SOLDERING ON

As global chip demand surges, India's design-led startups seek funds, mentorship, and infrastructure to stay in the race By Rohit Chintapali

- Rohit Chintapali

INDIA’S semiconductor startups are standing at the edge of a trillion-dollar global opportunity but without enough capital to leap. Despite a wealth of engineering talent at home and maturing government support, these fabless chip ventures face a daunting combination of chronic underfunding and mis-aligned venture capital expectations.

With international peers raising tens of millions in early rounds, Indian startups are often left struggling with sub-$3 million deals to build complex System-on-Chip (SoC) products. Coupled with longer R&D cycles and high upfront costs, the traditional VC playbook built for SaaS or consumer tech simply doesn't translate. As founders push forward against structural and ecosystem gaps, many believe bold, patient capital and deeper strategic support are the only way to level the playing field.

Capital Constraints

Indian semiconductor startups battle a severe funding disadvantage compared to global peers, with domestic investments falling far short of international benchmarks.

“Access to risk capital remains the top priority for Indian startups, especially in the fabless semiconductor sector,” says Ashok Chandak, President, India Electronics and Semiconductor Association (IESA). “Developing a typical simpler function System-on-Chip (SoC) requires nearly $10 million for R&D and another $10 million for sales and marketing. However, most Indian deals are significantly smaller - often below $3 million.” The funding gap becomes stark in global comparisons. “A similar CPU core company in the Bay Area could raise anywhere from $50 million to $100 million. Competing globally becomes incredibly challenging under such resource constraints,” Chandak adds.