India’s great breakthrough in semiconductor industry

Semiconductor industry is set to trigger a great revolution in India’s journey towards Viksit Bharat, bolstering India’s manufacturing and strengthening India’s self-reliance.

The semiconductor industry in India has become an integral part of almost all the sectors of Indian industry, playing a significant role across the growth segments. Semiconductor is a crucial industry which fortifies the functionality of all electronic devices, shaping the efficiency and activity of our daily lives.

India’s steady strides to emerge as a prominent hub for semiconductor design, is now witnessing the creation of nearly 2,000 chips annually. More than 20,000 engineers contribute to various facets of chip design and verifications. India’s technical expertise in research and development (R&D) and design is paving the way for futuristic growth of the industry. India’s abundant talent pool of IT design and R&D engineers enables semiconductors industry to excel in innovation, design, and technological advancement.

Now India is moving ahead to become a semiconductor manufacturing hub. The semiconductor industry is poised to generate 1 million jobs across varied sector in the coming few in chip semiconductor fabrication, ATMP (Assembly, Testing, Marking, and Packaging), chip design, software development, system circuits, and manufacturing supply chain management.

Going ahead, there will be a great demand for a skilled workforce, including engineers, operators, technicians, and specialists in quality control, procurement, and materials engineering, emphasizing India’s strategy to build a robust semiconductor talent pipeline in the next few years.

The growing young population in India is keenly contributing to the growth of semiconductor industry. The students are facilitated with real hands-on training through internships to ensure a steady flow of skilled local talent into India’s nascent semiconductor industry.

These internships provide invaluable practical experience, enhancing students’ skills and ultimately strengthening India’s semiconductor talent pool and self-reliance. The investments in India’s skilling and re-skilling efforts are expected to go up significantly in the coming years.

India’s thrust to become a Viksit Bharat with enhanced growth trajectory and size of its GDP is eradicating the supply chain bottlenecks by promoting indigenous semiconductor production. Semiconductor industry now not only generate jobs but also fuels innovative eco system in the country. Reports indicate that for every single job created in the semiconductor space, approximately 2.5 more jobs are generated in related areas.

This offers great job opportunities for growing young people in the country. A strong semiconductor ecosystem will boost research and development activity in the country and increase India’s competitiveness in the global markets.

The semiconductor industry in India so far:

Source: compiled from various sources  

The Government of India has rolled out various schemes and initiatives to encourage companies to set up chip manufacturing facilities in India. The Indian government has recognised the strategic importance of establishing a robust semiconductor ecosystem and has taken proactive steps to foster its growth in the country. The objectives of these initiative are to attract investments, promote domestic manufacturing, and develop a skilled workforce, propelling India towards becoming a global semiconductor hub and enhanced manufacturing share in GDP along with creation of tremendous employment opportunities for growing youth.  

To enhance the production possibility frontiers, India provides Production Linked Incentive Scheme for domestic manufacturing of certain electronic components. This includes semiconductors also through financial incentives linked to the production threshold. Firms can use these incentives to scale up their production and investments. Many domestic and foreign companies have shown interest to take advantage of these incentives for setting up semiconductor manufacturing facilities in India.

The Government of India provides a great handholding to the semiconductor industry for its consistent growth trajectory. Strategic partnerships, and a robust domestic market support the sustainable development of semiconductor industry in India. These developments has the potential to place India on the independent semiconductor manufacturing trajectory, reduce its dependency on imports, and improve its standing in the global electronics industry.

Going ahead, India’s semiconductors market is expected to cross USD 100 billion by 2032 from US$ 34 billion in 2023 (IBEF India). The government has put such programs as the Semiconductor Mission, PLI program, and Special Economic Zones in place to encourage investments in semiconductor industry, build manufacturing capacity, and an enablingecosystem for the growth of semiconductor industry.

The anticipated growth in the semiconductor market will be at around 20% annually, thereby touching above the mark of USD 100 billion by the 2032. The Government of India has allocated USD10 billion towards its Semiconductor Mission to drive investments and propel India towards becoming a leading player in chip manufacturing. The industry finds itself at a great moment of overflowing with opportunities, driven by government initiatives, strategic partnerships, and a growing domestic market.

The tripartite stakeholders including Government, Industry and Academia have started building partnerships. The government is providing handholding with conducive policy environment, industry is creating demand and academic institutions are aligning their curriculums with the needs of the industry. Therefore, the government, industry, and academia have come together on one platform and act in a much more determined manner to help India meet such growing semiconductor requirements.

In conclusions, the semiconductor services landscape in India is now evolving rapidly, presenting a wealth of opportunities for large enterprises, MSMEs and startups across diverse segments. Semiconductormarket in India is projected to grow and reach USD 100 billion by 2032 driven by the rise in consumer electronics, automotive applications, and government initiatives to attain self-reliance in semiconductor manufacturing. The opportunities arise in new growth vectors like artificial intelligence, 5G, Internet of Things, and emerging fields such as quantum computing. The supportive policy environment is addressing the infrastructure needs and has created opportunities for both local and foreign players to gain from investments in the semiconductor industry in India.