The rise of India’s chip design startups and ecosystem expansion

India's semiconductor startup landscape is becoming richer, helped by strategic partnerships, more venture funding as well as greater public support for startups in the sector. We are beginning to see milestones reached that mark the early stages of a shift from tech demonstrations to commercial operations.

The evolution reflects a broader transformation in the country's approach to chip design and manufacturing: government-backed initiatives, private investment, both domestic and foreign, and international collaborations are converging to create conditions for sustainable growth in a sector where India is taking steps to narrow the gap with the advanced economies.

Developments at India’s chip design startups, in particular, stand out for the potential they’re showing. They have an opportunity to gain a significant share of the market at home and eventually in other markets, and in the process, build large, and global, semiconductor companies out of India over the next decade.

Mindgrove Technologies, in our own portfolio for example, announced a partnership with Bosch Global Software Technologies a couple of months ago – exemplifying how domestic startups are securing validation from established global industrial players. The three-year-old company was incubated at IIT Madras, in Chennai, and has already shipped its first products.

With Bosch, Mindgrove will supply chips and boards for field deployment and testing, with Bosch providing engineering expertise and access to its ToolBundle platform. This arrangement represents more than a customer relationship — it's a co-development agreement targeting automotive, consumer electronics, and IoT applications using the RISC-V architecture.

The partnership follows Mindgrove's successful launch of Secure IoT, described as India's first commercial high-performance microcontroller chip. Clocked at 700 MHz and fabricated on a 28nm node, the chip is positioned to cost 30 percent less than competing products while maintaining comparable performance specifications. The company expects commercial shipments within six months after completing its initial mass production order.

VC investments

Venture capital activity in the sector demonstrates growing investor confidence. Morphing Machines raised $2.76 million in a seed round that we were proud to lead, while Netrasemi secured Rs. 107 crore ($12.5 million) in Series A funding from Zoho Corporation and Unicorn India Ventures.

Morphing Machines, incubated at the Indian Institute of Science since 2006, is developing REDEFINE, a many-core processor designed for applications spanning data analysis, artificial intelligence, and telecommunications. The company's approach addresses the challenge of building flexible processors that can handle multiple workloads without the limitations of traditional fixed-function designs.

Netrasemi's funding supports development of two edge-AI chips currently in the ‘tape-out’ stage (sector speak for a design that’s ready to be manufactured as a physical chip) using TSMC's 12nm technology. The Kerala-based company is targeting surveillance, robotics, and smart infrastructure markets with chips designed to perform AI-based analytics locally rather than relying on cloud processing.

These deals reflect broader funding trends, with Indian semiconductor startups raising $28 million in 2024, up from $5 million in 2023.

Government support

Strong support from various government agencies – covering a range of strategic applications from space to defence – is also boosting the sector.

The Design Linked Incentive (DLI) scheme, launched under the Ministry of Electronics and Information Technology, has approved 23 chip design projects with committed support of Rs. 234 crore ($27.8 million). The programme provides access to electronic design automation (EDA) tools and intellectual property cores essential for chip design, currently benefiting 72 companies and 278 academic institutions.

This support addresses a fundamental challenge in semiconductor development — the high cost and complexity of accessing design tools and fabrication services. The government is beginning to step in to help lower barriers to entry, encouraging domestic innovation.

Ten startups supported under the scheme have successfully secured venture capital funding, while six companies have completed prototype tape-outs at international semiconductor foundries.

India's semiconductor market, valued at approximately $38 billion in 2023, is projected to reach $100-110 billion by 2030. This growth trajectory, combined with the country's position as the world's second-largest market for 5G smartphones with a 13 percent share, creates demand conditions that support domestic chip development.

The broader context includes India's integration into global electronics value chains and efforts to reduce import dependence. The country currently imports significant quantities of integrated circuits, memory chips, amplifiers and other components, with China supplying nearly one-third of these imports.

In this regard, the rise of India’s chips startups is also happening at a time when domestic conglomerates are investing in the entire value chain – from the Tata Group and the Murugappa Group building foundries and OSAT units to Wipro Enterprises investing in advanced materials for printed circuit boards.

Further, many of the world’s biggest companies in electronics, including Apple and their suppliers like Foxconn, are investing in local manufacturing in India, and several major semiconductor companies in the world are expanding their global capability centres (GCC) here. All of this provides a fillip to the overall ecosystem’s accelerated development in the country as our startups embark on their journey from small ventures to global companies.