India’s semiconductor industry is growing faster than ever, with government initiatives like new project announcements, global supply-chain shifts, thus putting semiconductors at the forefront. Yet there are two problems that can’t be fixed, which are talent and semiconductor shortages.
But as the India Semiconductor Mission is expanding, startups are facing a major challenge to hire industry-ready VLSI engineers like those with skills in RTL design, verification, DFT, and physical design. Hence, they are unable to scale to deployable silicon and product-ready systems, hindering their growth.
But why is the issue arising? Let’s check why semiconductor startups are struggling to hire Skilled VLSI Engineers in India.
Why is There a Struggle To Find Skilled VLSI Engineers?
Unlike market expectations, the demand for semiconductors spiked post-pandemic due to increased demand for gadgets. Press Information Bureau of GOI has shared that the India semiconductor industry market was domestically between ~$40-$50B in 2024-25, which is project to $100-$110B by 2030.
On the supply end, India has an immense number of design engineers, where nearly ~20% of the global IC design talent, and that tends to expand.
However, there’s a lack of end-to-end engineers who can work on ready-to-ship VLSI needs in semiconductor startups in India. This creates a bottleneck in professional workflows, and hence, one of the reasons why India is facing semiconductor shortages.
Though India has a large design workforce of around ~125,000 in IC design, only a fraction of them are industry-ready due to a lack of real-time education and preparedness. It becomes crucial for startups as they cannot afford training costs.
There’s a need for a detailed yet advanced curriculum-based VLSI design course.
Talent Availability Does Not Align With the India Semiconductor Mission
The ISM program is boosting the growth of India’s chip industry in multiple ways. A few months ago, on August 28, 2025, the ISM launched a new OSAT facility in Sanand. Such facilities test and pack chips that phones, laptops, and cars use.
Some reports also state that as a part of the ISM, various new projects are approved, like chip manufacturing units called fabs, ATMP units that assemble, test, and package chips. Moreover, these are showing growth and promoting other industries.
Yet here also lack of skilled talent is an obstruction are professionals are needed for roles and reasons in deep tech startups in India for:
- STA: Professionals who test if chip signals are running on time.
- Timing Closure: Fix timing issues so the chip does not slow down.
- Verification: To verify the accurate design and development of the chip design.
- Physical Design: To assemble all parts of the chip properly.
All of these purposes are of great skill, and there’s no scope for error because they can’t be acquired overnight.
Why Are Semiconductor Startups Struggling More Than Big Companies?
- Experienced VLSI Engineers Prefer Stability Over Startup Risk
VLSI is a high-stakes sector, meaning the results are crucial, plus small errors can prove costly. Thus, there’s no room for error. So, experienced engineers prefer stable pay, structured career growth, and predictable project timelines that big MNCs and renowned design units provide.
Though startups provide equity and better responsiveness, for mid-level engineers, it’s a risk/reward situation that they find less lucrative, especially if the startup is in an initial phase or is proving its technology.
- Many Engineers Believe VLSI Has A Slow-Payoff Than Software
A common ideology amongst fresher engineers is that VLSI has a longer learning curve, plus the bar is higher for industry-ready engineers. Thus, they rely on software roles that provide:
- Faster learning-to-salary cycles.
- More job opportunities across various cities.
- Easy switch of domains.
Here’s where VLSI needs a greater understanding of digital logics, CMOS, and computer architecture, with hands-on knowledge and often experience. Thus, they perceive it as a slow-payoff option and lean on software roles.
- Lack of Industrial Readiness is Not A Degree
Most of the startups notice that resumes speak of professionals having VLSI degrees but lack skills, which is evident in workflow, thus hampering their work. This happens because:
- The university curriculum greatly emphasizes theory.
- Less or inconsistent access to industry-standard EDA tools.
Thus, students graduate without exposure. Besides, the Information Technology and Innovation Foundation (ITIF) also suggests that India has plenty of engineers, but only a small chunk is industry-ready.
- Some Startups Need very Specific Skill Sets
Many startups don’t hire comprehensive VLSI engineers but professionals who specialize in one of the following processes:
- RTL design
- Chip Verification
- DFT (scan, ATPG, testability)
- Physical design (PnR, STA, power, timing closure, etc.)
- Analog/mixed-signal wherever relevant
Besides, startups need engineers who can start work execution quickly, as their 10-30 person small teams can’t spend months on training or assigning people for the purpose.
- Global Talent Pressure Adds Competition To India
The shortage of VLSI engineers expands beyond the borders as well. Deloitte, some time ago, has specified that there is an increasing global semiconductor talent gap while industry expansion demands a major workforce boost.
When global demand increases, Indian engineers seek opportunities abroad, even if remote, which makes retention challenging for Indian startups.
However, VLSI roles need:
- Great technical depth.
- Strong digital fundamentals like pipelining and clocks.
- A strong area of specialization, like verification, instead of casual exposure.
- Familiarity in working with tools like debugging, flows, versioning, constraints, etc.
- Give reasoning about performance, power, and area tradeoffs.
- Execution skills.
- Debugging procedure.
- Comfort level with agile approaches as requirements change.
- Crisp communication with clients and internal teams.
Hence, structured upskilling does play a role, as random YouTube videos don’t add production confidence. Meanwhile, universities’ deploy having structured degrees can’t help, as EDA licenses are expensive, hardware projects need a longer time, industry-grade verification, and other processes are difficult to simulate.
But as ISM expands its manufacturing and demand is rising, there’s a clear demand for an aligned curriculum that caters to Industrial demand.
Here’s where a wiser approach helps. The M.Tech VLSI in such a scenario is an asset as they provide the required thus helping with industrial readiness.
Final Words
With the growth of the India Semiconductor Mission, its industry is growing faster than ever. However, there persists a high skill gap. While there are many engineers in software roles, there’s a lack of trained professionals in such a high-paying industry whose demand is increasing.
Hence, unemployed engineers or those looking for a job switch can capitalize on this industry for a prosperous career with structured learning. Thus, startup-friendly founders will hire more at huge packages, thus increasing prestige as well.
