The global semiconductor industry, a critical driver of technological innovation and economic growth, is witnessing a significant shift with the emergence of iVP Semi, a fabless semiconductor start-up founded by industry veteran P Raja Manickam. Launched on a Saturday, iVP Semi aims to localize design and chip production in India, signaling a transformative phase for the country’s burgeoning semiconductor landscape.
The Vision Behind iVP Semi
P Raja Manickam, former CEO of Tata Electronics OSAT, brings a wealth of experience to his new venture. His vision for iVP Semi is clear: to bridge the gap between chip design and product development in India. “We have good chip design companies. Tata is also coming up with a chip manufacturing (fabrication). What we need are product companies that can put this together and build products, which is what iVP will do,” Manickam stated. This strategic approach positions iVP Semi as a crucial player in integrating various stages of semiconductor production, from design to end-product development.
The Current Semiconductor Landscape
The semiconductor industry is dominated by global giants like SD Micro, Infineon, OnSemi, Nexperia, and Texas Instruments. These companies have established strongholds in the market, leveraging advanced fabrication and assembly capabilities primarily located outside India. The absence of major Indian players in this space is primarily due to the lack of indigenous chip manufacturing facilities. However, this scenario is rapidly changing.
In March, Tata Electronics initiated the construction of a massive 91,000 crore semiconductor fabrication facility at the Dholera Special Investment Region in Gujarat. This facility marks a significant milestone in India’s quest to establish a robust semiconductor ecosystem. Additionally, Tata Electronics is setting up a 27,000 crore Outsourced Semiconductor Assembly and Test (OSAT) facility in Morigaon, Assam. Complementing these efforts, the Murugappa Group’s CG Power and Industrial Solutions commenced work on a `7,000 crore OSAT facility in Gujarat.
iVP Semi’s Strategic Approach
iVP Semi’s strategy leverages the evolving semiconductor infrastructure in India. The company plans to source wafers from established semiconductor hubs in Taiwan, Japan, and Korea. These wafers will then be packaged in India once Tata and CG Power start their operations. iVP Semi will undertake the critical testing phase before delivering the final products to end consumers. This approach allows iVP Semi to focus on its core strength—designing semiconductor chips—while outsourcing manufacturing to specialized foundries, a model followed by successful fabless companies like Qualcomm and NVIDIA.
Manickam emphasized that iVP Semi will initially target the power sector, including renewable energy, battery storage, and transmission requirements. With the increasing adoption of smart grids, the demand for advanced semiconductor solutions in the power sector is expected to surge. The total addressable market in this space is projected to be $3.5 billion, presenting substantial growth opportunities for iVP Semi.
Financial Backing and Growth Prospects
iVP Semi has secured $5 million in a pre-series A funding round, providing the financial foundation needed to scale operations and establish testing facilities. The company aims to achieve revenue targets of $70-100 million within the next three to four years, reflecting its ambitious growth plans. This financial backing is a testament to the confidence investors have in iVP Semi’s vision and potential to transform India’s semiconductor industry.
Establishing a Robust Infrastructure
To support its growth objectives, iVP Semi is setting up chip design centers in Chennai and Bengaluru, two of India’s leading tech hubs. These centers will play a pivotal role in driving innovation and attracting top talent in semiconductor design. Furthermore, iVP Semi is licensing product IP from Taiwan, Japan, and the US, ensuring access to cutting-edge technology and expertise.
A critical component of iVP Semi’s infrastructure strategy is the establishment of a 20,000 sq ft production test facility in Chennai, in collaboration with the Tamil Nadu government. This facility will serve as a cornerstone for the company’s testing operations. Plans for a second facility in South India are also underway, highlighting iVP Semi’s commitment to building a comprehensive and geographically distributed infrastructure.
Employment and Skill Development
As an asset-light fabless company, iVP Semi’s operational model emphasizes efficiency and agility. The company’s growth is expected to generate significant employment opportunities, with plans to hire around 250-300 people over the next three years. This workforce will be instrumental in driving the company’s design and testing operations, contributing to the broader development of India’s semiconductor talent pool.
The Broader Impact on India’s Semiconductor Ecosystem
The launch of iVP Semi is a significant milestone in the context of India’s semiconductor ambitions. Historically, India’s role in the global semiconductor supply chain has been limited, with a focus on design services rather than full-scale manufacturing and product development. iVP Semi’s integrated approach, combining design with local testing and packaging, represents a paradigm shift that could propel India into a more prominent position in the global semiconductor industry.
This shift is supported by government initiatives aimed at boosting domestic semiconductor capabilities. The Indian government has introduced various policies and incentives to attract investments in semiconductor fabrication, assembly, and testing. These efforts align with the broader goal of achieving self-reliance in critical technology sectors and reducing dependence on imports.
Challenges and Opportunities
Despite the promising outlook, iVP Semi and the broader Indian semiconductor industry face several challenges. Establishing a robust supply chain for semiconductor manufacturing involves navigating complex logistics and securing reliable sources of raw materials. Additionally, the highly competitive nature of the global semiconductor market means that iVP Semi must continuously innovate and maintain high standards of quality and performance.
However, these challenges are accompanied by significant opportunities. The global semiconductor market is experiencing unprecedented growth, driven by the proliferation of technologies such as 5G, artificial intelligence, and the Internet of Things (IoT). As a fabless semiconductor company, iVP Semi is well-positioned to capitalize on these trends by developing specialized chips for emerging applications.
Moreover, the increasing focus on sustainability and renewable energy presents a unique opportunity for iVP Semi. By targeting the power sector, the company can contribute to the development of energy-efficient technologies that support global efforts to combat climate change.
The Role of Innovation and Collaboration
Innovation is at the heart of iVP Semi’s strategy. The company’s focus on advanced chip design, combined with the use of cutting-edge testing and packaging technologies, positions it at the forefront of semiconductor innovation. Collaborative partnerships with global technology leaders and academic institutions will be crucial in driving this innovation forward.
iVP Semi’s approach also emphasizes collaboration with local stakeholders. The partnership with the Tamil Nadu government to set up a production test facility exemplifies the importance of public-private collaboration in building a thriving semiconductor ecosystem. By working closely with government entities, industry partners, and academic institutions, iVP Semi aims to create a supportive environment for semiconductor innovation and growth.
Looking Ahead: iVP Semi’s Vision for the Future
iVP Semi’s journey is just beginning, but the company’s vision for the future is ambitious and far-reaching. By localizing chip design and production in India, iVP Semi aims to become a key player in the global semiconductor industry. The company’s focus on the power sector, combined with its strategic use of advanced technologies and collaborative partnerships, positions it for sustained growth and success.
As iVP Semi continues to build its infrastructure and expand its operations, it will play a critical role in shaping the future of India’s semiconductor industry. By leveraging the country’s growing semiconductor capabilities and fostering a culture of innovation, iVP Semi is poised to contribute significantly to India’s technological and economic development.
In conclusion, the launch of iVP Semi marks a significant milestone in the evolution of India’s semiconductor industry. With a clear vision, robust strategy, and strong financial backing, iVP Semi is well-positioned to navigate the challenges and seize the opportunities in the dynamic semiconductor market. As the company embarks on this exciting journey, it holds the promise of transforming India’s role in the global semiconductor landscape and driving technological innovation for years to come.