With a imaginative and prescient to allow firms to develop semiconductor IPs in India, the Semiconductor Fabless Accelerator Labs (SFAL) has incubated 5 fabless design startups chosen for DLI, three of which have secured funding. Sridhar Kaip from SFAL reveals its secret to turning into safal in a nascent semiconductor ecosystem to EFY’s Yashasvini Razdan…
Q. What are the challenges confronted by fabless startups in India?
A. Most startups face widespread challenges within the pre-idea and early phases. Nevertheless, for fabless startups, the first problem is funding. Most traders are desirous about fast returns, however the gestation interval for return on funding (ROI) within the semiconductor {industry} is longer. This makes funding an enormous problem as a result of tape out of even a easy check chip prices between ₹5 million and ₹10 million.
This expenditure usually comes after 18 months of improvement—for a easy industrial software chip, not a fancy one.
Q. How does SFAL resolve these challenges?
A. SFAL educates traders on the timeline and ROI expectations within the semiconductor area. We clarify that success can’t be measured inside six months; it takes time, and traders should be affected person. Second, we guarantee correct connections are made and supported by qualitative evaluation. From the choice course of to ongoing analysis, we offer an in depth technical report to assist traders make knowledgeable choices.
This strategy addresses the first challenges and ensures we place the ecosystem for long-term success.
Q. What particular providers and infrastructure do fabless startups incubated below SFAL get?
A. We offer help throughout 4 totally different verticals — fundamental necessities, corresponding to administrative help, analysis help, entry to costly digital design automation (EDA) instruments and funding help. Fundamental necessities embrace delicate help, corresponding to offering house, authorized help, assist with establishing the corporate, corresponding to ROC-related (Registrar of Firms) necessities, and connecting with companions. We’ve round 50 mentors who’re C-suite executives who consider new concepts and the startup’s potential to generate enterprise. EDA instruments are a crucial useful resource, and their price has been a big barrier for a lot of startups. SFAL gives entry to front-end instruments, tape-out instruments, help for verification, validation, and connections with companions for pre- and post-sale necessities.
SFAL additionally connects startups with government-backed funding ventures, such because the Karnataka authorities’s initiatives, non-public ventures and particular person traders. Our ecosystem ensures startups can join with these funding actors to fulfill their monetary wants.
Q. Might you clarify SFAL’s enterprise mannequin?
A. SFAL is independently ruled by its governing council members. Assist is crucial because of the excessive prices concerned within the instruments and different actions. A lot of the actions executed by the startups are structured both by an fairness mannequin, the place we take a stake within the startups, or by way of a pay-and-use mannequin for instruments. When startups mature and scale as much as the subsequent ranges, they exit from our fairness holdings, which gives us with returns. After we help startups of their funding actions, the strategy varies relying on their maturity stage and particular methods. In such instances, we could take a portion of the returns, much like any funding mannequin.
Whereas this income sustains SFAL’s operations, the mandatory environmental help for fabless actions requires vital backing from the federal government. We additionally obtain funding from the federal government of Karnataka.
Q. What position do mentors and contributors play within the ecosystem?
A. Mentors play an important position by dedicating their time and experience to help startups. Many of those mentors, usually from famend organisations, have interaction deeply with startups, contributing with out monetary incentives. Their involvement stems from a real want to provide again to society and advance the sector of science.
Q. What are the factors for choosing a startup for the SFAL programme?
A. Our unbiased evaluators embrace enterprise capital leaders, enterprise leaders, and expertise specialists particular to the offered proposal. They assess the concept from a expertise, enterprise, and monetary stability perspective and submit the evaluate to the governing council of SFAL, which then onboards the startups in the event that they meet the {qualifications}.
The evaluators test the feasibility, degree of experience inside the workforce, backgrounds, and potential to ship on the technological entrance. From a enterprise perspective, they analyse the proposed positioning as a product, the goal clients they’ve recognized, the aggressive panorama they’re navigating, market potential and income technology plans, and determine on areas the place help is required.
