The semiconductor business in India is expected to develop dramatically, with forecasts estimating that it could be worth more than USD 100 billion by 2030, stated Union Minister of State for Information Technology Jitin Prasada in Parliament on Wednesday while emphasising the country's growing position in the global semiconductor ecosystem.
A series of significant measures are projected to bring the local semiconductor sector to this milestone. These include production-linked incentive (PLI) schemes for setting up chip fabrication factories (fabs), display fabs and chip testing and packaging facilities. The design-linked incentive (DLI) plan seeks to improve local chip design skills, while attempts to increase local component manufacture and large-scale electronics production are also ongoing.
The modernisation of the Centre-owned Semiconductor Laboratory in Mohali demonstrates the government's commitment to strengthening India's semiconductor infrastructure. These programs seek to increase the semiconductor market's current worth of $38 billion in 2023 to $109 billion by 2030, representing a 16 per cent compound annual growth rate.
Central to these ambitions is Tata Electronics' forthcoming semiconductor fab in Dholera, Gujarat, which is being created in collaboration with Taiwan's Powerchip Semiconductor Manufacturing Corporation (PSMC). This factory, scheduled for completion in 2027, will create 3 billion chips per year, with an emphasis on die sizes of 28nm, 50nm, 55nm and 90nm. These chips will be used in a variety of industrial applications, including trains, electric cars and white goods. The project requires a significant investment of $10.9 billion, which is backed by both government and state incentives.
Assembly, testing, marking and packaging (ATMP) and outsourced semiconductor assembly and test (OSAT) facilities contribute to the value chain. US-based Micron has announced a USD 2.75 billion ATMP facility, making it the first recipient of the Centre's PLI project.
India's expertise in chip design improves its semiconductor sector. Qualcomm, a renowned fabless US chipmaker, recently introduced a new mobile computing platform for low-cost handsets in India. According to Chris Patrick, senior vice president and general manager for phones at Qualcomm, engineers in India create a large amount of the company's networking modems and semiconductors. With 15,000 professionals, India is one of Qualcomm's major engineering design bases worldwide.
Industry estimates predict that India might account for almost one-fifth of all chip design activities worldwide, owing to the availability of native technical expertise. This tendency has prompted several renowned firms to extend their operations in India. For instance, in July of last year, Advanced Micro Devices (AMD) announced a USD 400 million investment in India to expand its chip research and development (R&D) activities, making India the world's largest semiconductor engineering hub.
In future, the Indian government intends to implement a component incentive system to encourage local value addition even more. This program, which is presently being developed, will incorporate semiconductor components as a critical component in strengthening India's position in the global manufacturing ecosystem.
