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How Indian Startups are Etching Semicon Dreams The growing focus of the Indian government on the semiconductor industry has led to a burgeoning number of semiconductor startups in the country, which are helping India realize its ambition of becoming a Semiconductor superpower

By Paromita Gupta

Opinions expressed by Entrepreneur contributors are their own.

You're reading Entrepreneur India, an international franchise of Entrepreneur Media.


In 2021, like millions of gamers worldwide, media student Abhinav Tyagi couldn't wait to get his hands on the latest gaming sensation by Sony- PlayStation 5. It took him three pre-order tries and seven months later he went home with the box in his hand. Many still waited close to two years to get their devices. Between 2020- 23, products and gadgets such as automobiles, graphics cards, video game consoles, computers, household appliances, and other consumer electronics that required semiconductor chips became a tough buy.

For the uninitiated, semiconductors are materials that have the electrical conductivity value of both, conductors which pass electricity, and insulators, which resist electricity. The pandemic not only halted the world for a few months but also played a domino effect on the shortage. It impacted the availability of key chips necessary for the manufacturing of other electronics. South Korea (over 15 per cent) and Taiwan (over 50 per cent), the two largest semicon-producing countries, faced severe impacts on their manufacturing capacities. This was coupled with Taiwan's 2021 drought, the China–United States trade war, the Russia– Ukraine war, and the rise in cryptocurrency mining.


According to the Observatory of Economic Complexity's data, India exported semiconductor devices worth USD 516 million and imported said devices worth USD 4.55 billion in 2022. Needless to say, India's several deep tech ambitions rest upon the tiny imported chip. Due to the shortage, India's revenue growth of consumer electronics dipped from 51.1 per cent in 2020 to 24.9 per cent in 2021. India not only wants to be self-reliant in the long run but also wants to be a key exporter of other economies.

In December 2021, the Government of India committed its ambitious Production Linked Incentive scheme worth INR 2,30,000 crore to position India as a global hub for electronics manufacturing with semiconductors as the foundational building block. At the time of the announcement, it had got an outlay approved of INR 76,000 crore. The program aims to provide incentive support to companies that are engaged in Silicon Semiconductor Fabs, Display Fabs, Compound Semiconductors/Silicon Photonics/Sensors (including MEMS) Fabs, Semiconductor Packaging (ATMP / OSAT), and Semiconductor Design.

The government's additional schemes such as the Design Linked Incentive (DLI), Chips to Startup (C2S), and Scheme for Promotion of Electronic Components and Semiconductors (SPECS) are also propelling interest in the space. On February 29 this year, the government approved three semiconductor units under the' Development of Semiconductors and Display Manufacturing Ecosystems in India' initiative worth INR 1,25,600 crore.


The semiconductor industry consists of companies that design, fabricate, assemble, test, and supply semiconductors that are suitable for various electronic devices. While corporate players such as Tata, Vedanta, AMD, and Micron are already betting big in the space, particularly on the foundry, startups are also emerging in this space to lead India ahead. "Despite its capital and tech-intensive nature, the semiconductor industry offers significant opportunities for startups with innovative ideas. Startups have the agility and creativity to disrupt traditional approaches in chip design, materials science, and architectures," shares Mahankali Srinivas Rao (MSR), CEO, T-Hub.

According to Tracxn, a market research firm, there are 38 Indian semiconductor startups that have raised seed or Series A funding. Some of the startups in this market include Signalchip Innovations, Aurasemi, Cirel Systems, SimYog Technology, SiliConch, InCore, MMRFIC, Neolync, Ambee, and Mindgrove.

A trend one can identify is the incubation and cohorts of these startups. Several of the startups have backing through T-Hub, IIT Madras, Qualcomm, NXP, and IIT Hyderabad to name a few.

Incubated at IITM Pravartak, Mindgrove has emerged as one of the rising semicon startups in the country. The Fabless design startup credits the Madras ecosystem for giving it access to top talent. "The investment required to set up a new unit on the manufacturing side is exceptionally high, and this side is cut off from startups. However, the story is different on the design side. Creating a design startup may require an investment of USD 10-50 million, which can be brought down with access to talent and tools," shares Shashwath T R, co-founder and CEO, Mindgrove Technologies, a design and production of Systems on Chips startup. It is built on top of RISC-V, an open standard that helps in reducing the costs further. Having a mutual interest in computer vision, Shashwath T R and Sharan Jagathrakshakan were always on the lookout for the right processors. However, either the processors were too expensive, didn't meet their specific requirements, or weren't available. This prompted the duo, with encouragement from their professor, to make it themselves, thus giving birth to Mindgrove.

Through its semiconductor cohort 2 under the AIC T-Hub Foundation program, T-Hub supported 10 Indian startups, while Qualcomm through its Design in India Challenge editions is supporting startups with innovative hardware product designs incorporating Qualcomm SoCs and technologies. One such startup is GEOCON. "Our chip and software ecosystem allow SoC users to pay only for the IP they use, while developers can trade and profit from synthesized RTL. It's essentially Hardware-as-a-Service, revolutionizing accessibility and affordability in the semiconductor space," shares Sahil Khan, Founder, Geocon Semiconductors, a Semiconductor- (Electonics System Design and Manufacturing) startup.

