India’s Semiconductor Industry on the Rise: Advancing Towards Technological Independence

22. February 2024
India's semiconductor industry: Advancing towards technological independence and global significance through local initiatives and international collaborations.

India’s ascent in the semiconductor market signifies a significant stride towards technological autonomy and global influence. Through local initiatives, comprehensive investments, and enhanced international collaboration, the country is positioning itself as an important player in the global semiconductor ecosystem. In this article, we shed light on the dynamics propelling this transformation, the challenges facing India, and the potentials emerging from it.

Growing Importance in the Global Semiconductor Market

The Indian government’s initiative to strengthen the semiconductor ecosystem aims to reduce dependency on imports and foster a self-sustaining industry. Currently, the demand for semiconductors in India is estimated at $24 billion, with forecasts predicting a surge to $110 billion by 2030. This growth is attributed to the increasing need for electronics driven by the digital transformation across various sectors, from automotive to information technology.

India’s Strategic Advantages

According to BBC reports, India accounts for 5% of the global semiconductor demand. India’s strength lies particularly in semiconductor design, supported by an extensive talent pool comprising 20% of the world’s chip design talents. Major semiconductor manufacturers such as Intel, AMD, and Qualcomm have established their research and development centers in India, leveraging local engineering talents, thus underscoring the country’s strategic importance in the global semiconductor industry.

Challenges and Solutions

in terms of manufacturing capabilities. The government has recognized this and is promoting engineer training and industry-academia collaboration, such as the “Chips to Startup” program, which has already trained 85,000 engineers.

Indian startups could play a significant role in the global semiconductor industry, according to Sateesh Andra of Endiya Partners. Key factors include focusing on niche markets, government support, and rising domestic demand. However, challenges such as funding constraints, talent acquisition, and competition from established giants like Nvidia, AMD, and Intel lie ahead. Nevertheless, the outlook remains promising.

Furthermore, India is working to attract international investments to bolster domestic manufacturing. An example of this is Micron Technology’s planned Assembly, Test, Mark, and Pack (ATMP) facility in Gujarat, with a total investment of $2.75 billion, set to produce the first “Made in India” chip by the end of 2024, as announced by IT Minister Ashwini Vaishnaw.

International Collaborations

Semiconductors drive both the green and digital transformations. […] By signing this agreement with India – a trusted and dynamic partner whose strengths complement ours – we will advance innovation in this important sector.rn
Věra Jourová
Vice President for Values and Transparency

International collaboration plays a crucial role in strengthening the Indian semiconductor ecosystem. The agreement between the European Union and India on semiconductor collaboration is an example of such partnerships aiming to build robust semiconductor supply chains and promote innovation. These partnerships are essential to address global supply chain challenges and enhance competitiveness against established powers such as the USA, China, Japan, and Taiwan.

India also benefits from its geopolitical position, as the USA increasingly seeks alternative locations to outsource parts of its semiconductor supply chain, moving away from heavy dependence on China, according to the BBC.

The Future of the Indian Semiconductor Market

With targeted investments, talent promotion, and strengthened international partnerships, India is well-positioned to consolidate and expand its position in the global semiconductor market. Deloitte forecasts that the semiconductor market in India is expected to reach $55 billion in revenue by 2026. This development points to a transformative phase where India gains importance not only as a market but also as a production hub.

India’s pursuit of a leading role in the global semiconductor market is an ambitious endeavor requiring strategic vision, substantial investments, and international collaborations. The government and the industry have taken significant steps to create a conducive environment for the semiconductor industry. With the support of international partnerships, talent promotion, and the establishment of state-of-the-art manufacturing facilities, India stands at the threshold of becoming an important player in the global semiconductor landscape.