SFAL doesn’t outright reject any thought; as a substitute, we offer steerage and help in areas the place they fall brief.
Q. How do ecosystem companions contribute to offsetting prices for startups?
A. The help from our ecosystem companions is invaluable in offsetting prices for startups. EDA instruments and associated assets may be prohibitively costly for particular person firms, even with sure concerns. Nevertheless, procuring these assets by the SFAL considerably reduces prices, making them extra accessible.
Our companions together with firms like Synopsys, Siemens,ARM, Marvell, and TESSOLVE, supply assets at significantly decrease costs than market charges. For instance, Intel has offered a lab for FPGA (Subject Programmable Gate Array)- associated tasks, freed from price for all startups. Mentor Siemens has equipped an FPGA emulation platform at a closely discounted fee. These contributions are crucial in enabling startups to innovate and thrive.
Q. Are there plans to develop partnerships or develop new initiatives?
A. Sure, we’re actively seeking to develop our community of companions strategically to help our targets, notably in creating crucial mental properties (IPs). One initiative into consideration is IPen, which has many IPs prepared for execution. This aligns intently with SFAL’s imaginative and prescient, and we’re exploring methods to combine it into our plans.
Moreover, SFAL’s repute has attracted curiosity from new potential companions, a lot of whom are reaching out to collaborate and contribute to the ecosystem. These partnerships, together with strategic initiatives, will assist us attain the subsequent degree of progress. We intention to roll out concrete plans beginning January subsequent yr.
Q. What’s the distinction between SFAL and different fabless accelerator packages?
A. From what we have now seen, there isn’t any equal to an industry-driven accelerator like SFAL wherever. Whereas universities drive some initiatives, these are usually centered on the college degree. Many university-driven packages have restrictions on utilizing the EDA instruments for industrial deployment. In distinction, the instruments offered by SFAL are geared in direction of industrial functions to help startups in attaining industrial milestones, corresponding to tape-out and, finally, full commercialisation.
Whereas college packages deal with analysis, SFAL evaluates and assesses speedy product necessities and helps industrial actions to attach startups to mandatory enterprise networks and alternatives.
SFAL additionally handles proposals from exterior entities and people inside the Authorities of Karnataka or India to attach them with the suitable assets and stakeholders.
Q. How do you measure the success of SFAL?
A. We take into account it successful for SFAL when a startup may be chosen for a extra intensive programme just like the Design-Linked Incentive (DLI) Scheme, which invests virtually ₹150 million—roughly $2 million—an honest degree of funding, which signifies success. Chips to Startup (C2S) Programme additionally comes near this degree, involving college relations outdoors the SFAL ecosystem.
The second parameter of success is when a startup secures a enterprise order that’s appreciable sufficient to drive the entire enterprise execution.
The third parameter is when the startup secures substantial exterior funding to match its necessities for the subsequent degree of progress and even exit from SFAL, as SFAL holds fairness in a few of these firms.
Q. Might you give us some metrics for the parameters you simply talked about?
A. Up to now, shut to 5 firms have been chosen for DLI, three together with Morphing Machines have secured funding, and two have exited from SFAL and are performing very properly. For instance, Lightspeed AI, one among our firms, relocated to Singapore and is excelling in photonics and optoelectronics.
Q. Together with your expertise working with fabless startups, how do you consider India’s present place within the world semiconductor ecosystem?
A. A helpful solution to perceive India’s place is thru a pyramid mannequin. On the prime are mature markets such because the US, Europe, and Japan, supporting roughly 2000 firms within the fabless semiconductor house. Beneath them are ecosystems corresponding to Israel and Taiwan, with round 1000 firms. India, nonetheless, at the moment has fewer than 150 startups on this area.
Over the previous 5 to 6 years, India’s semiconductor ecosystem has proven promising progress, however it’s nonetheless in its nascent stage. Karnataka, particularly Bengaluru, holds a novel benefit because of its focus of captive centres, multinational firms, and considerable semiconductor expertise. Nevertheless, when it comes to homegrown merchandise and IP, we stay at an early stage.
