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India’s semiconductor market to cross $150 billion by 2030

India’s semiconductor market is expected to exceed USD 150 billion by 2030, with AI chips alone accounting for over USD 21 billion. A report highlights Bengaluru’s dominance in the sector, government incentives, and challenges such as reliance on imports and capital-intensive fabrication requirements.

News Arena Network - Mumbai - UPDATED: April 2, 2025, 11:43 AM - 2 min read

Representative image.


India’s semiconductor market is projected to surpass USD 150 billion by 2030, with artificial intelligence (AI) semiconductors alone presenting a market opportunity of over USD 21 billion, a report by Basic Roots Consulting has revealed.

 

The report highlighted that two-thirds of Indian semiconductor startups are based in Bengaluru, while the central government is expected to cover half of the semiconductor manufacturing setup costs. India currently has more than 100 semiconductor startups, with 20 per cent of the global semiconductor integrated circuit (IC) design workforce hailing from the country.

 

The increasing demand for electronics and semiconductors in India is fuelled by rising incomes, growing digital adoption, and a substantial domestic market projected to reach USD 110 billion by FY30, the report stated. The number of semiconductor design startups in India has grown 2.4 times since 2014 and is expected to continue its upward trajectory.

 

On India’s semiconductor manufacturing landscape, the report noted that strong design capabilities and a skilled workforce are among the country’s key strengths. It further stated that with USD 18 billion invested across five projects, India’s semiconductor ambitions are gaining momentum. The country contributes 20 per cent of the global chip design workforce.

 

The report also pointed to the expanding OSAT (Outsourced Semiconductor Assembly and Test) and ATMP (Assembly, Testing, Marking, and Packaging) ecosystem as a major factor in semiconductor growth. Companies such as Tata, Micron, and Keynes are making significant investments in advanced chip packaging and testing. ATMP focuses on the final assembly and packaging of chips, whereas OSAT involves outsourcing these processes to specialised firms.

 

Government incentives are expected to play a crucial role in fostering growth in the semiconductor sector. However, the report identified several challenges for Indian companies, including the absence of advanced foundries, supply chain dependencies, and the capital-intensive nature of the industry.

 

India currently lacks state-of-the-art semiconductor fabrication plants, with the sector still being dominated by foreign players such as TSMC and Samsung. Heavy reliance on imports for wafers, photomasks, specialty gases, and chemicals presents additional challenges. The high capital requirements of semiconductor fabs, which necessitate multi-billion-dollar investments, also pose hurdles to the industry’s expansion.

 

In response, India has launched the Semicon India programme, with a total outlay of Rs 76,000 crore, to support semiconductor and display manufacturing initiatives. The programme aims to provide financial assistance to companies investing in semiconductor fabrication, display manufacturing, and design ecosystem development, thereby bolstering India’s role in global electronics value chains.

 

Additionally, the India Semiconductor Mission (ISM) has been established as an independent business division within the Digital India Corporation. It has been granted administrative and financial autonomy to formulate and execute long-term strategies for developing India’s semiconductor and display manufacturing facilities, as well as its semiconductor design ecosystem.

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