According to recent research, the ‘Make in India’ and production-linked incentive (PLI) programmes will encourage local sourcing of semiconductor components in the ensuing years, bringing India’s semiconductor component market’s total revenues up to $300 billion by 2026.
Currently, the IT, industrial, mobile and wearables categories together account for around 80% of the country’s semiconductor revenues in 2021.
According to the analysis by the India Electronics & Semiconductor Association (IESA) and Counterpoint Research, future regulatory changes and the development of a semiconductor ecosystem will lessen dependency on imports.
“Before the end of this decade, there will be nothing that will not be touched by electronics and the ubiquitous ‘chip’. Be it fighting carbon emissions, renewable energy, food safety, or healthcare, the semiconductor chip will be all-pervasive,” said Krishna Moorthy, CEO and President, of IESA.
Under its PLI programme, the Indian government recently proposed a separate expenditure of Rs 76,000 crore (about $10 billion) towards the growth of an electronics ecosystem for semiconductor and display manufacturing.
Maharashtra has won a staggering Rs 2.06 lakh crore investment from Vedanta Group-Foxconn cooperation in the rising semiconductor chips and display fabrications sector in Pune, besting at least five other states in the process.
“The gradual shift from feature phones to smartphones has been generating increased proportions of advanced logic processors, memory, integrated controllers, sensors and other components. This will continue to drive the value of the semiconductor content in smartphones, aided by the rise of wearables such as smartwatches and TWS,” explained Tarun Pathak, Research Director at Counterpoint Research.
“However, the telecom sector with the advent of 5G and fibre network rollout will be a key catalyst in boosting the semiconductor components consumption,” Shah said.
Neil Shah, vice president at Counterpoint, predicts that various industries will contribute to the upcoming significant rise in semiconductor components. In addition to the high-tech, semiconductor-intensive 5G and FTTH network infrastructure equipment, which will account for more than 14% of all semiconductor consumption in 2026, “but also from the highly capable AI-driven 5G endpoints, from smartphones, tablets, PCs, connected cars, industrial robotics to private networks,” he mentioned, will also contribute to this consumption.
India’s end equipment market had revenues of $119 billion in 2021. From 2021 to 2026, a CAGR of 19% is anticipated for growth. According to the report, from component, sourcing to design manufacture, India’s electronic system design and manufacturing (ESDM) industry would significantly impact the overall growth of the nation.