As an emerging economy, India is becoming increasingly well-known for its startups. Even before the Indian government began to doll out incentives to encourage local semiconductor manufacturing, several fabless startups in this sector have showcased their potential. These startups and the ecosystem they create may increase the country's appeal as a chip manufacturing destination.
According to Semiconductor Fabless Accelerator Lab (SFAL), a government-backed entity that supports fabless startups, there are about 127 companies listed on an official startup tracking site. This is an increase from about 109 in 2020. Some companies may not even make it to these listings but are still working their way up diligently. SFAL believes that the market has a further 20X growth potential.
The interesting aspect of Indian fabless startups is the varied industries they look to serve. Despite early-stage challenges with funding in a country that's still trying to understand how semiconductor creation happens, the companies and their founders show a keen sense of the market requirements.
From niche products to broad offerings
A startup with an interesting offering is the Bangalore-based AB Circuits and Research Labs (ABCRL), working on chipsets that allow vehicle tire health monitoring. Speaking to Digitimes Asia recently, Tushar Bhattacharyya, co-founder of the company, explained that their goal is to make electronics that enable safer driving.
"If you think about the entire vehicle, one of the parts that people often neglect the most are the tires because their impact on the safety and performance of the vehicle is not directly visible," Bhattacharyya explained. "Not monitoring type performance can cost a fleet of about 20 trucks, almost as much as $30,000 a year – not to mention the substantial safety implications for people in the vehicle."
What the company has been doing is creating a tire performance sensor that improves the safety and efficiency of the vehicles. Bhattacharyya believes that the solution is unique and revolutionary because, for the very first time, you have sensors that can provide predictive insights into the tires.
While this is a highly focused offering, some companies provide a broader portfolio. One of India's earliest chip startups Saankhya Labs, for instance, caters to a broad spectrum of wireless communication requirements.
"We started in 2007 with an idea to build a series of highly programmable chipsets," explained Vishwakumara Kayargadde, co-founder and COO at Saankhya Labs. "We had earlier worked in the telecom, broadcast, and other such industries that used wireless and wired connectivity, and most of the solutions at that time had little or hardly any programmability. We felt the new standards coming up in the industry needed a lot more flexibility in silicon."
This led the company to look into a series of chipsets based on programmable architectures and develop the idea of building software-defined radio chipsets to solve multiple telecom problems. These deliberations resulted in the company developing its first silicon using multiple programmable DSP.
Saankhya Labs now offer products and solutions for broadband, satellite, and broadcast applications, including 5G NR, 5G broadcast, rural broadband connectivity, satellite communication modems for IoT applications, and multi-standard DTV mod and demodulators.
Vishwakumara Kayargadde, co-founder and COO, Saankhya Labs. Credit: Saankhya Labs
Optimism on India's chip-making plans
Kayargadde points out that there was very little awareness about the industry when they started. But now that the government is pushing to bring local semiconductor manufacturing, these startups also expect to benefit from a local supply chain and even more awareness among investors and customers.
"The initiative that is being taken and the policies being formed are long overdue," Bhattacharyya said. India has always been a critical place for global companies to consider manufacturing, but earlier, the economic policies and market conditions were not favorable. I think a policy like this is at the right time."
Startups like ABCRL outsource their manufacturing, assembly, and testing to large foundries overseas. Bringing such an ecosystem within India would benefit such companies in being closer to their execution process, shortening the time and resources required to bring products to the market. Bhattacharyya also indicates that the presence of growing startups may also ensure that local foundries would always be in demand.
"I think it's also a big boost to receive funding," Kayargadde added. "VCs and other angel investors would be more than willing to come and support semiconductor companies starting operations in India. It's very much possible to build a larger ecosystem for semiconductors in India that could make the industry self-reliant."
Tushar Bhattacharyya , co-founder and CEO at AB Circuits and Research Labs (ABCRL). Credit: ABCRL
A healthy ecosystem for potential partners
The Indian government has consistently shown interest in attracting major semiconductor and related component manufacturers to set up their plants here, offering incentives and subsidies that would allow them to work together with the local companies. Several reports have already suggested talks with leading Asian companies are underway.
The presence of fabless startups should make the offering sweeter as they are a clear indication of the demand in the country. They also show the availability of much-needed talent. In light of the current chip shortage, a combination of all these factors may encourage large chip makers to enter this market.
