The Indian semiconductor market is poised to exceed $100 billion in revenues by 2030, with government initiatives such as the production-linked incentive (PLI) scheme underlining its potential to cater to robust demand for building digital infrastructure across industries, a report said on Wednesday.
Mobile handset, IT and telecom companies account for more than 75 percent of revenues in the semiconductor industry, which perhaps explains why a recent report by IESA and Counterpoint Research is titled 'Localising and Globalizing India's Semiconductor Hubs.'
The 'Semicon India' programme initiated by the government aims to expedite semiconductor manufacturing and workforce development, driving innovations and growth opportunities in India's tech ecosystem.
"India has created one of the largest smart populations in the world, powered by semiconductors operating in the background. Semiconductors have a profound commercial, strategic, and social impact," said Ved Prakash Mall, Director, IESA.
Semiconductors can be used in numerous sectors including electronics manufacturing, digital transformation, defense and aerospace, renewable energy, IoT, healthcare, automotive, and research.
India semiconductor market is expected to reach US $45 billion in 2023 and likely to grow fast with a CAGR of 13 per cent and will grow more than US $100 billion by the year 2030.
As mentioned by Tarun Pathak, Research Director at Counterpoint Research, "The handset sector makes the most crucial contribution to India's semiconductor economy and plays a significant role in India's search for digital transformation as more Indians join the smartphone bandwagon and migrate from feature phones".
According to him, growth is driven by social media, OTT platforms, affordable prices, accessible data, and expansion of the 5G network. Apart from this, he said India's IT sector is doing well, supplemented by pandemic-driven digitalization and government initiatives like 'Digital India' and 'Make in India'.
The Union Minister for Electronics and IT, Ashwini Vaishnaw, recently said India was moving towards becoming the next semiconductor hub for the world since big investment is happening in this sector in the country.
In a very short time, more than Rs 1.52 lakh crore, nearly $18 billion worth of investments, have come into India's semiconductor manufacturing space, and several projects already are lined up.
However, according to the counterpoint research VP Neil Shah, the growth will be more centered around the telecom sector given all the rollouts that are taking place with respect to 5G as well as fibre networks.
"Projects such as BharatNet and solutions like FWA are playing a pivotal role, especially in regions where fibre deployment is proving challenging. The semiconductor demand in India will be driven by a need for high speed connectivity," Shah said.
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