Cyient Semiconductors, the newly established subsidiary of Cyient Limited, will focus on developing power-efficient custom chips specifically for India’s growing data centre and industrial automation sectors, backed by a ₹900 crore ($100 million) investment commitment from its parent company.
“A lot of the data centres today, the operational cost can be lowered if you have better chips in power,” said Suman Narayan, CEO of Cyient Semiconductors. He emphasised that India’s semiconductor market could reach approximately ₹25 lakh crore ($300 billion) in the coming years, representing a significant portion of the projected $2 trillion global market by 2032.
The company plans to capitalise on India’s talent pool of semiconductor designers, with Narayan noting that “20 per cent of the world’s semiconductor designers sit in India today” among the country’s 1.5 million annual engineering graduates. Cyient has partnered with several Indian universities including IITs and IIITs to access this talent pipeline.
Krishna Bodanapu, Executive Vice Chairman and Managing Director at Cyient, spoke about how important it is for India to build its own semiconductor and electronics industry. “At some point, the expectation is that the import of electronics will cross the import of oil even for India. And that’s a very significant risk,” he said, pointing out that without electronics, many systems—especially in manufacturing—could come to a halt.
He agreed with the government’s initiative in treating chips and electronics as a national priority and highlighted the steps taken, like the PLI scheme, to boost local manufacturing and develop semiconductor-related knowledge in the country.
The company will initially target industrial applications including smart grids, electric mobility, and smart meters specifically designed for Indian conditions. “Our ability to create chips to address this is one opportunity,” Bodanapu explained, adding that the Indian market for electric two-wheelers requires customised, cost-effective semiconductor solutions.
Unlike players like NVIDIA focused on cutting-edge chips in the 3-7 nanometre range, Cyient Semiconductors will concentrate on mixed-signal analogue chips in the higher nanometre range (around 125 nanometres). These chips are critical for power conversion in data centres, which currently lose between 5-15 per cent efficiency during power conversions.
“Today, if you just think about 2 million GPUs, they consume about 2.7 gigawatts of power. That’s like setting up nuclear power plants all over the place to power these data centres,” Narayan said.
When questioned about sector-specific focuses, Narayan said the company would eventually expand to automotive and medical sectors after establishing its industrial base. For now, the focus remains on “building custom silicon that really stems from power” applications.
The company is also seeking external funding beyond the parent company’s investment. “We’re engaged with bankers and predominantly looking at financial investors and family offices,” said Ramya Mohan, CFO and Head of Corporate Development, without specifying exact figures.
Cyient executives emphasised their established track record in semiconductor design, having delivered over 40 custom silicon designs and 5 million chips annually with approximately 400 engineers globally.
The parent company had previously announced the restructuring in November 2024, involving the transfer of semiconductor operations from multiple global locations to the new subsidiary for a total consideration of ₹313.60 crore, including operations in India (with a Taiwan branch), the US, Germany, and Belgium.
“This is just the beginning,” said Mohan, describing the company’s ambitions to become a leader in India’s growing semiconductor ecosystem.
The shares of Cyient Limited closed today at ₹1,159 up by ₹37.80 or 3.37 per cent on the NSE and that of Cyient DLM Limited ended at 437.65 up by ₹23.35 or 5.64 per cent.
Published on April 8, 2025
