The Semiconductor Boom and Its Impact on the Future of the Semiconductor Industry in India

• March 20, 2025
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• Semiconductor, Uncategorized
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India stands on the brink of a semiconductor revolution, poised to launch its first indigenous semiconductor in 2025. Traditionally recognized as a hub for semiconductor research and development, India has, for decades, lagged in manufacturing capabilities. However, recent global developments necessitate a significant shift towards domestic semiconductor fabrication to meet the escalating demand for electronic products. 

Semiconductors play a pivotal role in an increasingly uncertain world. The India Electronics and Semiconductor Association (IESA) projects the market to grow from $52 billion in 2024 to $103.4 billion by 2030. Concurrently, India’s electronics market is experiencing robust growth, driven by rising disposable incomes, a burgeoning middle class, and government initiatives, with a projected demand of $240 billion by 2030. 

Significant investments and strategic initiatives are propelling the nation toward becoming a global semiconductor hub. This transformation is poised to reshape the semiconductor industry within India and position the country as a key player in the global market.

Analyzing the Surge in Semiconductor Demand Across India’s Key Market Segments

The burgeoning demand for semiconductors in India is primarily driven by the rapid expansion of the automotive and industrial sectors. NXP Semiconductors, a global leader in the semiconductor industry, anticipates that India could contribute 8-10% of its revenue by 2030, underscoring the country’s growing significance in these sectors.

“Our first ‘Made in India’ chip will be rolled out this year and now we are looking at the next phase, where we can get equipment manufacturers, material manufacturers and designers in India,” 

“For materials, from parts per million purity, we need to go to parts per billion purity levels. This requires huge transformative changes in the process and the industry is working to achieve this,”  Minister for Electronics and Information Technology, Ashwini Vaishnaw

Examining the Rapid Expansion of Electronics Production and Its Influence on Semiconductor Consumption in India

India’s electronics manufacturing landscape is undergoing a significant transformation. Since 2017, Apple has strategically shifted a portion of its iPhone production to India, with manufacturing units established in Karnataka and Tamil Nadu. This move is part of Apple’s broader “China Plus One” strategy, aiming to diversify its manufacturing base amid geopolitical tensions and tariffs between the US and China. Projections suggest that India’s share in Apple’s iPhone production could rise from 15% to 25% by 2027.

The Indian government’s Production-Linked Incentives (PLI) scheme has played a pivotal role in attracting such investments, offering substantial financial incentives to boost local manufacturing. As a result, mobile phones have emerged as India’s largest export product, reflecting the country’s growing prowess in electronics production.

Understanding India’s Position Within the Global Semiconductor Value Chain

India’s strategic initiatives and investments are elevating its position within the global semiconductor value chain. The government’s $10 billion incentive package aims to establish a robust semiconductor ecosystem, reducing reliance on traditional chipmaking hubs like China and Taiwan. This initiative is expected to propel India’s semiconductor market to a valuation of $63 billion by 2026.

Major industry players are recognizing India’s potential and are making significant investments to bolster the country’s semiconductor capabilities. For instance, Lam Research, a leading U.S.-based chip equipment manufacturer, has announced plans to invest over $1 billion in Karnataka to enhance the semiconductor ecosystem.

Similarly, NXP Semiconductors is committing more than $1 billion to expand its research and development efforts in India, signaling strong confidence in the country’s burgeoning semiconductor industry.

These developments underscore India’s emerging role as a critical player in the global semiconductor value chain, with the potential to influence global supply dynamics and drive innovation in the industry.

In conclusion, India’s semiconductor boom is a testament to the country’s strategic vision and commitment to becoming a global leader in the semiconductor industry. The surge in demand across key market segments, rapid expansion of electronics production and strengthening position within the global value chain are indicative of a promising future for India’s semiconductor sector.

