India Semiconductor Market 2029: Forecast, Key Drivers, and Market Dynamics

Industry Key Highlights:

According to the TechSci Research report, “India Semiconductor Market – By Region, Competition Forecast & Opportunities, 2019-2029.”  India Semiconductor Market was valued at USD 34.4 billion in 2023 and is anticipated to project robust growth in the forecast period with a CAGR of 19.01%.

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As one of the largest economies in the world, India is becoming a significant player in the semiconductor industry due to rising consumer demand for electronic products, increasing adoption of artificial intelligence (AI), and the government’s proactive initiatives to support the sector. The country’s semiconductor market was valued at USD 34.4 billion in 2023, and its expansion is driven by a variety of factors, including the digital transformation of both private and public sectors, the rapid growth of electric vehicles (EVs), and a strong governmental push to enhance domestic semiconductor production.

Semiconductors, the heart of modern electronics, are found in nearly every electronic device and are pivotal in critical and emerging technologies. India, with a population exceeding 1.4 billion, is a significant consumer of electronic goods, spending approximately USD 180 billion annually on electronics. As such, India is a prime market for semiconductor technologies, which support applications in communications, automotive, data processing, and consumer electronics.

The government is focused on driving a self-reliant semiconductor ecosystem through initiatives like the Production Linked Incentive (PLI) scheme, which encourages local manufacturing. The establishment of domestic semiconductor fabrication plants, backed by foreign investment, along with an expanding semiconductor design industry, has helped position India as a key player in the global semiconductor supply chain.

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Market Drivers and Emerging Trends

1. Digital Transformation in India
   India’s digital transformation is accelerating, with more consumers, businesses, and government institutions embracing digitization. The rise of e-commerce, online education, fintech, and digital banking requires advanced semiconductors. Additionally, initiatives like Digital India and Smart Cities are accelerating the need for semiconductors in networking, automation, and IoT devices.

2. Growth of Electric Vehicles (EVs)
   The EV sector is one of the biggest growth drivers for semiconductors in India. As the Indian government aggressively promotes electric mobility through subsidies, incentives, and the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme, the demand for automotive semiconductors is rising. EVs rely heavily on power electronics, battery management systems, and advanced infotainment systems, all of which are semiconductor-driven.

3. Rise of Artificial Intelligence (AI) and Machine Learning (ML)
   AI and ML technologies are increasingly being integrated into various industries in India, from healthcare to finance to agriculture. These technologies demand high-performance computing, which in turn requires sophisticated semiconductors such as processors and memory devices. As AI adoption grows, semiconductor demand will increase, making this a critical sector to watch.

4. Government Initiatives to Boost Domestic Manufacturing
   The Indian government has launched several initiatives to reduce dependence on imports and establish a self-sufficient semiconductor manufacturing ecosystem. The PLI scheme is a significant step in this direction, encouraging domestic production of semiconductor components. Moreover, the creation of India’s first chip-making plant by IBM and STMicroelectronics, with a substantial investment of USD 7.91 billion, is expected to play a crucial role in enhancing the country’s semiconductor capabilities.

5. Technological Advancements in Automotive Electronics
   The automotive sector, particularly the rise of autonomous vehicles, connected cars, and electric vehicles, has become one of the dominant application segments for semiconductors. With the increasing integration of advanced driver assistance systems (ADAS), infotainment systems, and battery management, the demand for automotive semiconductors is set to surge.

6. Growing Demand for Consumer Electronics
   India’s expanding middle class and growing disposable income have fueled the demand for consumer electronics, such as smartphones, televisions, wearables, and home appliances. All of these devices require semiconductors for their functionality, ensuring the sector’s consistent growth.

Key Segments in the India Semiconductor Market

The India semiconductor market is segmented by components, applications, and regions:

1. By Component

   • Memory Devices: Used in storage devices, smartphones, and computers.

   • Microprocessors: Vital for computing devices such as laptops, desktops, and servers.

   • Analog ICs: Used for controlling power and voltage in various electronic devices.

   • Sensors: Key for automotive, industrial, and consumer electronics applications.

