With rising demand across electronics and telecom, according to a report, India’s chip market is set to triple within the decade.
India’s continued push to build a domestic semiconductor ecosystem could reduce its dependency on chip imports by $10 to $20 billion in the coming years, according to a report by McKinsey. The projection underscores the impact of recent policy moves aimed at boosting local manufacturing and positioning India as a competitive player in the global value chain.
The country’s semiconductor market, currently valued at around $34.3 billion, is expected to exceed $100 billion by 2032. This rapid growth is being driven by rising demand from sectors like consumer electronics, automotive, telecom, and industrial systems.
Traditionally, India has played a significant role in semiconductor design. It contributes close to one-fifth of the global workforce in this domain and hosts research and development operations for many major global companies.
Recent developments indicate a shift towards expanding domestic capabilities beyond design. Several large-scale projects, each ranging from $3 billion to $11 billion, have been announced over the past year. These initiatives primarily focus on outsourced semiconductor assembly and testing (OSAT) and legacy-node fabrication.
The government has committed approximately $10 billion in incentives to encourage this transition and attract investment. However, the shift to high-end chip fabrication is expected to be gradual. India is targeting manufacturing at nodes above 14nm by the end of the decade, while advanced sub-10nm capabilities may take longer to materialise, given the capital-intensive nature and technical barriers involved.
If successful, this ongoing transformation could strengthen India’s role in the global semiconductor supply chain and reduce exposure to external supply shocks.
