Making Smart Chips For Smart Indians

<p><em>Indian designed chipsets power satellites and future of mobility; now over $100 million private equity money will find these startups to build connected civilizations, says <strong>Vishal Krishna</strong></em><br><br>Indians have moved on from making potato chips to building chip sets for connected vehicles and smart cities. Analysts estimate that startups that have a combination of software, hardware and embedded systems experience can raise money. This industry has already raised close to $60 million now.&nbsp; Saankhya Labs, Ineda Systems and Si2 Microsystems are all betting big on the global industry. With words such as internet-of-things and smart cities floating around, these companies are out there to prove to the world that their technology is more than just a Make in India campaign.<br><br>Tucked away in a corner of Whitefield, a sprawling industrial complex, in Bangalore, is a small chip manufacturer called Si2 Microsystems. Upon entering its futuristic lab one can see machines building chips on substrate. These robots use golden thread to make integrated circuits with such precisionbecause the operating chipset ultimately lands in to defence satellites.Si2M specialises in manufacturing System-in-Package (SIP) modules that give birth to the connected machines that we see in daily life. From a mobile phone to the car and later ending with the connected lights, at home, everything carries a SIP module. To illustrate this further,&nbsp; a SIP is nothing but a combination of the central processing unit and its allied systems, which have different applications, packaged or stacked into a unit. The popular architecture is System-On-Chip (SOC) where functionalities are in independent chips. The engineers would know this better than the lay reader. The lay reader has to think of all functionalities in a box (SIP) versus individual chips (SOC) having their own boxes.<br><br>For this Rs 50-crore company, the year 2015 has become a turning point. After five years of hard work and becoming the preferred vendor for the Indian Space Research Organisation (ISRO) and work with several automobile OEMs, when founders, brothers Dinanath and Sanjay Soni invested $2 million on this lab, there were naysayers who said that they could never compete with the Chinese companies. &nbsp;<br><br>“We have to spend a lot more on marketing,” says Sanjay Soni, Director and co-founder of Si2M, chuffed about the kind of research that has gone in to building chipsets. The company hopes to raise the bar and increase their investment by $200,000 (Rs 1.3 crore) to spend on marketing activity. They are a manufacturing company and need not spend, on marketing, like a startup focused on consumers and, therefore, spending millions of dollars becomes necessary from imperative investors.<br><br>“These are ideas that can generate jobs in research,” says Sanchit Vir Gogia, CEO of Greyhound Research. It also adds up to the whole make in India campaign, which even Chinese electronics companies, like Xiaomi, are waking up to.<br><br>“Chinese companies have realised the potential of Indian software engineering and they are already setting up shop here to aid their growth in chip manufacturing,” says DinanathSoni. The brothers add that the buzz around IoT and growing defence spends has made many small and medium enterprises, globally, buy their SIP modules because they offer high value in performance. “We are a premium company. Our research allows a soldier to carry the least amount of payload because the hardware is miniaturised,” says Dinanath Soni.<br><br>Why are they important? Rs 48,000 crore has been allocated to the building of smart cities, cars are going to have more electronics in them - 30 per cent of the cost of manufacturing is going to be on software-&nbsp; and there is this whole campaign around the Internet of Things and Everything&nbsp; (IOT&amp;E). The number of wearables in the world that connect to larger smarter systems is also going to go up.&nbsp; IDC, the research firm, predicts that the worldwide wearables market will reach a total of 45.7 million units in 2015. From there, the market will reach a total of 126.1 million units in 2019, resulting in a five-year CAGR of 45.1 per cent. No wonder automobile software centres like Robert Bosch Engineering India (RBEI), Mercedes Benz Research and Development India along with chipset manufacturers like Freescale and Texas Instruments are playing a major role in investing in Indian R&amp;D.&nbsp; Robert Bosch filed 179 patents in 2013 and 80 in 2014.<br><br>“The use of deep research on chips for the global automotive industry for safety and semi-autonomous driving is happening out of India,” says Manoj Koul, Director-Product Development, Texas Instruments. &nbsp;<br><br>Another startup that has taken this deep dive in to making a standard chip for the wearable industry is called Ineda Systems. This Hyderbad-based company has raised a total of $43.3 million and has been backed by the likes of Cisco Systems. “There will be several billion wearables in the market and the industry is in need of low cost and low power consuming processors,” says Balaji Kanigicherla, CTO and co-founder of Ineda Systems. The company’s first big launch with a smart phone chip manufacturer is to happen in another six months. Ineda’s processor is an SOC, unlike a SIP of Si2M. &nbsp;<br><br>Saankya Labs is building a solution that brings different standards of digital and analog TV on to a single chip. The have raised $5 million from Intel Capital.<br><br>These chip manufacturers have taken a giant leap of faith and their products will be defined in the era of the smart city or the smart car. It is also a time of make or break for these companies. However, it looks like the world wants to make these Indian companies leaders in building cost effective and powerful chips with quality software applications. No wonder the likes of Intel and Qualcomm are betting big on Indian talent. Perhaps there will be many more companies like these chip makers.<br>&nbsp;</p>