Rs 4,000cr fabless seed fund needed for ‘Aatmanirbhar Bharat’: IESA

Satya Gupta, Chairman, IESA.

New Delhi, (Asian independent) Setting up a Rs 4,000 crore fabless seed fund with the goal of creating and supporting 100 successful fabless companies in the next five years is needed to make the country self-reliant on semiconductor chip products, industry body India Electronics and Semiconductor Association (IESA) said.

From smartphones and computers to autonomous cars and other industrial equipment, semiconductors enable a broad gamut of products which are key to functioning of the economy.

And in today’s geo-political situation where data security has become a major concern, self-reliance in the semiconductor chip products is strategically very critical.

But because the fabless products companies need significant investment — $5-$10 million — and longer gestations period, 3-5 years, it is very difficult to get required seed capital or investment, explained Satya Gupta, Chairman, IESA.

“The second area where these fabless start-ups need help is on product marketing and business talent. As most of entrepreneurs in chip design come from technical background, it will help them immensely if they can be supported and supplemented with business talent,” Gupta told IANS in an interview.

IESA, an industry body representing the Electronics System Design and Manufacturing (ESDM) and intelligent electronics industry in India, believes that it is a critical “need” to develop indigenous capabilities in electronics system products design and design-led manufacturing, especially for the products which are in the critical networking infrastructure.

Gupta said that in devices like smartphones, base stations, switches, routers, etc., the data security has to be safeguarded both at the chip level and at the electronics system level.

“Government should put a strategic plan similar to incentive plan for manufacturing to incentivise domestic product design and design-led manufacturing of electronics systems to ensure the adequate control and regulation of data,” Gupta told IANS.

“Global synergies and partnerships are essential to achieve this goal of developing a self-reliant (aatmanirbhar) electronics system products ecosystem,” he added.

Indian electronics products market segment consumes substantial amount of semiconductor components and as per IESA ESDM Market study report 2020, the total semiconductor component market is estimated to be about $20 billion in FY 2019 growing to $45 billion by 2025.

Although India is one of the leaders in semiconductor design, Indian companies’ share of the semiconductor product market is considerably small — less than five per cent, IESA said, adding that along with the key stakeholders and partners, the industry body envisages creating 100 domestic fabless companies in the next five years.

Examples of global fabless giants include the likes of Qualcomm and Broadcom.

The National Policy on Electronics 2019 (NPE 2019) also envisages to position India as a global hub for ESDM with thrust on exports by encouraging and driving capabilities in the country for developing core components, including chipsets, and creating an enabling environment for the industry to compete globally.

“Self-reliance in electronics and semiconductor chip products are strategically critical in today’s geo-political scenario with similar importance as space,” Gupta said.