India’s semiconductor market projected to surpass $100 Billion by 2030, says government

India’s semiconductor market is on track to exceed $100 billion in valuation by 2030, according to Union Minister of State for Information Technology, Jitin Prasada. Addressing Parliament on Wednesday, Prasada emphasized that the country’s burgeoning chip design and engineering sector will play a pivotal role in achieving this milestone.

Key government initiatives underpinning this growth include Production-Linked Incentive (PLI) schemes designed to establish chip fabrication plants (fabs), display fabs, and chip testing and packaging facilities. Additionally, a Design-Linked Incentive (DLI) scheme aims to bolster local chip design capabilities, while efforts to promote domestic manufacturing of large-scale electronics and components further enhance the industry’s expansion.

Significantly, the modernization of the Centre-owned Semi-Conductor Laboratory in Mohali is underway, which is expected to contribute to the market’s growth trajectory.

Prasada noted that the market value of India’s semiconductor industry stood at $38 billion in 2023 and is projected to grow at a compound annual growth rate (CAGR) of 16%, reaching $109 billion by 2030. A major catalyst for this growth is the upcoming semiconductor fab being developed by Tata Electronics in partnership with Taiwan’s Powerchip Semiconductor Manufacturing Corporation (PSMC) in Dholera, Gujarat. Scheduled to begin operations by 2027, this facility is set to produce 3 billion chips annually, with a total investment of $10.9 billion, including government incentives.

The Dholera chip fab will manufacture chips in a range of sizes, including 28nm, 50nm, 55nm, and 90nm, suitable for industrial applications such as railways, electric vehicles, and consumer electronics. The facility will be complemented by Assembly, Testing, Marking, and Packaging (ATMP) and Outsourced Semiconductor Assembly and Test (OSAT) services, with US-based Micron already committing $2.75 billion to establish an ATMP facility as part of India’s PLI initiative.

India’s semiconductor hub is also bolstered by a robust chip design industry. Qualcomm recently announced a new mobile processing platform designed specifically for budget-range smartphones in India. Chris Patrick, Senior Vice President and General Manager for handsets at Qualcomm, highlighted that a significant portion of the company’s chips are designed by engineers based in India, underscoring the country’s importance in the global semiconductor ecosystem.

With an estimated 15,000 engineers, India is one of the largest engineering design bases for Qualcomm, second only to its San Diego headquarters. This growth in chip design operations is expected to be a key driver in reaching the $100 billion market valuation.

Looking ahead, the Indian government is expected to introduce additional incentives aimed at boosting domestic value addition in semiconductor components, further strengthening India’s position in the global manufacturing value chain.