Eshita Gain | August 23, 2024

Domestic startups fear that India’s vision of the semiconductor market crossing $100 billion within six years is unachievable as the sector faces a lack of market access, human talent, and risk-capital.

“It’s tough to achieve that goal as there is a lack of entrepreneurs in the deep-tech sector,” said Parag Naik, the Chief Executive Officer (CEO) of Saankhya Labs, a Design Linked Initiative (DLI) funded startup. The DLI scheme grants reimbursement to domestic semiconductor startups.

Naik said that unlike new-age startups that gain traction quickly, deep-tech startups grow at a slower pace as they involve higher risks, making it difficult to attract investors.

In the July Lok Sabha session, Jitin Prasada, Minister of Information Technology (IT), said that the DLI scheme will help the semiconductor industry to grow twofold by 2030.

Naik is not alone as at least three other tech-startup founders agree that India’s chip making industry is at a nascent stage with limited funding opportunities.

“Companies are unlikely to buy from new chip suppliers unless the chip is next generation and meets performance, quality, supply and cost benchmarks,” said Kiran Kuchi, the founder of WiSig Networks, a DLI funded startup. Achieving these standards requires long-term support in terms of funding,” he said. 

The Indian government through its “Make in India” initiative launched several schemes and incentives to stimulate domestic semiconductor manufacturing. These schemes, including DLI, were designed to reduce the country’s dependency on imports.