India Chip Manufacturing Market

The India India Chip Manufacturing Market is valued at USD 28.02 Billion in 2023 and is projected to reach a value of USD 165.43 Billion by 2032 at a CAGR (Compound Annual Growth Rate) of 17.60% between 2024 and 2032.

Key Highlights of India Chip Manufacturing Market

• India is poised for significant growth in the semiconductor market through targeted investments, talent promotion, and international partnerships.
• The development of AI technologies is driving a significant increase in demand for advanced semiconductors.
• Government initiatives have led to a 7% increase in semiconductor job openings between 2019 and 2023.

{{bar_graph}}

India Chip Manufacturing Market Government Initiatives:

• Indias robust support for semiconductor and display manufacturing, with an allocation of INR 690.3 million (USD 83.28 million) in the 2024 Union Budget, signals a promising future for the industry. The revised expenditure estimate for FY24 is INR 150.3 million (USD 18.14 million), further underlining the governments commitment. The 'Modified Programme for Development of Semiconductors and Display Manufacturing Ecosystem in India offers a 50% fiscal incentive on project costs for setting up semiconductor and display fabs, paving the way for significant growth.
• The semiconductor schemes, including the Design Linked Incentive (DLI) Scheme, have been met with great success, with the application window open until December 2024. The DLI scheme, which has already received 26 applications and approved five, is a testament to the effectiveness of Indias initiatives. The broader semiconductor and display manufacturing scheme, worth INR 760 billion, has attracted 45 applications, covering semiconductor fabs, display fabs, compound and ATMP facilities, and design-linked incentives, further bolstering confidence in the 'Make in India' campaign.
• Indias initiatives are part of the 'Make in India' campaign, launched in 2014, to boost manufacturing and establish India as a global manufacturing hub. Key schemes include the Production Linked Incentive (PLI) scheme, offering a USD1.7 billion incentive package for semiconductor manufacturing facilities. Other supporting programs include the Design Linked Incentive (DLI) and the Chips to Startup (C2S) initiative.
• Stephen Ezzell of the Information Technology and Innovation Foundation (IT&IF) noted that Indias semiconductor incentives are among the worlds most attractive. Approved fabs can receive up to 70% of project costs reimbursed, combining federal and state support.
• Government initiatives have led to a 7% increase in semiconductor job openings between 2019 and 2023. To bolster the industry further, the country plans to invest in electronics manufacturing hubs and startup incubators, such as the Electropreneur Park and T-Works in Hyderabad.

{{CountryImage}}

The India Chip Manufacturing market can be categorized as Type, Composition Type, Components, Material Type, Application, and End-User

Key Trends

1. The development of AI technologies is driving a significant increase in demand for advanced semiconductors. AI-related chip revenues are projected to reach USD 71 billion by 2025. Start-ups and established companies like Intel and Nvidia are competing in this space, fueling market growth.
2. Indias rapid adoption of new technologies like 5G and electric vehicles (EVs) is boosting semiconductor demand. The rollout of 5G networks will increase the use of smart devices, while growing EV sales—over 236,000 units in 2021—are driving the need for advanced semiconductor solutions.
3. India has become a global leader in semiconductor design, with Indian engineers making up 20% of the worlds semiconductor design workforce. Government initiatives and curriculum changes are enhancing this talent pool, supporting further industry growth.
4. Significant investments are being made in chip packaging and testing facilities in India. Tata Electronics is building a USD3.25 billion plant in Assam, and a joint venture led by CG Power is developing a USD900 million facility in Gujarat. These projects aim to position India as a key player in the global semiconductor supply chain, with production starting as soon as 2024.

India Chip Manufacturing Market Future Overview:

India is poised for significant growth in the semiconductor market through targeted investments, talent promotion, and international partnerships. Projections from Vantage Market Research indicate that by 2026, Indias semiconductor revenue could reach USD55 billion. This forecast underscores Indias transition from being solely a market to a key production hub. Achieving this ambition demands strategic foresight, substantial investments, and global collaborations. Both government and industry have already taken crucial steps to foster a favourable ecosystem for semiconductor development. With a focus on nurturing talent, fostering international partnerships, and establishing cutting-edge manufacturing facilities, India is on the brink of assuming a pivotal role in the global semiconductor landscape.