   • Discrete Power Devices: Important for efficient power management in various devices.

2. By Application

   • IT & Telecom: Telecommunications infrastructure and IT hardware require semiconductors for connectivity and data processing.

   • Automotive: Growth in electric and connected vehicles is driving demand for automotive semiconductors.

   • Consumer Electronics: Smartphones, tablets, and wearables are major consumers of semiconductor technologies.

   • Other Industries: Includes industrial, healthcare, and agricultural applications.

3. By Type

   • Extrinsic Semiconductors: Often used for electronic devices requiring specific electrical properties.

   • Intrinsic Semiconductors: Found in devices that do not require heavy external doping to function.

4. By Region

   • North India

   • South India

   • West India

   • East India

Competitive Landscape

The India Semiconductor Market is highly competitive, with numerous international and local players involved in semiconductor manufacturing, design, and distribution. Key players include:

• Broadcom Inc.

• CHIPLOGIC TECHNOLOGIES

• Tata Elxsi Limited

• Continental Device India Pvt. Ltd. (CDIL)

• MosChip Technologies Limited

• NXP B.V.

• ASM Technologies Limited

• Masamb Electronics Systems Private Limited

• Semi-Conductor Laboratory

• ROHM Co., Ltd.

These players are investing in research and development to develop advanced semiconductor solutions that cater to the growing demand from automotive, consumer electronics, and other industries. Furthermore, strategic partnerships and collaborations between global semiconductor companies and local Indian firms are helping improve the domestic semiconductor ecosystem.

Future Outlook

The future outlook for India’s semiconductor market remains exceptionally promising. With an ever-expanding demand for consumer electronics, AI, automotive technologies, and industrial automation, India is poised to become one of the largest semiconductor markets globally. The Indian government’s emphasis on fostering domestic semiconductor production and reducing reliance on imports, through initiatives like the PLI scheme and the establishment of manufacturing hubs, will further bolster this growth.

Moreover, the increasing need for electric vehicles and the government’s push towards sustainable mobility will continue to be major drivers of semiconductor demand in the automotive sector. As global semiconductor companies collaborate with Indian manufacturers, the market is expected to witness an influx of advanced technologies that will drive both industry innovation and economic growth.

The next few years will also see the rise of new semiconductor applications, such as 5G connectivity, IoT, and edge computing, which will further fuel demand. India’s growing emphasis on smart cities, digital governance, and public sector digitalization will also create new avenues for semiconductor applications.

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10 Benefits of the Research Report

1. Comprehensive Market Analysis: Understand the current state and future potential of the India Semiconductor Market.

2. In-depth Segmentation: Get detailed insights into key market segments, including components, applications, and regions.

3. Competitive Landscape: Learn about key players in the market, including their strategies, strengths, and weaknesses.

4. Emerging Trends: Identify the latest trends and innovations driving growth in the semiconductor industry.

5. Market Drivers: Understand the factors propelling market expansion, such as government initiatives, AI, and EV adoption.

6. Growth Forecasts: Access detailed market forecasts to inform investment and strategic decisions.

7. Investment Opportunities: Discover key investment opportunities in the semiconductor industry.

8. Technological Advancements: Stay updated on the latest technological advancements and breakthroughs in semiconductor manufacturing.

9. Regional Insights: Get a deeper understanding of regional dynamics and their impact on the semiconductor market in India.

10. Policy Implications: Learn about the role of government policies in shaping the semiconductor industry’s growth.

Conclusion

The India Semiconductor Market is set to experience significant growth due to the country’s increasing demand for electronic devices, advancements in automotive technologies, and the rapid expansion of AI and IoT applications. With a supportive government framework, investments in domestic manufacturing, and collaborations between global and local players, India is well-positioned to strengthen its position in the global semiconductor value chain. The market’s expansion is expected to be driven by technological innovations, industry-specific growth drivers, and the country’s digital transformation.

As the market continues to evolve, stakeholders and investors must keep an eye on emerging trends and policy developments that will influence the trajectory of India’s semiconductor industry.

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