India’s semiconductor ecosystem grows to 3,557 companies, funding reaches $1.4 billion: Report

India’s semiconductor ecosystem has expanded to 3,557 companies, with 281 companies raising equity funding, according to a Tracxn report.

The sector has attracted funding of $1.4 billion and recorded 62 acquisitions and 42 IPOs. Companies raised $776 million over two years covered by the report.

Semiconductor funding rises sharply

India’s semiconductor sector raised $473 million in 2025, compared with $114 million in 2024. The sector has attracted $228 million in funding in 2026 so far.

Large private equity transactions have driven much of the increase. Noida-based ILJIN Electronics raised $198 million in September 2025, while Bengaluru-based Tessolve Semiconductor raised $150 million in the same month.

Kochi-based SFO Technologies raised $82 million in March 2026. Other major recent rounds include $33 million raised by RRP Electronics and $30 million by Coreel. Bengaluru-based C2I Semiconductors raised $16.7 million in May 2026 after raising $15 million in February. HrdWyr raised $13 million in a Series A round.

Bengaluru remains the biggest semiconductor hub

Bengaluru has the largest number of semiconductor companies in India, with 626 firms. Pune follows with 220 companies, Mumbai with 210, Delhi with 185 and Hyderabad with 176. Tracxn’s leading companies include Dixon Technologies, Tessolve Semiconductor, Kaynes Technology, Mekr Technologies, Sasken, Mindgrove and Morphing Machines.

Electronic manufacturing gets the most funding

Electronic manufacturing services was the most funded semiconductor business model over the past year, attracting $89 million across two rounds. Embedded hardware followed with $51.9 million across six rounds, while power management integrated circuits received $31.7 million.

Fabless semiconductor manufacturers raised $27.3 million across six rounds, while system-on-chip companies raised $15 million. The fabless segment recorded strong growth, with funding rising 1,137% from the previous period and the number of funding rounds increasing 500%.

Other segments include packaging and testing, optoelectronics, MEMS sensors, communication ICs and image sensors.

42 companies emerge as potential billion-dollar businesses

Tracxn has identified 42 semiconductor companies in its “Minicorn” category. It defines a Minicorn as a company likely to achieve a valuation of $1 billion in the medium to long term. Mekr Technologies has the highest Tracxn Score at 67.4, followed by Mindgrove at 66.3 and Morphing Machines at 65.9. The list also includes Indigrid Technology, AGNIT Semiconductors, Calligotech, Coreel, HrdWyr, Vervesem, VVDN, Netrasemi and iVP Semiconductor. C2I Semiconductors was founded in 2024, while HrdWyr was founded in 2023.

Semiconductor IPO activity continues

India’s semiconductor ecosystem has recorded 42 IPOs. Companies took an average of 16.5 years from their first funding round to an IPO. The average funding raised before an IPO was $11.2 million, while the average IPO market capitalisation was $145 million.

The largest IPOs include Syrma SGS at $472 million, Kaynes Technology at $418 million, Data Patterns at $370 million, Avalon at $347 million and Dixon Technologies at $311 million. Recent listings include Tempsens Instruments, which listed in August 2026 with an IPO market capitalisation of $263 million, and Merritronix, which listed in June with a $27 million market capitalisation.

Acquisitions show growing global interest

The sector has recorded 62 acquisitions. Tracxn said companies took an average of 11.8 years from their first funding round to an acquisition. Recent transactions include Infineon’s acquisition of C2I Semiconductors, Quest Global’s acquisition of BITSILICA and MulticoreWare’s acquisition of Simulus Automation.

The activity points to growing global interest in Indian semiconductor engineering and design.

Focus shifts beyond chip design

Recent developments tracked by Tracxn show increasing activity in packaging, testing and advanced electronics manufacturing. Tessolve has collaborated with Intel Foundry on advanced package design, while ASIP Technologies has announced an investment in an advanced chip packaging facility in Visakhapatnam.

The report also highlights a partnership between Entegris and Tata Electronics around the Dholera chip fab. Tata Electronics is planning to add 15,000 workers, while Dixon Technologies and Vivo have received approval for a joint venture aimed at boosting local smartphone production.

India’s semiconductor push is expanding into packaging, testing and manufacturing.

Funding remains concentrated

The Tracxn data shows that India’s semiconductor ecosystem is now much broader than the headline chip-fab investments suggest. More than 3,500 companies are part of the ecosystem, but only 281 have raised equity funding. The largest rounds continue to go mainly to established manufacturing and semiconductor services companies, while newer chip-design startups are raising smaller seed and Series A rounds.

The 42 Minicorns, 62 acquisitions and 42 IPOs point to a growing pipeline of companies moving towards scale.