Presentation given at the 2nd SemiX Summit at IIT Bombay in November 2024
The Indian semiconductor ecosystem is at an inflection point, with rapid activity in progress across almost all aspects of the value chain. Globally too, the semiconductor industry is buoyed by the growth in AI and AI infrastructure. As venture capital investors in India, we are excited about what this activity means for early-stage startups and how they grow and interface with a rapidly changing industry.
India is already a semiconductor powerhouse, with roughly 20% of the world’s semiconductor design talent. Similarly to allied fields like biotechnology and the rise of India’s product-led bioeconomy, the country’s semiconductor industry is ascending the value chain - moving from a services hub to a global hub for electronics manufacturing. This is bolstered by a $10 billion outlay for semiconductor development in India:
While much of the capital allocation is towards capex and the setting up of hardware facilities, there is also a renewed focus on semiconductor startups. Government support in the form of C2S and DLI grants, as well as the opening up of large markets both domestically and globally, as well as the presence of high-quality talent in India, are all contributing factors to this growth.
Investments into semiconductor startups have been steadily rising over the past five years, dominated by electronics manufacturing services (EMS) companies, followed by semiconductor design, or “fabless” startups.
The ecosystem is also shaping up nicely with some aspects of it attaining maturity. This is highlighted by well rounded founding teams, including second-time entrepreneurs and founders moving back to India to build here. Sector-specific accelerators and centres of excellence, corporate venture activity and interfacing of startups with large private companies such as Intel, Nvidia & Qualcomm are also playing a key role. The acquirer persona in Indian semiconductors is also taking shape, beginning with the usual private company candidates but also including large industrial houses looking to now expand their footprint into electronics & semiconductors in India.
Another heartening sign of the growing maturity of the Indian semiconductor startup landscape is the diverse range of technologies - beginning from edge chipsets, compound semiconductor devices, HPC & AI solutions all the way to foundry, metrology and interconnect solutions. As early-stage venture investors, we see many positive signs in the ecosystem, and are excited for what the future portends for the Indian semiconductor ecosystem.
If you're building in this space or a stakeholder in the semiconductor or broader deeptech ecosystem, we'd love to hear from you. Please reach out at vishal.katariya@ankurcapital.com.
