in a joint study by India Electronics and Semiconductor Association (IESA) and Counterpoint Research, found that the cumulative revenue of India’s semiconductor component market will reach $300 billion between 2021 and 2026.
According to the report titled ‘India Semiconductor Market Report, 2019-2026’, the country is on track to become the world’s second largest market in terms of scale and growing demand for semiconductor components across various industries and applications.
The research focuses on the bottom-up modeling unit as well as the revenue demand for semiconductor components covering the entire Bill of Materials (BOM) of multiple end-device and equipment categories in seven key regions of India from both domestic and export perspectives .
The sectors mentioned in this case include mobiles and wearables, information technology, automotive, industrial, telecommunications, aerospace and defense and consumer electronics.
The report also includes detailed recommendations, potential policies and a framework for developing a strong domestic semiconductor ecosystem to promote domestic production and sourcing.
what does the data show
According to the data highlighted in this report, approximately 80% of total semiconductor component revenue comes from IT (20%), industrial (9%), as well as mobile and wearables (51%).
Besides these, consumer electronics accounts for 7% of revenue, followed by telcos (5%), automotive (5%), and aerospace and defense (3%).
The report also noted that while the country is becoming one of the largest consumers of electronic and semiconductor componentMost of the components are imported, leaving limited economic opportunities for the country.
The data showed that only 9% of this semiconductor requirement is met locally.
However, the report further states: “With the government’s vision under ‘Make in India’, ‘Atmanirbhar Bharat’ and ‘PLI Scheme’, as well as the continued quest to revitalize infrastructure through adoption of digital technology, Local manufacturing of semiconductor components will be encouraged.”
The researchers are expecting that in terms of locally sourced semiconductor components in the mobile and wearable segment, the percentage was 4% in 2021, but is expected to rise to 9% by 2026. Similarly, the report pointed to a significant jump. all sections.
K Krishna Murthy, CEO and President of IESA, said, “Before the end of this decade, there will be nothing that is not affected by electronics and the ubiquitous ‘chip’. Whether from carbon emissions, renewable energy, food security, or healthcare. Ladne ho, semiconductor chip will be ubiquitous. Imagine – all children across India are educated in virtual classrooms by the best teachers of the country. Chip makes this possible.”
In addition, Tarun Pathak, Director of Research, Counterpoint Research, said that with the gradual transition from feature phones to smartphones, the proportion of advanced logic processors, memory, integrated controllers, sensors and other components has increased.
According to him: “This will continue to drive the value of semiconductor material in smartphones, which is still an under-penetrated segment in India, aided by the rise of smartwatches and wearables like TWS.”
India’s semiconductor future
In terms of revenue, India’s final appliance market was worth $119 billion in 2021, and is expected to grow at a 19% CAGR, from 2021 to 2026, the research report said.
According to the researchers, from component sourcing to design manufacturing, India’s Electronic System Design and Manufacturing (ESDM) sector is expected to play an important role in the overall development of the country.
Additionally, the report states that the Indian semiconductor industry is poised for rapid expansion in the coming years, helping India’s economy reach the next level in terms of both domestic consumption and exports.
It also noted that while local production is currently low, India has immense potential to become a major semiconductor component supplier in the coming years if talent and resources are properly harnessed.
The study also highlights that if local manufacturing and sourcing of semiconductor components picks up, “the semiconductor market could be a major contributor to economic growth, and push India to become a $5 trillion economy.” can give”.
Regarding the latest report, Eswar Rao Nandam, Chairman and Director, Polymatech Electronics Pvt Ltd, told News18 that the current usage is estimated at $300 billion, but according to him it will exceed that figure.
Similarly, Sanjay Gupta, India Vice President and Managing Director, NXP Semiconductors believes that the demand for semiconductors is set to increase manifold with increasing focus on digitalisation.
But there are concerns about India’s vision of becoming a global semiconductor hub– especially when it will be up against the chip giants, China and Taiwan.
In this case, quoting Prime Minister Narendra Modi’s Independence Day speech about the country’s ‘TEKED’ vision to become a global manufacturing hub, Gupta said: “It is clear that the Indian semiconductor industry is at an early stage, Though efforts to become a global manufacturing is quite visible with the central government’s flagship vision like ‘Digital India’ and ‘Make in India’ programme. With such rigorous efforts and focus on skill development, infrastructure etc., that day Not far away when the country will witness a paradigm shift from ‘Chip Taker to Chip Maker’.
According to Nandam, Polymatech believes that India will be in the “driver’s seat” in the semiconductor industry by 2035.
He also highlighted the fact that strong commitment and support from the central and state governments would be crucial.
The industry leader added: “Polymatec (specifically) will produce the latest fab by 2024 in stages of backward integration.”
He further explained that traditional fab construction, which uses a lot of water, can be discouraged because it takes up a lot of space, pollutes a lot of water, and destroys a lot of natural resources. gives.
Nandam said: “Polymatec is adopting the latest technology such as dicing with plasma/laser which requires minimum to zero amount of water and also adopts Industry 4.0 theme for highest quality of products.”
He also said that a proper and prompt subsidy distribution mechanism at short intervals would attract the promoters to invest in this business. According to him: “Semiconductor companies can list faster, this can help the industry to grow faster as it requires large capex.”
Lastly, Nandam suggested that India needs to invite Semicon machinery manufacturers as according to him there are few companies producing these machines and the lead time is around 180-270 days plus selling time.
News18 also got in touch with Vivek Tyagi, who is the chairman of IESA. Citing concerns over the geopolitical situation in East Asia, he said chip manufacturing capacity could be under pressure in the future.
“Granted, it is a natural consequence that entities involved in raw materials and related supply chains are likely to move to locations that offer better facilities and policies,” he said.
Tyagi therefore believes that self-reliance and indigenous semiconductor manufacturing are essential requirements in the light of this crisis and the Indian government is working to fulfill them.
Further, he added: “While in the current nature, there are a handful of countries that have the capacity to set up new semiconductor fabs, various policies that offer production linked incentives, design incentives, setting up of the Indian Semiconductor Mission, restructuring SCL, declaration of state policies, etc., will enable semiconductor manufacturing in addition to design. Setting up of fab facilities is capital intensive and complex. A strong R&D with emphasis on skill development will be the cornerstone of this effort. It’s a tough job ahead but it’s a work in progress.”
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