Electronic Component Manufacturing: A Competitive Landscape
Happy Friday! Uttar Pradesh and Gujarat are making significant strides to attract major electronic component manufacturers with innovative incentive schemes. Here’s what’s making headlines in today’s ETtech Morning Dispatch.
Key Developments in the Electronics Sector
Uttar Pradesh and Gujarat are drafting new incentive schemes aimed at drawing large-scale electronic component manufacturers to establish factories in their regions.
Current Situation
- Tamil Nadu has been proactive, implementing a program to match incentives under the Centre’s new Electronic Component Manufacturing Scheme (ECMS), supported by a Rs 23,000 crore package to enhance the electronics ecosystem.
- Gujarat is emerging as a hub for electronics and semiconductors, with prominent projects by Micron, CG Power, and Tata Electronics in Dholera and Sanand.
- Uttar Pradesh is positioning itself strategically, leveraging Noida’s growing reputation as an electronics manufacturing center.
- Karnataka already boasts a competitive Electronics System Design and Manufacturing (ESDM) policy. “We may revise some aspects, but it remains competitive,” remarked Gunjan Krishna, Karnataka’s commissioner for industrial development.
Also Read
Tata Electronics is set to establish a display semiconductor manufacturing plant in Gujarat in collaboration with Taiwan’s PSMC and Himax.
Future Outlook
The Centre aims to attract ₹30,000 crore in investments and create over 60,000 jobs in the next six years, building on the success of the smartphone Production-Linked Incentive (PLI) scheme. The objective is to double India’s 20% value addition in electronics within five years.
Funding and Growth in Logistics
Porter, an on-demand logistics platform, has successfully raised $200 million in a funding round, attaining a valuation of approximately $1.2 billion.
(L-R) Pranav Goel and Uttam Digga, co-founders of Porter
Deal Details
- This funding round includes both primary and secondary transactions, boosting Porter into the unicorn club with a valuation of $1.1–$1.2 billion.
- Notably, early investor Peak XV Partners has completely exited as part of this deal, while Kae Capital and Lightrock have partially sold their stakes.
- Vitruvian Partners also participated as an existing backer, with approximately $140–150 million arising from secondary sales acquired from early-stage investors.
Valuation Jump
- Porter’s valuation has more than doubled from $500 million in a 2021 round led by Tiger Global.
- This surge is attributed to significant business growth for the Bengaluru-based company.
- Operating revenue for FY25 is projected to exceed ₹4,000 crore, compared to ₹2,766 crore in FY24, according to sources.
Leadership Move in the Startup Scene
Peeyush Ranjan has joined Mukesh Bansal’s Meraki Labs as a partner, bringing his wealth of experience from Flipkart and Google.
Peeyush Ranjan, former CTO, Flipkart
Driving the News
Based in San Francisco, Ranjan will help expand Meraki’s presence in Silicon Valley while focusing intensively on artificial intelligence (AI). His role involves closely guiding entrepreneurs at Meraki on technology and product strategies.
Background
- Before joining Meraki Labs, Ranjan held the position of general manager and VP of engineering at Google, overseeing AI products like Google Assistant.
- Mukesh Bansal, co-founder of Myntra, has invested in various startups like Groww and Skyroot Aerospace through Meraki Labs.
Other Top Stories
Prosus’s $8.6 billion Investment in India: Dutch tech investor Prosus has committed $8.6 billion in India and continues to regard the nation as a key growth market, as stated by CEO Fabricio Bloisi in a letter to shareholders.
Challenges in AI Pilots
Despite significant investments in AI pilots, these may not always result in scalable businesses for tech companies, according to insights from industry experts.
Job Cuts in Big Tech
As Google continues to lay off employees globally, a trend of job cuts among major tech companies has become evident, emphasizing the shift towards heightened investment in artificial intelligence.
Global Picks We Are Reading
- US scraps Biden-era rule that aimed to limit exports of AI chips
- AI’s threat to Google just got real
- Sequoia leads $1.5B tender offer for sales automation startup Clay
Conclusion
The electronic component manufacturing landscape in India is evolving rapidly, influenced by state incentives and significant investments. Companies like Porter are thriving in logistics, while experienced professionals like Peeyush Ranjan are shaping the future of AI in new startups.
Questions & Answers
1. What states in India are actively attracting electronic component manufacturers?
Uttar Pradesh and Gujarat are drafting new incentive schemes to attract major electronic component manufacturers.
2. What is the projected investment aimed for by the Indian government in the electronics sector?
The Centre aims to attract ₹30,000 crore in investments to create over 60,000 jobs over six years.
3. Who has joined Meraki Labs as a partner?
Peeyush Ranjan, former CTO of Flipkart, has joined Mukesh Bansal’s Meraki Labs as a partner.
4. What valuation did Porter achieve following its latest funding round?
Porter attained a valuation of approximately $1.1–$1.2 billion, making it a unicorn.
5. Why are tech companies facing challenges despite investing heavily in AI?
Investments in AI pilots may not always translate into scalable businesses, as highlighted by industry experts.