{{dashboard_image}}

Track market trends LIVE & outsmart rivals with our Premium Data Intel Tool: Vantage Point

India Chip Manufacturing Market: Top Three Projects

1. Semiconductor Fab at Dholera, Gujarat

Indias first commercial semiconductor fabrication facility is being established in Dholera, Gujarat, through a collaboration between Tata Electronics Private Limited (TEPL) and Taiwans Powerchip Semiconductor Manufacturing Corp (PSMC). With an investment of INR 9100 billion (USD 109.71 billion), this facility will have a capacity of 50,000 wafer starts per month (wfsm). It will produce high-performance compute chips using 28 nm technology, as well as power management chips for electric vehicles, telecom, defense, automotive, consumer electronics, and power electronics. The first chips are expected by the end of 2026. TEPL and PSMC are currently focusing on technology transfer.

1. Semiconductor ATMP Unit at Morigaon, Assam

Tata Semiconductor Assembly and Test Pvt Ltd (TSAT) is investing INR 2700 million (USD 325.99 million) in an Assembly, Test, Marking, and Packaging (ATMP) unit in Morigaon, Assam. This unit will develop advanced semiconductor packaging technologies like flip chip and integrated system in package (ISIP). With a daily capacity of 48 million units, it will cater to the automotive, electric vehicles, consumer electronics, telecom, and mobile phone sectors.

1. Semiconductor ATMP Unit at Sanand, Gujarat

CG Power, in partnership with Japans Renesas Electronics Corporation and Thailands Stars Microelectronics, is setting up a semiconductor ATMP unit in Sanand, Gujarat, with an investment of INR 760 million (USD 91.63 million). This facility will manufacture specialized chips for consumer, industrial, automotive, and power applications, with a capacity of 15 million units per day.

India Chip Manufacturing Market Foreign Investment Overview

The Government of India has approved 100% Foreign Direct Investment (FDI) in the Electronics Systems Design & Manufacturing sector. From April 2000 to December 2016, the sector received USD 1.70 billion in FDI. Major American semiconductor firms are investing heavily, marking a new era of US-India collaboration aimed at enhancing semiconductor supply chains.

India is also forming international partnerships to strengthen its semiconductor ecosystem. An agreement with the European Union aims to build resilient semiconductor supply chains. Indias geopolitical position makes it an attractive alternative to China for the US, leading to significant investments from companies like Micron Technology. Micron is investing over USD800 million in a semiconductor facility in Gujarat, creating numerous jobs.

California-based Applied Materials plans to open an engineering centre in Bengaluru to foster collaboration and innovation. Lam Research Corporation aims to train 60,000 Indian engineers in nanotechnology over the next decade, boosting India’s semiconductor workforce.

Joint ventures are also emerging. Renesas, Stars Microelectronics, and CG Power will build a USD900 million packaging plant in Gujarat. Additionally, Micron is developing a packaging and test facility with significant financial backing from the Indian government. Israel’s Tower Semiconductor is negotiating an USD8 billion fabrication plant in India, which would be a major milestone for the countrys chip manufacturing ambitions

India Chip Manufacturing Market - Competitive Landscape

Indias semiconductor market is experiencing rapid growth driven by increasing demand in electronics, automotive, and telecommunications. Key players include global giants like Intel, Samsung, and TSMC, along with local companies such as Vedanta-Foxconn and Tata Electronics. Government initiatives like "Make in India" and PLI schemes are fostering domestic manufacturing and R&D. Startups and SMEs are also emerging, contributing to innovation and competitiveness. Collaborations with foreign firms for technology transfer are enhancing capabilities. The competitive landscape is marked by a mix of established multinational corporations, ambitious local enterprises, and supportive government policies, positioning India as a significant player in the global semiconductor industry.

• In February 2024, Samsung Semiconductor India Research (SSIR) inaugurated a semiconductor R&D facility in India at Bengaluru.
• In March 2024, Murugappa Group’s CG Power and Industrial Solutions Ltd. (CG Power) formed a joint venture with Renesas Electronics America Inc. (Renesas) and Stars Microelectronics (Thailand) Public Co. Ltd. (Stars) to establish an outsourced semiconductor assembly and testing (OSAT) facility in Gujarat, India.
• In January 2024, HCL, the Indian IT sector conglomerate, is pursuing a joint venture (JV) with Taiwanese electronics manufacturing services giant Foxconn to set up a semiconductor Outsourced Assembly and Testing (OSAT) unit in India; Foxconn will have 40 percent equity for USD 37.2 million.
• In November 2023, American multinational semiconductor company AMD inaugurated its largest global design centre, the Technostar research and development campus, on November 28 in Bengaluru. This was part of a USD400 million investment over the next five years in India.