India's semicon opportunity goes beyond chip design: Celesta Capital

Sriram Viswanathan says packaging, power electronics and intellectual property offer new opportunities as India builds a deeper semiconductor ecosystem

India’s semiconductor opportunity is expanding beyond chip design into packaging, power electronics and intellectual property (IP), said Sriram Viswanathan, founding managing partner of venture capital firm Celesta Capital.

 

Delivering a keynote on the second day of Semicon India, Viswanathan said, “The bottleneck has moved from just core design to packaging and other things. Power electronics is a new opportunity for India in the semiconductor space. While design remains a key strength, IP is an important part of what needs to be enhanced.” 

 

According to Viswanathan, the diversification of global semiconductor supply chains, coupled with the domestic talent pool, growing domestic demand and government support created a significant opportunity for the country to build a deeper semiconductor ecosystem.

  

Viswanathan highlighted the need for greater commercial viability among deep-tech startups in the country.

 

He said government subsidies and incentives can help shape business plans but cannot substitute for sustainable businesses, revenues and customers.

 

He added, “In the areas of space and defence, which are extremely important, companies have to be thinking about their commercial viability and be looking at things outside the government for economic viability.”

 

On the investment side, Viswanathan said that time-to-revenue is particularly important for deep-tech investors. It is where long development cycles can make companies less attractive to venture capital funds operating within finite investment horizons.

 

He also cautioned startups against valuations that are disconnected from revenues and market traction.

 

Viswanathan said while government support, domestic demand and talent form the essential foundation for the ecosystem, he stressed that market development and procurement policies would be equally important.

 

“Capital is one of the tools. Talent is the other leg but the most important thing is how do you develop the market and ensure that the procurement policies in India are conducive to becoming truly self-reliant using the products that we design and manufacture. So, competing globally means we must be capable of addressing the needs of the entire value chain,” he added. 

 

Viswanathan also outlined the progress of the India Deep Tech Alliance (IDTA), an industry coalition comprising venture capital firms and industry bodies. It was launched at Semicon India last year.

 

He said that the pool has since grown to more than $3 billion, with companies including Qualcomm and Lam Research joining the initiative. 

Celesta Capital had earlier received Securities and Exchange Board of India (Sebi) approval for the category alternative investment fund (AIF)-II. The firm is currently raising a ₹2,000-crore deep-tech fund.