Saseendra Kumar Jonnalagadda's Ambit Semiconductors is aiming to develop a holistic ecosystem spanning all stages from concept to production, ensuring meticulous quality and performance. "Central to this strategy is our in-house RTL (Register Transfer Level) development team, adept at crafting IPs tailored for AI/ML applications," he shares. The startup offers semiconductor design and intellectual property design services.

"Think back to 10 years ago, when we suddenly saw a lot of consumer internet and SaaS startups emerge in India. It happened because the timing and the conditions were just right. Today, we have similar conditions for the semiconductor industry in India," shares Dr Neel Gala, CTO, InCore Semiconductors, a 2018-founded processor design startup.


Apart from the operating sectors and industries, the Semicon founders are bullish about consumer IoT (Internet of Things) and AI on edge. "India is already seeing the rise of home-grown electronics brands that are innovating for the unique needs of Indian customers, and we see ourselves supporting these brands in their hardware innovation journey," shares Gala.

The Mindgrove CEO is also optimistic about EVs and automobiles, "We are very excited about the growth of IoT devices in consumer electronics. Everything is becoming connected and "smart" - watches, locks, lights, fans, TVs, fridges, printers, etc. We are also excited about the EV sector. Each EV requires a bunch of chips to run flawlessly, and the sector's growth is pushing chip designers to step up, innovate, and offer better chips. In the automotive industry, we are also excited about advanced features being made available to all cars. We see a future where even a WagonR will have built-in infotainment, parking assistance, and more."


Despite the need and potential, Semicon space is a tricky one to navigate for startups. "The biggest challenge is the long development cycles and upfront investment needed to design processors. Another challenge is the nascency of Semicon investors. Almost every VC wants to invest in Semicon startups, but a lot of them need to upskill themselves to understand the nature of the industry and its challenges," comments Gala.

"Currently, our biggest hurdle is securing funds for EDA and Tapeout, but we're actively tackling this challenge head-on," adds Khan. For Jonnalagadda, Talent Acquisition in VLSI Design and Accessibility of Multi- Project Wafer (MPW) Shuttles in Foundries are the biggest challenges. "MPW shuttles are vital for cost-effective fabrication, yet securing slots is challenging. To address this, proactive planning is key. By forecasting our needs and collaborating closely with foundries, we enhance our chances of securing timely slots," Jonnalagadda adds.

For Shashwath, challenges are not on the design side but more on the sales and marketing side, "When OEM brands look for chips to incorporate into their designs, they can access chips from top global companies. Our chips may have unique differentiators from these, but we have to convince OEMs to trust a new startup like us. This is the biggest challenge that we face."


Out of 200 semiconductor startups, only 94 have raised funds according to Tracxn. For founders, raising capital is a prime concern. NXP, a Dutch-based semiconductor R&D entity, has been investing in Indian talent through its collaboration with Startup India for the NXP India Tech Startup Challenge. "We actively engage with startups through structural initiatives such as the India Tech startup challenge, Silicon Seeds, and the Semiconductor Startup Incubation and Acceleration program. We believe that by supporting promising startups, we can collectively propel India's journey towards becoming a global semiconductor powerhouse," shares Hitesh Garg, Vice President and India Country Manager, NXP Semiconductors.

With Fab being the most tricky and capital-intensive segment, Garg advises potential startups, "Setting up a fabrication plant (Fab) can be a massive undertaking. For startups, the best strategy can be to focus on design and development, leveraging existing fabs through partnerships or foundry models. This allows them to bring their ideas to life quicker and with less upfront investment." Having previously invested in Steradian Semiconductors, Murali Krishna Gunturu, Principal, Inflexor Ventures feels the venture capital maintains a positive outlook on India's semiconductor space, "We are focusing in a few interesting areas such as Gallium Nitride applications and advanced SoC designs and production systems." Additionally, the PLI and DLI schemes launched by the government will help ease the capital pressure on such startups.


According to the India Electronics & Semiconductor Association, the semiconductor market in India is expected to grow to USD 100 billion by 2030. The country will also require an additional pool of at least 20 lakh deep tech engineers by 2030 to meet its growing semiconductor aspirations.

"One significant trend is the globalization of semiconductor assembly and packaging. Historically concentrated in regions like the US, East Asia, and Europe, there's a rising interest in expanding these capabilities to emerging markets like India. This shift fosters a more diverse and localized semiconductor ecosystem, offering new opportunities for innovation and collaboration," shares Jonnalagadda.

Paromita Gupta

Features Writer with Entrepreneur India

Covering news and trends in AI and Metaverse segments. An avid book reader running her personal blog on the side. You may reach me at paromita@entrepreneurindia.com. 
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