India’s semiconductor startups need more than successful chip designs to build durable businesses. Industry founders and investors say corporate partnerships, shared research facilities and domestic customers are essential to reaching commercial production.
Their assessments come as India’s semiconductor programme expands manufacturing capacity and public investment. But startup leaders describe a separate challenge: turning locally developed technology into products that customers will buy.
In interviews with ETEntrepreneur, participants called for support beyond factories and funding rounds. Their proposals include corporate distribution partnerships, stronger private research spending and government procurement of domestic chips.
Design Startups Need Routes To Market
Hareesh Chandrasekar, CEO and co-founder of AGNIT Semiconductors, said most semiconductor startups work in fabless design. These companies own chip-design intellectual property and products, rather than concentrating on factory infrastructure.
Larger industrial businesses are taking on more capital-intensive manufacturing and packaging projects, he said. He cited Tata’s silicon fabrication plant and projects involving Tata, CG Power and Kaynes.
Chandrasekar wants large companies to give startups access to distribution, customer relationships and service capabilities. He argued that established brands can also help emerging chip products earn customers’ trust.
Ben Mathias, managing partner at Vertex Ventures (Southeast Asia & India), identified domestic adoption as another challenge. He questioned how many local buyers would choose indigenous intellectual property over foreign alternatives.
Mathias suggested that regulatory and economic incentives might encourage that choice. He also called for startups to work with local manufacturers so finished products can be designed around Indian chips.
Shared Research And Early Customers
Souma Sekhar Gangopadhyay, associate director at PwC, urged conglomerates to direct more capital toward innovation. His proposed incubators would cover chip design, equipment, utilities, water management, materials and chemicals.
Gangopadhyay also described shared research infrastructure as a major constraint for startups. He proposed access through user fees or partnerships, alongside international platforms that could support Indian companies.
Government purchasing could provide greater certainty about demand, he argued. He recommended beginning with scalable applications rather than mission-critical uses, allowing domestic products to gain a foothold.
These are recommendations from industry participants, rather than completed procurement commitments. Mathias also identified imports, customs and quality assurance as supporting systems that still need to develop.
Funding Progress Leaves Commercial Work Ahead
The report cited a 2026 study by Speciale Invest and Startup Policy Forum on semiconductor startup financing. It found about $206 million raised across 51 rounds since 2022, including $61.9 million in the first half of 2026.
Individual rounds included $15 million for C2i Semiconductors in February 2026 and $10 million for Vervesemi around the same period. Mathias said funding was available across different stages.
Bragadeesh Suresh Babu, founder and CEO of chip-design automation startup Tattvam AI, offered a more cautious comparison. He said Indian private-market capital for deeptech remained limited relative to the United States and China.
Aheesa Digital Innovations illustrates the commercial steps still ahead. After first-pass silicon success with its VIHAAN broadband chip, the company is targeting its production tape-out in 2027.
Mathias said many startups remain nascent and need manufacturing partners to commercialise their products. His proposed next step is to develop the supply chain and services around those design businesses.