Category — Semiconductors
American VC Walden International will begin investing its $100 million India semiconductor venture later this year and has already identified four startups, two each in Bangalore and Hyderabad.
The EE Times said that Walden’s new fund comes at a time when the central government has also announced new initiatives for the semiconductor industry. Last month the Indian government gave an “in-principle” approval for two international consortia to establish India’s first semiconductor fabrication plants with a set of incentives and subsidies. One consortium comprises Israel’s Tower Semiconductor, India’s Jaypee group, and IBM, while the other has Franco-Italian STMicroelectronics, Hindustan Semiconductor Manufacturing, and Malaysia-based Silterra as members.
“It [semiconductors] is a very valuable space and exits are generally large, over $300 million or more,” said Lip Bu Tan, chairman and co-founder of Walden International.
Only a few technology firms such as Tejas Networks and Cosmic Circuits have successfully raised capital. “In India, funding of semiconductor startups which are in chip and systems designs is [quite rare],” says Sanjay Nayak, founder of telecom products maker Tejas Networks, which first raised angel funding of $5 million from investors including technology entrepreneur Gururaj Deshpande. Tejas later received around $73 million in risk funding from global investors such as Goldman Sachs, Battery Ventures, Sandstone, and Intel Capital.
What this means
The prevailing wisdom is that Korea, Taiwan and China are the Asian countries to turn for relating to any activity in semiconductors, with the exception of software. Walden is challenging the status quo, something that good VC excel at. Let’s watch if their investments go beyond fab-less companies.
November 3, 2013 No Comments
The International Energy Agency predicts the U.S. will have 17 GW of solar capacity by 2020. Both India and China, starting from very low bases have ambitious plans to beat that number. India aims to build up to 20 GW of solar energy by 2020.
In December the country auctioned 620 megawatts of solar projects to 37 companies, such as Lanco Infratech Limited, KVK Energy Ventures, and Rajasthan Sun Technique, a unit of Anil Ambani’s Reliance Power Ltd. Other companies selected include Indian Oil Corporation (a public sector undertaking) , automaker Mahindra & Mahindra Limitd, construction company Punj LLoyd Ltd. and Azure Power.
The auction awarded 470 megawatts of solar thermal capacity and 150 megawatts of photovoltaic capacity. For photovoltaic projects, energy from the sun is converted directly to electricity using semi-conductor like technology, while in solar thermal projects, the sun’s energy is first used to make steam which is then used to generate power.
The average bid for solar thermal projects was for 11.48 rupees per kilowatt-hour compared with the government rate of 15.31 rupees. Deepak Gupta, secretary of the Ministry of New and Renewable Energy, said that the average bid for photovoltaic plants was to sell a kilowatt-hour of electricity at 12.16 rupees (27 U.S. cents) compared with the government’s proposed rate of 17.91 rupees. The global average rate solar thermal developers need to earn is about 28 U.S. cents (12.70 rupees) a kilowatt-hour, according to New Energy Finance data quoted in Business Week.
According to an article in the Wall Street Journal, “At current capital costs of 150 rupees-160 rupees million for each megawatt, solar projects are only profitable if tariffs are at least 14 rupees/kWh,” said Narasimhan Santhanam, co-founder of Energy Alternatives India, a consultancy firm. The Journal also quoted Deepak Verma, chief operating officer at consultancy Emergent Ventures India,who said “in order to build viable projects at these low tariffs, developers will have to cut corners and squeeze vendors.”
January 17, 2011 No Comments