Report: India shifts focus to specialized AI infrastructure and hardware
Industry analysts suggest India can build a foothold in the global AI market by focusing on niche infrastructure components rather than competing in general chip fabrication.
The Indian deeptech ecosystem is navigating structural challenges, including a lack of patient capital and high development costs, by re-evaluating its approach to AI. Instead of attempting to scale general-purpose computing power, experts and venture capitalists are identifying specific infrastructure layers where India can establish a competitive edge.
Key opportunities are identified in power management electronics, thermal cooling systems for high-density data centers, and interconnect technologies for data processing. Industry analysts argue that owning the intellectual property for these specialized components offers a sustainable business model through global licensing, circumventing the need to compete with major semiconductor foundries.
Evidence of this shift includes the acquisition of C2i Semiconductors by Infineon and the emergence of specialized firms like KuhlTherm and LightSpeed Photonics. These developments are supported by government initiatives such as the Design Linked Incentive scheme, which aims to formalize chip design capabilities and encourage the transition from service-based engineering to proprietary product ownership.