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Is India Ready for the Next Chip Wave?

electronic systems in India and are fostering the startup ecosystem. Cadence’s Ahuja pointed to one signifi cant development globally.
There could be more incubation centers to come that would target “ istorically, there have not been many chip architectures available
specifi c industry verticals and geographies. For example, the city of but as we see more AI artifi cial intelligence , ML machine learning ,
Pune, which is the hub of automobile design in India and caters to and other forms of deep tech scaling up and posing new challenges,
global markets as well, could accommodate an incubation center for the chip architecture also needs to change,” he said. “This is what
automotive electronics. startups globally are working on. India also stands a chance and must
focus on this area. owever, we may not have the requisite talent levels
FUNDING SHORTAGE FOR FABS AND STARTUPS to do this.”
Funding is the most serious concern for the chip industry in India, If the country pursues the requisite skills with vigor and steers its
especially in relation to a potential fab buildout and the funding eco- knowledge base in the right direction, it could see a couple of startups
system for startups. emerge in the semiconductor value-chain domain. But Indian compa-
Even after a commercial launch of its product, a chip startup nies need an environment to accelerate this potential, or they will fi nd
might find it doesn’t have access to the capital that could help it frustrating to build a business in India.
it become self-sustainable. There aren’t enough avenues in the For example, it took Saankhya Labs, developer of a software-de-
venture-capital and private-equity markets, probably because of a fi ned-radio SoC platform, 10 years to reach a point where it could see
lack of benchmarks for investors to evaluate business plans and the a sustainable future, said CEO Parag Naik. It would have taken only
potential return on investment. three to fi ve years to achieve the same result if Saankhya Labs had been
Furthermore, the boom in digital startups, whose business models based in Silicon alley, he said.
are often easier for the investor communities to understand, makes Over the past decade, government intent has been somewhat aligned
those startups potentially more lucrative investments in terms of with industry’s aspirations. But implementation of chip-industry
returns with known risks. In comparison, the risks in the chip industry friendly initiatives has been slow, and the government and private
are rarely exposed to the funding ecosystem available to Indian start- investors alike remain averse to the risks associated with investment in
ups, especially outside of India. electronic-systems design.
India isn’t quite ready to lead the next wave of the chip industry. But
TALENT IN ABUNDANCE it does have the potential if conditions are right. ■
The least of the chip industry’s challenges is talent, though the higher up
the value chain you look, the scarcer the required expertise becomes. If Faisal Kawoosa is founder and chief analyst at techARC, which
India is to catch the next wave of chip industry growth, it has to nurture provides market insight and advice in areas such as consumer tech,
a talent pool of engineers whose skills extend beyond the country’s tradi- telecom, and semiconductors in addition to contributing to policy advo-
tional strengths in design, verifi cation, and embedded software. cacy in India.

SPECIAL REPORT: INDIA
India Must Focus on Fabless Startups,

Not Building Fabs

By Meenakshi Vashist

s a technologist who transitioned signifi cantly lower labor costs than their from teams who did odd jobs, such as library
from telecom-system R D to IC counterparts elsewhere in the world. characterization and running regressions, to
design in the mid-1 0s, I have wit- The fi rst wave of semiconductor compa- teams who integrated large systems-on-chip
Anessed nearly the entire evolution nies leveraged this talent pool to set up their (SoCs). It was like a never-ending party where
of the IC design industry in India from its offshore IC design centers in the country. The everyone was a winner. LSI design became
beginning to its present form. So what are my signifi cantly higher salaries, multinational the most coveted sector for job seekers, and
main observations work environment, and opportunity to work India quietly emerged as a strong IC design
The industry started off in the mid-1 0s in the emerging LSI design fi eld acted as hub for the world.
with a strong talent pool of engineers from top the right motivation for the transition. These From 200 to 201 , however, several devel-
schools who had many opportunities to work engineers were ready to put in long hours opments unfolded that had a negative impact
on exciting projects in India and overseas. to learn and deliver, and their work fueled on the growth of the IC design sector in India
Some took jobs in the United States. Others the growth of the sector for nearly a decade, The startup ecosystem in India gained
worked at homegrown, largely state-funded through most of the 2000s. Even as 2001 traction, with new business models pig-
electronic-system and -product companies ushered in a recession in the tech industry in gybacking on the top of smartphones and
as part of vertically designed organizations other parts of the world, several tech compa- the newfound benefi ts of mass internet
in these, an engineer would be involved in nies were setting up their design operations access. Entrepreneurship became a viable
the project starting with development of the in India, driven by the need to cut costs at career path in the country. ence, more
product specs and take the product through their home-based development centers and engineers coming out of India’s top
architecture, implementation, validation, fi eld bolster operational margins. schools emigrated to the U.S. or became
trials, and industrial qualifi cation. Encouraged and motivated by the impact entrepreneurs at home, and only a hand-
These were engineers who were passion- they were making, participants in the LSI ful chose to pursue once-coveted jobs in
ate about their work and performed it at sector in India moved up the value chain the IC design sector.

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