India’s Semiconductor Sector Draws $1.4Bn; Bengaluru Takes 40.1% Share

India’s semiconductor sector has attracted $1.4 billion in cumulative equity funding, with half of that amount raised since 2025, according to Tracxn’s Semiconductors – India Report, released on Tuesday.

Of the total funding, $701 million has been raised since 2025, including $228 million in 2026 so far. The report tracks 3,557 companies in India’s semiconductor ecosystem, of which 281 have raised funding, including 142 that have received equity funding.

The latest funding activity also shows that capital is increasingly moving towards larger companies and bigger deals. Tessolve Semiconductor has emerged as the largest recipient of cumulative funding, while ILJIN Electronics recorded the biggest funding round since 2025.

ILJIN, Tessolve Lead Semiconductor Funding

Tessolve Semiconductor has raised $213 million in cumulative funding, making it the most-funded company in India’s semiconductor sector, according to Tracxn. ILJIN Electronics follows with $198 million, while VVDN has raised $129 million.

ILJIN Electronics also recorded the sector’s largest funding round since 2025, raising $198 million through a private equity round in September 2025. Tessolve Semiconductor followed with a $150 million PE round during the same month.

The funding trend comes as the sector sees a shift in the types of businesses attracting capital. Tracxn said Electronic Manufacturing Services has been the biggest funded business model since 2025, raising $313 million, including $89 million in the trailing 12 months.

Embedded Hardware was the second-largest category, raising $51.9 million since 2025. Other funded segments include Power Management Integrated Circuits and Fabless Semiconductor Manufacturers.

Bengaluru Accounts For 40% Of Equity Funding

Bengaluru remains the main hub for India’s semiconductor ecosystem, with 626 companies based in the city, or about 18% of the 3,557 companies tracked by Tracxn.

The city accounts for 40.1% of the sector’s total equity funding. Noida follows with 16.4%, while Gurugram, Kochi and Hyderabad account for 10.7%, 8.8% and 6.2%, respectively.

Tessolve Semiconductor, Coreel and C2I Semiconductors are among the companies contributing to Bengaluru’s position as the country’s leading semiconductor funding hub.

Acquisitions Remain Key Exit Route

Acquisitions continue to outnumber IPOs as an exit route for Indian semiconductor companies. The sector has recorded 62 acquisitions compared with 42 IPOs as of 2026 YTD, Tracxn said.

Companies reaching an acquisition did so in an average of 11.8 years from their first funding round, compared with 16.5 years for companies that went public.

The sector’s largest recorded acquisition is eInfochips, which was acquired for $282 million. More recently, Tempsens Instruments went public in August 2026, while Merritronix listed in June 2026.