The Foundry - Part 01: The Semicon Flywheel.
Capital-A’s thesis on the future of manufacturing
India’s semicon landscape has evolved since the mid-60s. Although India’s semicon journey started almost during the same period when countries like the US, EU, Japan, China, etc., it lacked the required infrastructure and policy India’s semiconductor landscape has remained consumption-driven for a long time.
Today, India consumes ~$52B worth of semiconductors, yet <5% of these are manufactured domestically – indicating a massive opportunity for corporates and startups to localize the supply chain.
However, India did build a strong design base, having served as an outsourced services provider for global semicon players. According to Tracxn, during 2025, Indian semicon startups received VC funding of ~$44M (vs. ~$28M during 2024), and most of this has been concentrated on the R&D & Design segment of the value chain. We expect that this trend will continue to grow in the coming years, especially as whitespaces continue to emerge in design.
At Capital-A, we are witnessing an emergence of niche adjacency themes that have the capability to develop sub-ecosystems around the ‘core semiconductor value chain’. We strongly believe that similar adjacency stories in semiconductors are emerging, and we are excited to explore them.