Semiconductor Chips: Will India Overtake Other Countries as a Leader?

Let’s talk about one of the hottest subjects right now: “India’s Semiconductor Dream.” In this video, we’ll examine India’s goals in this area, look at where it is now in the semiconductor market, and speculate on the country’s future. We’ll also look at recent advancements that give India’s future promise as well as how the government is promoting the expansion of this sector. Let’s study more about semiconductor chips right now.

What Semiconductor Chips Mean?

Electronic devices require semiconductor chips as crucial components. Many common electronic devices, including smartphones, digital cameras, automobiles, laptops, TVs, refrigerators, washing machines, and ATMs, run by them. When seen in a broader context, semiconductor chips are found in a huge variety of devices, including batteries, sensors, light emitters, trains, ATMs, electronic vehicles, medical equipment, and cars. In essence, semiconductors are the foundational blocks of the digital world we live in today. The semiconductor market is significantly expanding along with the advancement of digital technology.

Estimated Semiconductor Industry Market

The market for semiconductors in India is expected to increase at a CAGR of 20% from 2022 to 2026, reaching USD 55 billion due to the rising demand for semiconductors in consumer electronics and autos. In FY 2023, this growth will be more than 1.5 times the market’s current value of USD 34 billion.

These numbers show that the semiconductor sector is developing quickly. India is working hard to make a name for itself in this expanding sector. India wants to be a top leader in the industry despite its current reliance on imported semiconductor chips.

The Dependence of India on Imports

India currently relies a lot on imports to supply semiconductor chips. The nation imports semiconductors valued over USD 24 billion, mostly from Taiwan, China, Korea, and Vietnam.

Despite their tiny size in terms of geography, Taiwan and South Korea combined hold close to 50% of the world’s semiconductor market. In the production of raw semiconductors, Taiwan is without a doubt ahead of South Korea. The two biggest consumers of these countries are the US and China. It’s interesting to note that China, which has 5% of the global semiconductor industry, imports 40% of its chip needs from these two nations. Despite this, China has the largest deposit of raw resources for making chips.

India’s Present Situation

India’s presence in chip production remains limited. While the country boasts skilled engineers, it lacks indigenous chip manufacturing facilities, currently accounting for just 1% of the global semiconductor market.

However, India has a great opportunity, especially as multinational corporations look for alternatives to China. The Indian government is dedicated to growing the nation’s semiconductor ecosystem and achieving industry independence.

The Entry of India Into the Semiconductor Market

In an effort to lower imports and encourage domestic production, the Indian government is actively encouraging the expansion of the semiconductor industry.

In December 2021, the government initiated a 76,000 crore rupee incentive program to attract international chip manufacturing companies to India.

Additionally, the government announced a 50% financial support program for IT firms to encourage the establishment of semiconductor manufacturing facilities in India. Companies can get discounted prices on land, energy, electricity, and other things thanks to this incentive.

The National Policy on Electronics, the Production Linked Incentive (PLI) program, and the Semicon India Programme are just a few examples of the government’s efforts to grow the semiconductor industry.

Recent advances at Semicon India 2023 give reason for enthusiasm that India’s semiconductor dream is about to come true.

Important Declarations at Semicon India 2023

A new assembly and testing facility will be built in Gujarat as part of a USD 2.7 billion investment in India by the US-based chipmaker Micron. This facility will produce DRAM and NAND goods for both domestic and foreign markets. In India, this action is anticipated to generate more than 5,000 direct jobs and 15,000 indirect jobs.

Advanced Micro Devices (AMD), a different US-based business with a reputation for producing semiconductors. AMD has aims to invest $400 million in its Bangalore facility over the next five years. Through this investment, a research center with the potential to add 3,000 engineering jobs will be opened.

Anil Agarwal, Vedanta’s chairman, revealed a partnership with a multinational company for a semiconductor manufacturing facility. A partnership is currently in place, demonstrating Vedanta’s forceful entry into this industry.

In order to set up semiconductor manufacturing facilities in India, Taiwan-based company Foxconn and Taiwan Semiconductor Manufacturing Company (TSMC) are collaborating.

A joint venture between Foxconn and Vedanta was previously established in order to establish a semiconductor manufacturing facility in Gujarat. Foxconn eventually pulled out of the project, though.

It is noteworthy that Japan wants to collaborate with India in the semiconductor industry and plans to invest USD 35.9 billion there by 2027.

A facility for producing 150-millimeter silicon carbide, a critical component for creating semiconductors. It built in Orissa as part of an additional USD 121.73 million investment, according to the American company Silicon Power Group.


These investments reflect India’s commitment to becoming a hub for semiconductor production. Rising demand for semiconductors in electric vehicles, alongside 5G and AI advancements, drives industry growth. It will propel India’s semiconductor sector to rapid growth in the coming years. The global economy will also be significantly impacted by the semiconductor sector.

The list of semiconductor stocks demonstrates the excellent investment possibility that this industry offers. Companies poised to benefit from this industry’s expansion include Tata Elxsi, ASM Technologies, Dixon Technologies, and others.