Exploring India’s Emerging Significance in Semiconductor Assembly, Testing, and Packaging (ATP) Services

India is rapidly establishing itself as a pivotal player in the semiconductor Assembly, Testing and Packaging (ATP) sector, a critical segment in the semiconductor value chain. The inauguration of Tata Semiconductor Assembly and Test Pvt. Ltd. (TSAT) in Jagiroad, Assam, marks a significant milestone in this journey. Launched in August 2024, this facility represents a substantial investment of approximately ₹27,000 crore (around US$3.6 billion) and is poised to generate over 25,000 direct and indirect jobs in the region. This initiative not only bolsters the local economy but also advances India’s position in the global semiconductor industry.

The strategic collaboration between Tata Electronics and Tesla, formalized in April 2024, further underscores India’s growing prominence in the ATP domain. This partnership aims to supply semiconductor chips for Tesla’s global operations, signaling India’s readiness to meet international quality and supply standards.

Evaluating Government Initiatives and Schemes Supporting the Growth of India’s Semiconductor Industry

The Indian government has been proactive in fostering a conducive environment for Semiconductor Industry in India through a series of strategic initiatives:

India Semiconductor Mission (ISM): Launched with a substantial allocation of $10 billion, the ISM aims to establish a comprehensive semiconductor ecosystem encompassing design, fabrication and ATP units. This mission is pivotal in reducing dependency on imports and positioning India as a global semiconductor hub. The Indian government has allocated an additional $1.2 billion in 2024 to expand the India Semiconductor Mission (ISM). This includes funding for AI-powered semiconductor design startups and new R&D initiatives for advanced chipmaking technologies.

Production-Linked Incentive (PLI) Scheme: This scheme offers financial incentives to companies establishing semiconductor manufacturing facilities in India, thereby attracting both domestic and international investments.

Gujarat SemiConnect Conference: First held in 2024, this annual event serves as a platform for industry leaders, policymakers and researchers to discuss the future of the semiconductor industry in India, advancements and opportunities in the semiconductor sector. The 2025 edition witnessed the signing of eight Memorandums of Understanding (MoUs) worth over ₹1.5 lakh crore (approximately US$20 billion), reinforcing Gujarat’s role as a semiconductor manufacturing hub.

Strategies for Developing a Robust Domestic Ecosystem for Semiconductor Manufacturing in India

To cultivate a self-reliant semiconductor ecosystem, India is focusing on several strategic areas:

Infrastructure Development: Building state-of-the-art fabrication plants and Advanced Technology Processing (ATP) facilities equipped with cutting-edge machinery and innovative processes to meet global industry standards and ensure high-quality production capabilities.

Skill Development: Collaborating with academic institutions to nurture a skilled workforce adept in semiconductor technologies. For instance, Tata Electronics has partnered with IIT Gandhinagar to enhance skill development in the semiconductor sector.

Research and Development (R&D): Encouraging innovation through increased R&D investments is critical for driving technological advancements and economic growth. A prime example is NXP Semiconductors, which has committed over $1 billion to strengthen its R&D efforts in India.

Global Collaborations: Forming strategic alliances with international semiconductor companies to facilitate technology transfer and best practices. The partnership between Israel’s Tower Semiconductor and India’s Adani Group, involving a $10 billion semiconductor project in Maharashtra, is a testament to such collaborations.

These concerted efforts are steering India towards a self-sustaining and globally competitive semiconductor manufacturing ecosystem.

Current Trends and Future Outlook of Hiring Activities in India’s Semiconductor Sector

India’s semiconductor industry is experiencing a significant uptick in hiring activities, reflecting the sector’s rapid growth and the nation’s ambition to become a global semiconductor hub. The government’s strategic initiatives, such as the $10 billion incentive package under the Semicon India Programme, have attracted substantial investments from global semiconductor companies, leading to increased demand for skilled professionals.

For Instance, the Skill India Semiconductor Program (SISP) aims to train 100,000 engineers in chip design, fabrication and testing by 2025.

NXP Semiconductors, for instance, announced an investment exceeding $1 billion in September 2024 to bolster its research and development efforts in India. This investment is expected to create numerous job opportunities, particularly in R&D roles, as NXP aims to double its current workforce in the country.

