India Semiconductor Industry: Growth, Trends, and Opportunities
India’s semiconductor industry is growing significantly, driven by increasing domestic demand, government initiatives, and global supply chain shifts. As the sector expands, the need for comprehensive market research and feasibility studies becomes crucial for companies looking to capitalize on this flourishing market. This page highlights the current trends, growth potential, and opportunities in the India semiconductor industry.
Market Growth Potential in Semiconductor Market India
The Indian semiconductor is projected to reach a valuation of $64 billion by 2026 growing at a CAGR of 15.8% from 2023 to 2028.1 This growth is fueled by rapid digitization across various sectors like automotive, consumer electronics, and industrial manufacturing. The country’s expanding middle class along with increased smartphone penetration and inclusion of emerging technologies like 5G, IoT, AI, and Machine Learning have further amplified the demand for semiconductors.
Key Trends and Drivers Shaping Semiconductor Growth
Several trends are driving semiconductor growth in India:
- Localization of supply chains: Global companies are diversifying their manufacturing bases, with India emerging as an attractive alternative
- Rise of fabless companies: Indian startups are focusing on chip design, leveraging the country’s strong software expertise
- Automotive sector growth: The push towards electric vehicles is driving demand for power electronics and sensors
- Government initiatives: Policies like “Make in India” and the Production Linked Incentive (PLI) scheme are attracting investments to support the India semiconductor industry.
Government Semiconductor Initiatives Post-2024 Budget
The 2024 Union Budget of India reaffirmed the government’s commitment to developing the semiconductor ecosystem by providing a budgeted estimate of Rs. 6,903 crores.2 Key initiatives include:
- Extension of the PLI scheme for semiconductors, offering financial incentives for manufacturing units for incremental sales, fund allocation to promote manufacturing and attract global players
- Allocation of funds for skill development programs, upgrades of ITIs, preparing a skilled workforce of 85,000 technicians, engineers, and researchers focused on semiconductor design and fabrication
- Tax benefits like simplified tax regime, reduced corporate tax for foreign companies, reduction of basic custom duty on mobile PCBA to 15%3, reduced costs for electronic components, slashed duties on raw materials for companies investing in R&D related to semiconductor technology
- Creation of special economic zones (SEZs) dedicated to semiconductor manufacturing including tax benefits such as exemption from customs duties, excise duty, and income tax, infrastructural benefits such as roads, power supply, and communication facilities and administrative benefits such as streamlined administrative procedures, reducing the regulatory burden
Role of Market Research and Semiconductor Feasibility Studies
As the sector evolves rapidly, companies need accurate and timely insights to make informed decisions and stay ahead of the increasing competition. Market research and feasibility studies play a crucial role by:
- Assessing market demand and identifying niche opportunities
- Analyzing competition and potential partnerships
- Evaluating the regulatory landscape and potential policy impacts
- Estimating capital requirements and return on investment
MBG Corporate Services: Supporting Semiconductor Companies
MBG Corporate Services offers tailored solutions for companies in the semiconductor sector. Their services include:
- Comprehensive market analysis and forecasting
- Competitor benchmarking and SWOT analysis
- Regulatory compliance advisory
- Feasibility studies for new manufacturing units or R&D centers
- Supply chain optimization strategies
By leveraging MBG’s expertise, semiconductor companies can navigate the complex Indian market, identify growth opportunities, and develop strategies aligned with market trends and government initiatives.
Conclusion: Future of India Semiconductor Industry
As India’s semiconductor sector continues to grow, thorough market research and feasibility studies will be indispensable tools for companies aiming to succeed in this dynamic and promising market.
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