Bengaluru-Based Chip Firm C2i Semiconductors Acquired By Infineon

Infineon Technologies has agreed to acquire Bengaluru-based chip design startup C2i Semiconductors, which builds software-defined power management systems for AI data centres, with the deal expected to close in the third quarter of calendar year 2026. Financial terms were not disclosed. C2i, founded in June 2024 by six former Texas Instruments engineers, raised $4 million from Yali Capital in November 2024 and a $15 million Series A led by Peak XV Partners in February 2026, and its technology aims to recover 8 to 10 percent efficiency in AI server power delivery.

German semiconductor giant Infineon Technologies has agreed to acquire C2i Semiconductors, a Bengaluru-based chip design startup that builds power management systems for AI data centres. The deal, announced on August 24, was confirmed by both companies, with Infineon saying the transaction is expected to close in the third quarter of calendar year 2026. Financial terms of the acquisition have not been disclosed. C2i’s technology sits in the power delivery chain of AI infrastructure, an area that has taken on outsized importance as AI processors pull more electricity and generate more heat than any generation of chips before them. The startup builds what it calls “software-defined” multiphase controllers and smart power stages, essentially systems that combine power semiconductors with digital control and software to manage how electricity moves from the grid down to the processor core, adjusting in real time as compute loads spike or fall. Infineon says the acquisition will let it build out intelligent, scalable power architectures for AI servers and high-performance computing platforms, and will also expand its engineering footprint in India, where it already employs around 2,800 people. Adam White, President of Infineon’s Power Systems division, described the move as one that would create a new center of excellence for digital power technologies in the country. Ram Anant, C2i’s co-founder and CEO, framed the deal as access to scale that the startup could not have built on its own. In a statement, he said joining Infineon gives the company world-class semiconductor manufacturing capabilities and global customer relationships that will help take its software-defined power architectures to customers worldwide. What C2i Was Building C2i Semiconductors was founded in June 2024 by six co-founders, all of whom came out of Texas Instruments: Ram Anant, Vikram Gakhar, Preetam Tadeparthy, Dattatreya Suryanarayana, Harsha S B, and Muthusubramanian N V. Tadeparthy served as the company’s CTO. The name C2i stands for control, conversion and intelligence, which roughly describes what the company set out to do: rethink power delivery not as a series of individual components to be optimised in isolation, but as a single system spanning the path from the grid to the processor. The pitch to investors was straightforward. As AI chips get more powerful, the electricity https://officechai.com/ai/ai-could-end-up-using-99-of-the-worlds-electricity-former-google-ceo-eric-schmidt/ they draw becomes more erratic, spiking and dropping in ways older power delivery architectures were never designed to handle. C2i’s bet was that intelligent, software-controlled power systems could recover meaningful efficiency in this process, and the company claimed its architecture could recover 8 to 10 percent in efficiency terms and extend server lifespans in the process. At data centre scale, gains like that translate into real money. The entire chip, from architecture through design and verification, was built out of Bengaluru. The company’s first product was scheduled for tape-out in April 2026, with a second design to follow later in the year, manufactured at Tower Semiconductor in Israel and GlobalFoundries facilities in Singapore or Dallas. Funding And Backers C2i raised its first outside capital in November 2024, a $4 million round from Yali Capital that also included a personal investment from Lip-Bu Tan, the Intel CEO who has a long track record of backing semiconductor startups through his Walden International and Yali Capital vehicles. That early validation from a recognised chip industry figure appears to have helped the company’s subsequent fundraising. In February 2026, C2i closed a $15 million Series A round led by Peak XV Partners, with participation from Yali Deeptech and TDK Ventures. Rajan Anandan, Managing Director at Peak XV, said at the time that power had become a major bottleneck in scaling AI and that C2i’s team had the hardware and systems expertise to address it. The round was later extended, taking the total raised in that tranche to $16.7 million. Including the earlier Yali Capital investment, C2i’s total funding stood at close to $35.7 million by the time the Infineon deal was announced, according to data from Tracxn. Peak XV posted a note celebrating the acquisition on LinkedIn, calling it proof that world-class IP can be built in India and pointing to the fact that the chip’s entire design and verification process happened out of Bengaluru rather than being outsourced services work for a foreign parent. Lip-Bu Tan also posted congratulating the founding team, calling it a fantastic outcome for Yali Capital and his own investment vehicle, A&E Investment. The Subsidy Question The acquisition has also triggered some pushback online, with a section of commentators arguing that C2i represents a poor outcome for India’s semiconductor ambitions: a company that received government support was sold to a foreign buyer within roughly two years of being founded. The government support in question is India’s Design Linked Incentive scheme, run by MeitY through C-DAC, which is meant to nurture domestic fabless semiconductor design companies. Anant himself acknowledged this support when the Series A round closed, thanking MeitY for its partnership through the DLI scheme and noting that access to advanced EDA tools and financial assistance had helped C2i move from an early silicon concept to something it could take to market. Whether this amounts to Indian taxpayers subsidising a company that then handed its IP to a German conglomerate is worth examining on the actual numbers rather than the framing alone. The DLI scheme’s Product Design Linked Incentive component reimburses up to 50 percent of eligible design expenditure, capped at ₹15 crore, or roughly $1.6 to 1.8 million, per approved project. Design infrastructure support, covering things like EDA tool access and multi-project wafer fabrication, is capped even lower, at around ₹3 crore per applicant. Against C2i’s total private funding of roughly $35.7 million, whatever the company drew from the DLI scheme would represent a small fraction of its capital stack, not the primary source of money that built the company. There is a separate, more technical wrinkle worth flagging. The DLI scheme requires companies claiming its incentives to retain domestic status, meaning majority ownership by resident Indian citizens or Indian entities, for three years after the incentive is disbursed. C2i was founded in mid-2024 and the Infineon deal was announced roughly two years later, which would put the acquisition within that retention window if the company had already drawn down incentives under the scheme by then. Neither MeitY nor C2i has publicly detailed the exact status of the company’s DLI claims at the time of the deal, so it isn’t possible to say with certainty whether this technically triggers any clawback or compliance issue. It is a legitimate question for the scheme’s administrators to clarify, separate from the broader argument about whether the deal is good or bad for India. On the substance of the “bad for India” argument, the picture is less one-sided than the online chatter suggests. Infineon has said the acquisition will expand, not shrink, its engineering presence in India, and has described plans to build a center of excellence for digital power technologies in the country on top of the roughly 2,800 people it already employs here. The engineers who designed, verified and taped out C2i’s chips remain in Bengaluru, working on the same problem, now with the backing of a company that can manufacture and sell the resulting products at a scale C2i could not have reached on its own. The IP itself changes hands, and the equity returns flow to a mix of Indian and foreign venture investors rather than to the Indian state, but the underlying claim that India can produce IP-owning, deep-tech hardware companies rather than merely staffing outsourced design services for others is, if anything, reinforced by a European industrial giant choosing to acquire a two-year-old Bengaluru startup for its technology. The more durable question is not whether this particular deal was good or bad, but what India’s semiconductor policy is actually optimising for. If the goal of schemes like DLI is to seed a domestic base of globally competitive chip design capability, an acquisition that validates that capability and keeps the engineering work in the country arguably counts as a win, even if the ownership eventually sits abroad. If the goal is to build enduring, India-headquartered semiconductor companies that scale independently, then an exit this early falls short of that ambition, regardless of who ends up buying it. India’s chip design ecosystem is still young enough that both readings will keep surfacing every time a well-funded startup gets acquired, and C2i is unlikely to be the last case study in that debate.