Similarly, the establishment of Tata Semiconductor Assembly and Test Pvt. Ltd. (TSAT) in Assam is projected to generate over 25,000 direct and indirect jobs, further fueling the demand for skilled talent in the semiconductor sector.

To address the growing need for a skilled workforce, collaborations between industry and academia are being strengthened. For example, Tata Electronics has partnered with IIT Gandhinagar to enhance skill development in the semiconductor sector, ensuring a steady pipeline of qualified professionals to support the industry’s expansion.

Identifying and Addressing the Challenges Faced by the Semiconductor Industry in India

Despite the positive developments, India’s semiconductor industry faces several challenges that need to be addressed to sustain its growth trajectory:

Infrastructure Development: Establishing state-of-the-art fabrication plants demands substantial investments in infrastructure, such as advanced facilities, cutting-edge equipment and reliable access to essential resources like uninterrupted power and water supplies. However, many regions currently face challenges in providing these critical utilities at the scale and consistency required, making it difficult to support the high operational demands of such plants.

Skilled Workforce: There is a pressing need for a highly skilled workforce proficient in semiconductor technologies. While initiatives like the collaboration between Tata Electronics and IIT Gandhinagar are steps in the right direction, scaling such efforts is crucial to meet industry demands.

Dependencies:– Dependence on imports for raw materials and advanced equipment poses risks to the industry’s independence, including supply chain disruptions, fluctuating costs, and geopolitical tensions. Building a strong domestic supply chain through local production, innovation, and sustainable resource management is key. Enhancing self-reliance will protect the industry and support long-term economic resilience.

Research and Development: Insufficient investment in R&D hampers innovation. Increasing R&D funding is vital to keep pace with global technological advancements. Intel, Qualcomm, NVIDIA, and AMD are expanding their semiconductor R&D operations in India, with new facilities in Bangalore, Hyderabad, and Pune. These centers will focus on AI-driven chip design, advanced computing, and semiconductor innovation.

Highlighting Key Investments and Collaborations Shaping India’s Semiconductor Landscape

Several key investments and collaborations are shaping the future of India’s semiconductor industry:

NXP Semiconductors: In September 2024, NXP announced an investment of over $1 billion to enhance its R&D capabilities in India, underscoring the country’s growing importance in the global semiconductor landscape.

Gujarat SemiConnect Conference: The inaugural Gujarat SemiConnect Conference in March 2025 witnessed the signing of eight Memorandums of Understanding (MoUs) worth over ₹1.5 lakh crore (approximately $20 billion). These agreements aim to boost semiconductor manufacturing and innovation in Gujarat, positioning the state as a preferred destination for semiconductor companies.

Apple’s Manufacturing Shift: Since 2017, Apple has been strategically shifting a portion of its iPhone production to India, with manufacturing units established in Karnataka and Tamil Nadu. Projections suggest that India’s share in Apple’s iPhone production could rise from 15% to 25% by 2027, highlighting the country’s growing significance in the global electronics supply chain.

These investments and collaborations are not only enhancing India’s semiconductor manufacturing capabilities but also fostering innovation and job creation, thereby solidifying the country’s position in the global semiconductor industry.

Unveiling Emerging Opportunities in Compound Semiconductors Within the Indian Market

The Indian semiconductor market is witnessing a paradigm shift with the rise of compound semiconductors, which offer superior performance compared to traditional silicon-based chips. These semiconductors, composed of materials like gallium nitride (GaN) and silicon carbide (SiC), are gaining traction due to their efficiency in high-frequency, high-power applications.

Growing Demand for GaN and SiC in India

The global GaN semiconductor market is expected to reach $2.8 billion by 2026, growing at a CAGR of 24.4%, with India emerging as a significant contributor. ([Source: Market Research Future, 2024])

SiC-based chips are being increasingly used in electric vehicles (EVs), 5G infrastructure, and renewable energy systems—three sectors that India is prioritizing for technological growth.

