India’s Semiconductor Ecosystem Expands to 3,557 Companies as Funding Reaches $1.4 Billion

Growing investments in chip design, electronics manufacturing and deep-tech startups signal the rapid expansion of India’s semiconductor ecosystem

India’s semiconductor ecosystem is expanding rapidly, with the country now home to 3,557 companies operating across the semiconductor value chain, according to data from Tracxn cited in recent industry reports. Of these companies, 281 have raised equity funding, collectively attracting around $1.4 billion in capital.

The funding momentum has accelerated significantly in recent years. Approximately $701 million — nearly half of the sector’s cumulative funding — has been raised since 2025, while semiconductor companies have attracted around $228 million during 2026 so far.

The figures highlight the increasing role of startups and technology companies in India’s broader semiconductor ambitions, which extend beyond chip fabrication into areas such as electronic manufacturing, embedded hardware, chip design, power-management technologies, semiconductor testing and packaging.

Funding Momentum Accelerates

India’s semiconductor sector has recorded a substantial increase in investment over the past five years. Annual funding increased from approximately $49 million in 2021 to $473 million in 2025, representing a five-year compound annual growth rate of more than 36%.

Electronic Manufacturing Services (EMS) has emerged as the most heavily funded business segment, attracting around $313 million since 2025. Embedded hardware has received approximately $51.9 million, while other areas attracting investment include power-management integrated circuits and fabless semiconductor companies.

The growth indicates that investors are increasingly looking at multiple layers of the semiconductor ecosystem rather than focusing only on large fabrication projects.

Bengaluru Remains a Major Semiconductor Hub

Bengaluru continues to play a central role in India’s semiconductor industry. The city is home to approximately 626 semiconductor companies, representing around 18% of the country’s total semiconductor companies.

It also accounts for approximately 40.1% of cumulative semiconductor equity funding, according to the Tracxn data cited by Business Standard and other reports. Noida, Gurugram, Kochi and Hyderabad are among the other important locations contributing to the sector’s development.

The concentration of semiconductor businesses in established technology hubs is supported by India’s existing engineering talent, electronics manufacturing capabilities, research institutions and technology infrastructure.

Startup and Deep-Tech Ecosystem Gains Importance

The semiconductor expansion is also creating opportunities for Indian startups working on specialised technologies.

Companies are increasingly developing products and solutions around chip design, embedded systems, sensors, semiconductor IP, power-management chips, packaging and testing technologies.

The Design Linked Incentive (DLI) programme is one of the government initiatives supporting semiconductor design companies. The India Semiconductor Mission says the scheme provides financial incentives and design infrastructure support for the development and deployment of semiconductor designs, including integrated circuits, chipsets, system-on-chip products and IP cores.

This creates a pathway for startups to develop intellectual property and products without necessarily building their own large-scale fabrication facilities.

Government Support Strengthens the Ecosystem

The India Semiconductor Mission (ISM) is working to develop a semiconductor and display ecosystem aimed at establishing India as a global hub for electronics manufacturing and design.

The government’s semiconductor schemes include support for semiconductor fabs, display fabs, compound semiconductors, silicon photonics, sensors, ATMP/OSAT facilities and semiconductor design. The semiconductor-fab scheme provides fiscal support of up to 50% of the approved project cost, while the compound semiconductor and ATMP/OSAT scheme provides fiscal support of 50% of capital expenditure for eligible facilities.

These programmes are intended to strengthen India’s capabilities across several stages of the semiconductor value chain.

SEMICON India 2026 Highlights Startup Opportunities

The growth in the sector comes as SEMICON India 2026 takes place from September 17–19 at Yashobhoomi in New Delhi.

The official event website says the 2026 edition includes a dedicated Startup Pavilion featuring 40 startups, along with startup pitching sessions, a DeepTech Hackathon, country and state pavilions, workforce-development programmes and industry discussions.

The event is jointly organised by the India Semiconductor Mission and SEMI and is designed to bring together semiconductor companies, startups, government organisations, research institutions and international industry participants.

Acquisitions and IPOs Provide Exit Routes

India’s semiconductor ecosystem is also beginning to generate exits. According to Tracxn data cited in recent reports, the sector has recorded 62 acquisitions and 42 IPOs.

Acquisitions have been the more common exit route, while several semiconductor and electronics companies have also entered the public markets. Recent listings include Tempsens Instruments in August 2026 and Merritronix in June 2026, according to the reported data.

The emergence of acquisitions and public-market exits provides additional evidence of the sector’s increasing maturity.

India Moves Beyond Chip Design

India’s semiconductor ambitions are increasingly extending beyond traditional chip-design services.

The ecosystem now covers electronic manufacturing, chip design, embedded hardware, packaging, testing, sensors, power-management technologies and other specialised semiconductor applications.

At SEMICON India 2026, the official programme includes sessions covering the semiconductor supply chain, electronic systems and products, advanced technologies, investment facilitation, sustainability, workforce development and startup connections.

This broader ecosystem could create opportunities for startups developing specialised semiconductor technologies while also supporting larger manufacturing and electronics companies.

A Growing Opportunity for Indian Startups

The expansion to more than 3,500 companies and $1.4 billion in cumulative equity funding demonstrates the scale that India’s semiconductor ecosystem has reached.

However, the funding remains concentrated among a relatively small portion of the overall ecosystem, with only 281 companies recorded as funded in the Tracxn data. The industry’s continued development will therefore depend on whether more early-stage startups can attract capital, commercialise their technologies and move from research and design into scalable products and manufacturing.

With government incentives, increasing private investment and greater participation from global semiconductor companies, India’s semiconductor startup ecosystem is entering a period of significant development.

For Indian entrepreneurs, the opportunity extends from chip design and semiconductor IP to packaging, testing, embedded systems, electronics manufacturing and advanced hardware technologies.

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