Government initiatives drive India’s semiconductor market to $100 billion by 2030: Report

India’s semiconductor industry on the rise

India’s semiconductor market is projected to exceed $100 billion in revenue by 2030, fueled by government initiatives such as the production-linked incentive (PLI) scheme and a strong demand for digital infrastructure across various industries, according to a report released on Wednesday.

The mobile handset, IT, and telecom sectors are leading contributors to the semiconductor industry, accounting for over 75 percent of total revenues, as highlighted in a report by the India Electronics and Semiconductor Association (IESA) in collaboration with Counterpoint Research.

The Indian government’s $9.1 billion ‘Semicon India’ program aims to enhance semiconductor manufacturing and workforce development, which is expected to spur innovation and growth within India’s tech ecosystem. “India has created one of the largest smart populations in the world, powered by semiconductors operating in the background. Semiconductors have a profound commercial, strategic, and social impact,” stated Ved Prakash Mall, Director of IESA.

Semiconductors are integral to a variety of sectors, including electronics manufacturing, digital transformation, defence, aerospace, renewable energy, IoT, healthcare, automotive, and research. Currently valued at $45 billion, India’s semiconductor market is anticipated to grow at a compound annual growth rate (CAGR) of 13 percent, reaching over $100 billion by 2030.

Tarun Pathak, Research Director at Counterpoint Research, emphasized that the handset sector is pivotal to this growth. “The transition from feature phones to smartphones is a key driver of India’s digital transformation,” he said. The rise in smartphone adoption is bolstered by increased use of social media, OTT platforms, affordable pricing, and the widespread availability of data, alongside the expansion of the 5G network.

Union Minister for Electronics and IT, Ashwini Vaishnaw, remarked earlier this month that India is on the path to becoming the next global semiconductor hub, with substantial investments pouring into the sector. More than Rs.1.52 lakh crore (nearly $18 billion) has already been invested in India’s semiconductor manufacturing landscape, with numerous projects in the pipeline.

Neil Shah, Vice President at Counterpoint Research, noted that the telecom sector is central to this expansion, particularly with the ongoing rollout of 5G and fiber networks. He highlighted that initiatives like BharatNet and fixed wireless access (FWA) solutions are crucial in areas where fiber deployment is challenging. “The demand for semiconductors in India will be driven by the need for high-speed connectivity,” Shah added.

As India gears up for a semiconductor revolution, the combination of government support, strategic investments, and a growing digital landscape positions the country as a key player in the global semiconductor market.

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