India's Fabless Chip Startups Face a Commercial Reality Check

A policy change that banned non-certified imported CCTV cameras from April 2026 created an opening for Indian chip startups. Mindgrove Technologies struck an alliance with Prama India in June to integrate its vision system-on-chip into domestic surveillance hardware. But the memorandum of understanding is not a commercial order. The prototype arrives by year-end, followed by Prama's qualification process.

BigEndian's journey is a timeline. It started work on its chip in September 2024, sent the blueprint to a Taiwan foundry in January 2025. The first silicon was expected in July. It is arriving in September. The prototype around November. Revenue? Not before April 2027, three years after the chip work began.

Both companies are fabless–they design but rely on outside manufacturers. They have spent significant capital getting from design to production. Now they must find customers.

The cost disadvantage hits early. BigEndian’s co-founder Sunil Kumar says the pool of intellectual property needed to kick-start a chip can cost $5 million for an Indian company, compared to less than $2 million for a Chinese rival. A component his startup budgeted at $1.80 ended up costing about $8 after currency, logistics and insurance.

Foundry delays compound the problem. Kumar says BigEndian was told it would take three months to secure a memory-chip requirement; US-based companies he knew could get the same component in two weeks. Its prototype took nearly seven months instead of four. Indian startups are often deprioritised against larger clients ordering 100,000 wafers a month, says Raja Manickam, founder of iVP Semiconductor.

Some startups are trying to line up customers before design begins. HrdWyr signed with boAt before building a custom chip for wireless earbud charging cases. Sampige's Parag Naik, who sold his previous company Saankhya Labs for ₹284 crore, says having a customer upfront reveals the target price, volume and unique problems. But even established semiconductor executives struggle. Varma Konala of Pradhi Semiconductor spent 25 years at Intel. “The Intel badge opened doors for me. As a startup, it's not easy,” he says.

The government is aware of the gap. MeitY Secretary S. Krishnan says the administration is working on aggregating demand from multiple Indian companies to improve foundry terms. He does not want a protected market, though. “We are not a closed economy. We are not going to say you should use only us,” Krishnan says. Indian chips must eventually compete globally. But he concedes some support–through procurement or subsidies–may be needed before they reach scale.

The CCTV model is one possible template. Krishnan says the government is studying whether similar mandates could work for smart meters, IoT devices and e-passports.

For the startups, the clock is ticking. “For us, each month is expensive. Every delay is expensive,” says BigEndian's Kumar.

AlphaScala's data shows NVDA at 68/100 (Moderate) and QCOM at 48/100 (Mixed), reflecting the competitive pressure global semiconductor giants already exert on smaller players.