India’s Semiconductor Market Projected to Surpass $100 Billion by 2030

  • 17 Oct 2024

Tags:

In News:

India's semiconductor market is poised to exceed $100 billion by 2030, according to a report from the India Electronics and Semiconductor Association and Counterpoint Research. Currently valued at $45 billion in 2023, the market is projected to grow at an annual rate of 13%, driven by demand in mobile handsets and IT sectors, which together account for over 75% of revenues.

Key Highlights:

  • Growth Drivers: The growth is supported by strong demand for electronics and government initiatives like the production-linked incentive scheme. Semiconductors are essential for various industries, including electronics, defense, healthcare, and automotive.
  • Importance of Semiconductors: These materials, which include silicon and germanium, are crucial for electronic devices. They can conduct electricity under certain conditions, making them fundamental in transistors, integrated circuits, and devices like LEDs and solar cells.
  • Global Context: The global semiconductor supply chain has shown vulnerabilities, particularly during the chip shortage of 2021. Major producers include Taiwan (44% market share), China (28%), South Korea (12%), the U.S. (6%), and Japan (2%). Countries are now focusing on building domestic chip industries to reduce dependency on a few key suppliers.

Factors Favoring India's Growth in Semiconductors:

  1. Skilled Workforce: India has a vast pool of STEM graduates, providing a skilled workforce for semiconductor manufacturing and design.
  2. Cost Advantage: Lower labor costs and efficient supply chains position India favorably for semiconductor manufacturing.
  3. Supply Chain Diversification: India is becoming a hub for back-end assembly and testing operations, with potential for front-end manufacturing.
  4. Government Support: Initiatives like Semicon India and the India Semiconductor Mission aim to create a robust semiconductor ecosystem, offering substantial fiscal incentives for companies.

Government Initiatives:

  • Semiconductor Fab Scheme: Provides 50% project cost support for semiconductor manufacturing.
  • Display Fab Scheme: Offers similar support for display manufacturing.
  • Chips to Startup (C2S) Programme: Trains 85,000 engineers across academic and R&D institutions.
  • Recent approvals for the establishment of semiconductor plants in Gujarat and Assam further bolster this initiative.