Q. What steps are wanted to succeed in the subsequent degree of progress on this area?
A. To realize the subsequent degree, we should construct crucial IPs. It is a key focus space for SFAL. Some initiatives will contain leveraging present assets, whereas others would require strategic improvement and growth of core competencies.
The Authorities of India has already introduced initiatives to help this effort, and a number of other startups are stepping ahead to contribute. Inspiration may be drawn from Belgium’s journey 40 years in the past. Belgium, with no vital presence in electronics or semiconductors, initiated government-backed packages to help the ecosystem. Right now, it generates roughly $2 billion in revenues from a self-sustaining semiconductor ecosystem.
Q. What position does the federal government play in shaping this progress?
A. The MeitY and Karnataka governments have engaged in early-stage discussions and incorporating learnings from initiatives like SFAL into the Design Linked Incentive (DLI) and Chips to Startup (C2S) programmes. These efforts are pivotal in making a basis for the ecosystem’s improvement.
India can change into a worldwide hub for fabless semiconductor innovation by aligning expertise, strategic initiatives, and governmental help. We’re on the beginning line of this journey, and with sustained effort, we have now the potential to attain outstanding progress, remodeling India into a big participant within the world semiconductor ecosystem.
Q. How has SFAL contributed to programmes like DLI and C2S?
A. SFAL has offered inputs to initiatives just like the DLI programme. Many startups chosen below DLI are a part of our portfolio. Our contributions and inputs from {industry} companions and organisations just like the India Electronics and Semiconductor Affiliation (IESA) have been instrumental of their success.
The C2S programme goes past software provisioning. Whereas the Centre for Growth of Superior Computing (C-DAC) manages instruments, monetary reimbursements endure rigorous processes dealt with individually. SFAL stays centered on enabling the ecosystem and supporting startups, guaranteeing assets are used successfully.
Q. With SFAL so tremendously entrenched within the fabless semiconductor ecosystem, why is C-DAC the implementation associate for the DLI scheme? Would a public-private partnership mannequin have been extra environment friendly?
A. C-DAC serves because the implementation associate, a job they’re well-suited for because of their experience in computing and associated domains. We deal with business-oriented aims, leaving the technical implementation to succesful companions.
Whereas occasional challenges come up, CDAC is totally able to dealing with implementation effectively. The governing council makes choices on crucial issues like software choice, with vital enter from SFAL. Nevertheless, we intentionally chorus from getting concerned in implementation to keep up deal with our main targets—aiding the federal government in guaranteeing general success for startups.
Q. While you’re at the moment situated in Bengaluru, are there any plans to develop to new areas to develop and help the semiconductor ecosystem throughout the nation?
A. SFAL is working with state governments to copy profitable fashions throughout varied areas. Regional focus permits us to utilise particular strengths, and establishing zonal centres of excellence centered on the next domains is significant for a mature ecosystem:
- Automotive: Prioritised in states like Uttar Pradesh and Karnataka
- Radio frequency (RF) and energy electronics: Appropriate for Odisha
- Slicing-edge communication and processing: Areas of curiosity in Gujarat and Andhra Pradesh
Bengaluru has made vital progress, however different areas are nonetheless nascent, requiring substantial improvement to attain their potential.
Q. What areas want extra authorities or {industry} intervention to strengthen India’s fabless ecosystem?
A. At the moment, I believe the federal government has been very supportive. Nevertheless, one piece of suggestions concerning the DLI is that the reimbursement course of poses a problem. For a startup, it could be higher if the funding on this scheme have been structured as a grant or by a unique mechanism. This suggestions has already been communicated, and I’m assured they’re engaged on it.
We are actually transferring into the IP-level stage, aiming to contain the native {industry} actively. This would come with utilizing and creating IP domestically to help these start-ups, specializing in IP-driven actions.
