Semiconductors’ face VC investment challenges
With increasing reliance on technology across various industries, the semiconductor sector is poised for substantial expansion in the coming years, says an industry.
The Indian semiconductor market faces significant challenges, particularly in attracting venture capital (VC) investments, despite the government’s strong push to establish the country as a global hub for semiconductor manufacturing, according to the report, “Semiconductor Market in India 2024-2029” which is being offered by ResearchAndMarkets.com from 22 Dec.
India has limited indigenous semiconductor manufacturing capacity, which means high capital outlay and risks for investors, said the report.
“Semiconductor manufacturing is a long-term investment, often requiring years for substantial returns. This long payback period makes it a less attractive option for short-term investors, especially in an emerging market like India,” it said.
However, the semiconductor market plays a crucial role in enabling modern electronic devices and is characterized by rapid growth and innovation, noted the report.
Major companies in this sector include Samsung, Intel, SK Hynix, and Qualcomm, which dominate the market due to their advanced technologies and manufacturing capabilities, it observed.
The rollout of 5G networks is a primary catalyst for semiconductor demand in India. Major telecom companies like Reliance Jio and Bharti Airtel are investing heavily in infrastructure to support high-performance chips that enable faster data speeds and low latency, according to the report.
A burgeoning ecosystem of startups focused on semiconductor designing is emerging in India. Companies like Kaynes Semicon and various other local firms are contributing to innovation within the industry by developing specialized chips for diverse applications. The presence of engineering talent and favorable business conditions support this growth.
Rising demand for consumer electronics like smartphones, laptops, tablets, and wearables is a key factor driving semiconductor growth. This trend is fueled by a growing middle class and increasing disposable incomes, leading to greater adoption of advanced devices, said the report.
Additionally, the automotive industry’s transition to electric vehicles (EVs) has significantly boosted semiconductor demand. EVs require more chips than traditional vehicles, powering systems such as battery management, safety features, and advanced driver-assistance technologies, said the report. Fiinews.com