Government Push and R&D Investments

The India Semiconductor Mission (ISM) has encouraged R&D in compound semiconductors, with institutions like IIT Madras and IISc Bangalore developing indigenous solutions.

The Centre for Development of Advanced Computing (C-DAC) is exploring GaN-based power electronics to boost India’s defense and aerospace sectors.

Industry Collaborations and Market Growth

Vedanta and Foxconn’s joint semiconductor venture is exploring compound semiconductors for power electronics.

Tata Electronics is reportedly considering investments in SiC wafer fabrication, positioning India as a global supplier of next-gen semiconductor materials.

The Make in India initiative has fueled demand for domestic semiconductor fabs specializing in GaN and SiC.

India’s push into compound semiconductors is expected to reshape EV manufacturing, telecom infrastructure, and military-grade electronics, positioning the country as a global leader in advanced semiconductor technologies.

Glomore’s Role in India’s Semiconductor Revolution

As India accelerates its push towards semiconductor self-reliance, Glomore Electro-Tech Solutions is at the forefront of supporting this transformation. With a deep-rooted presence in the electronics and semiconductor ecosystem, Glomore is actively enabling semiconductor growth through strategic component distribution, supply chain expertise and industry partnerships.

Forecasting the Future Trajectory of the Semiconductor Industry in India

India’s semiconductor industry is on a rapid growth trajectory, driven by strong government support, strategic global partnerships and rising domestic demand. Analysts forecast that the Indian semiconductor market will be valued at $64 billion by 2026, growing at a CAGR of 19%. ([Source: Deloitte India, 2024])

Key Growth Drivers for India’s Semiconductor Industry

Government Incentives: The $10 billion India Semiconductor Mission (ISM) aims to establish at least two cutting-edge semiconductor fabs by 2026.

Increasing Electronics Manufacturing: India’s electronics exports surged by 20% YoY in 2024, boosting semiconductor demand.

EV & 5G Boom: The EV market is expected to grow at a CAGR of 49%, and 5G rollout is set to cover 80% of urban areas by 2025, fueling semiconductor needs.

Challenges and Solutions for Future Growth

Skilled Talent Shortage: The industry will require over 500,000 semiconductor professionals by 2030; initiatives like Skill India Semiconductor Program aim to bridge this gap.

Infrastructure Bottlenecks: The government is investing in semiconductor parks with world-class logistics and uninterrupted power supply.

Supply Chain Dependencies: India is securing rare earth materials and advanced lithography machines to reduce reliance on imports from China and Taiwan.

What Lies Ahead?

By 2028, India could contribute 8-10% to global semiconductor production, up from the current less than 1%.

Companies like Intel, Qualcomm and TSMC are evaluating investments in India, signaling future collaborations.

AI-driven chip design and indigenous semiconductor startups will shape the next wave of India’s semiconductor revolution.

With the right policies, talent pool, and investments, India is on track to become a global semiconductor powerhouse by the end of the decade.

Final Thoughts: India’s Semiconductor Boom is Just Beginning

India’s semiconductor industry is at a turning point, poised for unprecedented growth. Here are the key takeaways from this deep dive into the sector’s trajectory:

Explosive Demand Growth: Electronics, EVs, and 5G are driving semiconductor consumption at a record pace.

Massive Investments & Government Support: The $10 billion ISM program is attracting global giants to set up manufacturing units.

Rise of Compound Semiconductors: GaN and SiC technologies are opening new opportunities in India’s semiconductor ecosystem.

India’s Place in the Global Supply Chain: Strategic partnerships with Taiwan, the US, and Japan are strengthening India’s semiconductor infrastructure.

A Skilled Workforce is the Key to Success: India must address its talent gap to sustain long-term semiconductor industry growth.

India is on the cusp of a semiconductor revolution, and its impact will be felt across technology, manufacturing, and global trade. As Prime Minister Narendra Modi aptly stated,
“India will not just be a consumer of semiconductors, but a global leader in its production.”

With a clear roadmap, substantial investments, and a skilled workforce, India is set to redefine the semiconductor industry’s future—not just domestically, but globally.