By Sanjay Gupta, Vice President and General Manager for India, NXP Semiconductors
India has become the third largest startup ecosystem in the world after the United States and China according to the 2021-22 economic study. From 2020 to 21, India has added three unicorns each months bringing the total number to 51, ahead of the UK (32) and Germany (18). More … than 14,000 new startups were launched in 2021-22, leading to a total of 61,400 recognized startups in the country across various industries.
Leveraging new era technologies such as artificial intelligence, internet of things, data analytics, big data, robotics, etc. several startups are working on innovative new ideas, products, and services that can support current and future use cases for businesses and consumers. It has been predicted that initiatives on 5G, public digital platforms, semiconductor design, electronics and telecommunications manufacturing, and even railways could lead to a more than five-fold increase in the number of unicorns. .
Semiconductors are essential components of electronic devices, enabling advancements in communications, computing, healthcare, transportation, clean energy, and countless other applications and businesses. And to meet the demand, startups are coming forward to solve the technological problem through their business model.
Government Support for Semiconductor Industry Startups
The Government of India has come up with several initiatives to realize the vision of Aatmanirbhar Bharat and position India as the global hub for designing and manufacturing electronic systems. The essential step towards this vision was to approve an INR 76,000 crore scheme to boost the manufacturing of semiconductors and displays in the country.
Under the Holistic Semiconductor and Display Manufacturing Systems Development Program, the policy supports silicon semiconductor manufacturing plants, display labs, compound semiconductors, as well as modernization and commercialization of the semiconductor laboratory (SCL). The program showed that manufacturing units or factories are no longer seen as liabilities but increasingly as assets if positioned in the right way, especially for contract chip manufacturing.
India is expected to focus on chip design as Indian companies already mainly provide low-end chip design services for third parties. More than 2,000 chips are designed in India each year, with more than 20,000 engineers involved in their design and verification. With the right support, such as preferential access to a domestic market, India could create a thriving and cutting-edge local fabless chip design industry.
Honorable Prime Minister Narendra Modi also highlighted the “Make in India” initiative, calling for sustainable and quality manufacturing in the country as it is “an opportunity to show the world our manufacturing power”.
To achieve this, the cCompanies are taking initiatives to develop the industries of Outsourced Semiconductor Assembly and Testing (OSAT) and Assembly, Testing, Marking and Packaging (ATMP), which are then delivered to ATMP houses that assemble chips and create functional electronic systems. Together, design, OSAT, and ATMP account for more than 50% of semiconductor supply chain revenue. To develop these innovative products and services under uncertain circumstances, tech startups are emerging to contribute with their innovative technologies that focus on manufacturing such units in India, these startups are building Fabless Accelerator Lab semiconductors like power electronic transistors or chip design, IP design, design services and chip design tools which can create more than a lakh of new jobs directly or indirectly according to government estimates.
Create a ripple effect
India’s reforms and changing policies towards start-ups and various government initiatives have helped Indian startups grow. According to Deloitte Global, venture capital (VC) firms worldwide will invest more than US$6 billion in semiconductor companies in 2022. This may represent only 2% of the more than US$300 billion in investments venture capital rounds expected for 2022, but this would only be second to the remarkable figure for 2021, estimated at eight billion US dollars, and more than three times higher than it was every year between 2000 and 2016.
the the government has also tasked 10 Sector Groups of Secretaries (SGOS) to create a roadmap for ‘India’s space in the world in 2047’. These include sectors such as agriculture, trade, infrastructure, industry, cityscape, security and defence, technology and governance where the new era tTechnology was also identified as an important area of work. SGoS strives to position India as a leader in these sectors over the decade and incorporates a framework to leverage technology across all sectors. It will also boost US$5 trillion in savings as startups and industries drive demand, generating jobs across all sectors.
New startups are emerging to accelerate the growth of the overall tech industry in India, with growing interest in the semiconductor market. There is tremendous potential for startups to help accelerate the success of the semiconductor industry in India through increased incentives and government support. Many multinational semiconductor companies are also helping start-ups to advance talent and innovation through their accelerator programs and at NXP India we are also contributing through programs such as Tech Startup Challenge and Semiconductor Startup Incubator and Accelerator Program which gives them access to mentors, tools, resources and operational support.
Startups can create many exciting opportunities for the country, and we must encourage them by incentivizing them in all areas necessary to help them pioneer new innovations. The government is also making every effort to attract the attention of start-ups to help build a self-sustaining and sustainable semiconductor ecosystem in India.