As the global demand for semiconductors continues to surge, India is making significant strides towards establishing itself as a major player in the semiconductor industry. This shift was prominently highlighted at Semicon India 2024, a three-day event held in Greater Noida, which underscores the country’s commitment to becoming a key global semiconductor hub.
With semiconductors being deemed the “new oil” of the modern economy, their crucial role in nearly every electronic device makes them a focal point for global economic strategy. Semiconductors are composed of millions of transistors made of silicon that process data such as sounds, images, and radio waves by turning on and off like tiny electrical switches. Consumer and mobile electronics are the largest drivers of semiconductor demand, accounting for about 60% of the global market. Of this, mobile devices alone contribute to 55% of the demand.
The India Cellular & Electronics Association (ICEA), the country’s premier industry association for the mobile and electronics sectors, which works in association with the Government of India, reported that India is now the world’s second-largest producer of mobile phones after China, a significant leap since the initiation of the Make in India campaign in 2014. According to Counterpoint Research, the manufacturing value of mobile phones in India has increased 21-fold over the past decade, from Rs 18,900 crore in 2014-15 to an estimated Rs 4.1 lakh crore in FY24. By the end of FY24, India is expected to meet 97% of its domestic mobile phone demand, with mobile phone exports projected to rise to Rs 1,20,000 crore from Rs 1,556 crore in 2014-15.
The National Investment Promotion and Facilitation Agency of the Government of India, Invest India, shows the domestic electronics market in India, valued at $155 billion, reflects a growing self-reliance, with 65% of production coming from within the country.
The distribution of domestic electronics production is as follows: mobile phones (43%), consumer electronics (12%), industrial electronics (12%), IT hardware (5%), auto electronics (8%), led lighting (3%), and electronic components (11%). This diverse production base highlights India’s progress towards self-sufficiency in electronics manufacturing.
As per the Ministry of Electronics and Information Technology, India’s surge in domestic electronics demand is fuelled by rapid digitalisation, increasing internet penetration and a burgeoning startup ecosystem. With the internet user base expected to grow from 622 million in 2020 to 900 million in the near future, the semiconductor market is poised for significant growth.
India imports approximately 95% of its semiconductors from countries, including China, Taiwan, South Korea, and Singapore, as per the International Trade Association. This high dependency on semiconductors for consumer technology underscores the urgency for India to bolster its own semiconductor manufacturing capabilities.
The Ken Report of 2022 states that the Indian semiconductor market is anticipated to grow at a compound annual growth rate (CAGR) of 20% by 2027, spurred by rising demand from industrial machinery, telecommunications, automobiles and consumer electronics. As semiconductors become increasingly vital across various sectors, India’s push to develop its own semiconductor manufacturing capabilities is becoming more crucial.
HCL Tech, India’s leading next-generation global technology company with over 25 years of experience providing silicon solutions partners with six of the top 10 semiconductor OEMs globally, offering cutting-edge silicon services and strategic investments in labs and delivery centers worldwide.
Ameer Saithu, Executive Vice President of Engineering and R&D Services, Semiconductor at HCLTech, said, “HCLTech is committed to advancing the semiconductor industry in India through its strong existing collaboration with top OEMs, fabs, and OSATs. We are now furthering Semiconductor innovation with Generative AI to boost the speed and efficiency of the silicon design and production process.”
When asked how the semiconductor project of the tech giant is creating opportunities for the country’s youth, HCLTech EVP Saithu said, “HCLTech is dedicated to supporting talent development through its comprehensive training programs. Programmes like HCLTech’s six-month intense and comprehensive training for freshers in the semiconductor vertical exemplify India’s commitment to nurturing talent and pushing the boundaries of innovation. This commitment helps maintain a robust talent pool and supports India’s goal of leading the global semiconductor market.”
Saithu highlighted the country’s strengths, including its robust ecosystem and world-leading engineering universities. He said, “The government’s focus on semiconductor initiatives and investments, combined with India’s talent, innovation and strong industry presence, position the country well. India’s strengths include a robust ecosystem, world-leading engineering universities and strong industry-academia collaboration.”
Raja Manickam, a veteran in the semiconductor engineering space who is leading the effort to bring semiconductor manufacturing to India, emphasised the pivotal moment for India’s semiconductor journey. While talking about the challenges and opportunities for India’s talent pool and investors, he said, “The challenges are clear — ranging from technological gaps to cost barriers — but so are the opportunities. Innovation happens when there is no fear of meeting strict financial metrics, and it often flourishes in small groups eager to solve big, real-world problems.”
Founder & CEO of iVP Semi, a fabless semiconductor startup headquartered in Chennai, with additional offices in Singapore, Taiwan, and the US, Manickam, further said, “Government support will be crucial in addressing these hurdles, particularly by backing the expensive process of making IPs silicon-proven, which is essential for startups to gain the trust of foundries and encourage collaboration. Risk capital needs to be provided to startups and MSMEs to build up the ecosystem.”
He further said, “Additionally, building a skilled workforce through specialised training programmes in collaboration with educational institutions is critical. These programmes should emphasise practical skills and problem-solving. At the same time, streamlined financial incentives such as grants and tax breaks would help ease the financial strain on companies and encourage ecosystem partners to invest locally. Focusing on how to integrate MSMEs and startups into the Semicon 2.0 initiative is vital.”
As India continues to scale its semiconductor industry, both governmental and private sector efforts are crucial in building a self-reliant and competitive semiconductor ecosystem. The Indian government’s efforts, alongside industry leaders like HCLTech and new growing ventures like iVP Semi, are paving the way for India to become a global semiconductor powerhouse.
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