Govt says India’s semiconductor market to cross $100 billion by 2030

New Delhi: India’s semiconductor market, which includes a robust chip design and engineering sector, is tipped to cross $100 billion in valuation by 2030, Union minister of state for information technology Jitin Prasada said in Parliament on Wednesday.

Initiatives that will help the domestic semiconductor market reach the milestone included production-linked incentive (PLI) schemes for setting up chip fabs (fabrication plants), display fabs, chip testing and packaging plants, a design-linked incentive (DLI) scheme to further boost local chip design, and finally, promotion of local component manufacturing and domestic manufacturing of “large scale electronics," he added.

Further, efforts to modernize the Centre-owned Semi-Conductor Laboratory in Mohali are also underway—which could further add to this milestone.

Prasada stated that from a market value of $38 billion in calendar year 2023, the semiconductor market will grow to $109 billion by 2030—suggesting a 16% compounded annual growth rate of the industry. Key to these plans will be the upcoming semiconductor fab, being set up by Tata Electronics in partnership with Taiwan’s Powerchip Semiconductor Manufacturing Corporation (PSMC) in Dholera, Gujarat—which the Centre has projected will be ready for operations by 2027, and will produce 3 billion chips annually following a net investment quantum of $10.9 billion, including Centre- and state-backed incentives.

Also read | Dholera chip fab: India's leap into electronics manufacturing

The chip fab is expected to produce chips ranging across 28nm, 50nm, 55nm and 90nm die sizes—all of which are expected to become applicable in industrial use cases such as railways, electric vehicles, white goods and more.

Further adding value are assembly, testing, marking and packaging (ATMP) and outsourced semiconductor assembly and test (OSAT) facilities. US-based Micron announced an ATMP facility with a net investment of $2.75 billion in 2022, hence becoming the first benefactor of the Centre’s PLI push.

India's growing semiconductor hub

Alongside this, India already has a robust chip design industry as well. On Tuesday, fabless US chipmaker Qualcomm announced a new mobile processing platform designed for budget-range smartphones in the country. Speaking about it, Chris Patrick, senior vice-president and general manager for handsets at Qualcomm, told Mint that most of the company’s networking modems, as well as a sizeable section of all of its chips, are designed by engineers in India.

“With 15,000 engineers already, India is most likely either the largest engineering design base for Qualcomm, or just behind our San Diego headquarters. We go where there is talent, and India is right up there in the semiconductor ecosystem,” Patrick said.

Also read | Qualcomm's new chip to push 5G phone prices to below ₹8,000: India president

Chip design, therefore, will also be a key contributor to the $100 billion industry valuation that Prasada projected for semiconductors in India. Industry estimates peg India to account for nearly one-fifth of all chip design operations owing to the availability of domestic engineering talent—a factor that has spurred many leading companies to ramp up operations here.

In July last year, fellow fabless US chipmaker Advanced Micro Devices (AMD) announced a $400-million outlay to expand its chip research and development (R&D) operations in India—making the country its biggest hub of semiconductor engineering globally.

Going forward, the Centre is expected to further introduce a components incentive scheme that will boost domestic value addition further. A senior government official with direct knowledge of the matter said that the scheme is currently in the works, and will involve semiconductor components as a key part of improving India's value chain in the global manufacturing ecosystem.

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