india-aims-for-300-billion-electronics-production-by-fy26-sparking-100-billion-semiconductor-demand

India is intensifying efforts to bolster semiconductor production as it targets reaching $300 billion in electronics manufacturing by fiscal year 2026, sparking a demand surge for chips estimated at $90-$100 billion, primarily driven by domestic mobile phone assembly, according to data from the India Cellular and Electronics Association (ICEA).

The current electronics manufacturing industry, standing at nearly $103 billion, translates to a semiconductor requirement ranging between $26 and $31 billion, considering an industry average of 25 to 30 percent of chip components in any electronics product’s bill of material (BOM).

The ICEA projects a substantial rise in semiconductor demand as electronics production is expected to soar to $300 billion by 2026. Mobile phone manufacturing's contribution to overall electronics production has skyrocketed from 10 percent to a staggering 44 percent over the past seven years.

In fiscal year 2023, integrated circuits (ICs) imports totaled $16.14 billion, with $12 billion dedicated solely to mobile phones, according to ICEA data.

While advanced processor chips may take time before India can competitively produce them, the ICEA suggests that fabricating processor chips for entry-level smartphones in India holds commercial viability, presenting a potential avenue for new semiconductor fabs.

Data indicates that with a monthly output of approximately 1.5 million units (10–14 nm) of chipsets, the annual output could reach around 18 million chipsets, assuming 15,000 wafers of 300mm at 70 percent yield from a fab, with an estimated number of dies per wafer of 148.

The pressing task ahead for stakeholders is to translate the growing semiconductor demand into domestic production, thereby reducing dependency on imports, according to ICEA.

Prime Minister Narendra Modi laid the foundation stone for three semiconductor projects valued at Rs 1.25 lakh crore in March. The inaugural 'Make in India' chip is expected to roll out in December this year from the Micron semiconductor plant in Gujarat.

India's semiconductor ambitions align with its broader vision of self-reliance and economic growth, positioning the nation as a key player in the global electronics market.