoC) designs,” said Henry Samueli, Broadcom’s chief technical officer. “The knowledge and domain expertise demonstrated by the team in India has definitely surpassed our expectations, and we expect that this will continue in key growth areas in the future.”

Outlining his vision for India, Broadcom CEO Scott A. McGregor said,“India is an exciting destination for mobile communications in the world. As an active player in the communication convergence revolution, Broadcom will continue to invest in the R&D facilities in the country.”

Leveraging India Talent

Part of this investment comes in the form of a program designed to support PhD fellows at Indian universities. The Technovation Initiative, backed by the India Semiconductor Association, will promote education and research in the area of semiconductors.

“University programs are a long-term initiative, but companies have to do it to keep the flow of talent into the industry,” said Mr. Samueli.

Asked if they had a challenge finding the right talent in India because of a growing number of semiconductor design companies setting up shop in the country, Mr. Samueli said that finding good people was a challenge everywhere in the world.

Intel rival Advanced Micro Devices has also been working in India, and said Wednesday that it planned to set up a manufacturing plant in India in collaboration with SemIndia (see AMD Helps India Build Chip Plant).

Mr. Samueli responded to the AMD news by noting that companies in the United States were looking for a broad base of suppliers, and if a fab in India could offer chips at competitive prices and quality, Broadcom would be happy to give them business.

He did emphasize the government would have to work hard to provide the right infrastructure, such as an uninterrupted and clean supply of power, as well as water at cost-effective rates.