Mapping the Path of Innovation: Raghavendra Jha, Tessolve’s CFO, on India’s Semiconductor Momentum

CFO India interviewed Raghavendra Jha, CFO of Tessolve, discussing India’s semiconductor growth, government incentives, and strategic financial priorities.

Coupled with the government’s substantial incentives and the influx of global players, India is poised to enable a new wave of semiconductor innovation, impacting both domestic and international markets.

CFO India recently interviewed Raghavendra Jha, CFO of Tessolve – a semiconductor-focused engineering services company, who shared insights into the sector’s evolution amidst global challenges and India’s burgeoning potential. His perspectives highlight a strategic focus on aligning service capabilities with dynamic semiconductor production and innovation demands. He optimistically anticipates leveraging India’s proactive policies and growing manufacturing setups to fuel growth, foreseeing collaborative opportunities ahead.

Below are the edited excerpts from the interview:

Q. Given the government’s increased focus on advancing India’s semiconductor and electronics industry, what strategies are you prioritising to leverage the financial incentives and regulatory frameworks introduced?

Raghavendra: We are seeing similar incentives and encouragement for the semiconductor industry in other countries. A global presence presents different opportunities. In India, the current promotion and progression are more linked to production and manufacturing. We have not yet seen any incentives in the service sector. However, the current announcements regarding manufacturing setups will ultimately benefit Tessolve. These setups are at an early stage, and the GoI has committed many incentives with favourable policies. Assuming production begins in those specific plants, they will need partners like Tessolve. We are in advanced conversations with most of them, and we can provide design, test, and embedded system capabilities to help them succeed. This represents a significant business opportunity for Tessolve.

Q. Given the rapid technological changes and market volatility in the semiconductor industry, what financial risk management strategies are you deploying?

Raghavendra: The semiconductor industry is indeed volatile, as highlighted by recent disruptions like the COVID-19 pandemic. From a technological change risk mitigation perspective, Tessolve’s model has evolved to be quite flexible & dynamic. Operating from India provides a currency advantage, our second tier presence, accelerating focus on campus engagement and building up fresh talent helps us in addressing skill gap that industry has today as well as enabling Tessolve to remain competitive while creating and increasing the value chain. Moreover, our comprehensive service offerings across the semiconductor cycle—from pre-silicon to post-silicon—ensure resilience even during downturns. Collaborations with hyperscalers during industry downturns over the past two years have also proven beneficial.

Q. Research and development are critical to your innovation strategy, especially in semiconductor testing and development. How do you balance its substantial R&D expenditure with maintaining strong financial performance?

Raghavendra: Strategic R&D investment is crucial for our innovation strategy, particularly in semiconductor testing and development. We time our investments judiciously, focusing on enhancing our service offerings and aligning with technological advancements such as AI. This approach not only supports our financial performance but also keeps us at the forefront of industry trends. Our Centers of Excellence (COEs) continuously monitor customer and technological landscapes to ensure our solutions remain adaptive and relevant and adopting AI to the best possible manner.

Q. What are your expectations from the upcoming budget and its impact on the semiconductor industry?

Raghavendra: We anticipate a business-friendly environment that enhances ease of doing business, crucial for industry growth. Specifically, we look forward to increased CapEx allocations and development programs supporting the semiconductor sector in India. These initiatives are pivotal for sustaining rapid and consistent growth in our industry.

Q. What are your priorities for the current financial year?

Raghavendra: Last fiscal year marked significant milestones for us, including crossing ₹1000 crore in revenue and celebrating our 20th anniversary. Looking ahead, our priority is to capitalize on emerging opportunities both organically and inorganically and enhance value for our stakeholders. We aim to sustain our growth trajectory, leveraging market dynamics and our unique end-to-end service portfolio in the semiconductor sector. Our focus remains on succeeding alongside our customers, partners, vendors, and employees, creating value and demonstrating our commitment daily. With India poised to become a semiconductor hub and the industry set for an upturn, we see significant growth opportunities for the next six to seven years.