India’s semiconductor push to drive $300 billion market by 2035: Report

India's semiconductor industry is on the brink of a transformative expansion, with projections indicating a potential growth from its current market size to USD 300 billion by 2035. This ambitious forecast is detailed in a report by Deloitte, which highlights the driving forces behind this growth, including the rapid adoption of artificial intelligence (AI), the burgeoning automotive sector, and the expansion of data centers. Currently, India imports over 90 percent of its semiconductor requirements, but this is set to change as local production ramps up to meet more than 60 percent of domestic demand by the end of the next decade.

The report outlines that India's semiconductor market is estimated to be valued between USD 45 billion and USD 50 billion for the fiscal year 2024-25, with a compound annual growth rate (CAGR) of 20 percent observed over the past three years. By 2030, the market is expected to reach USD 120 billion, significantly bolstered by advancements in AI, automotive technologies, data centers, and electronics manufacturing. The projection for 2035 includes the establishment of 4 to 5 silicon fabrication plants (fabs), 8 to 10 compound fabs, 1 to 2 display fabs, and 20 to 25 Outsourced Semiconductor Assembly and Test (OSAT) facilities, all supported by the India Semiconductor Mission (ISM) and various state-level incentives.

Investment and Infrastructure Development

The growth trajectory of India's semiconductor industry is not just a matter of projections; it is already attracting substantial investments. According to the report, the sector has garnered over USD 19 billion in manufacturing investments across 10 approved projects, which encompass eight OSAT facilities, one compound fab, and one semiconductor fab. Furthermore, an additional 18 to 20 proposals are currently in the pipeline, with anticipated investments ranging from USD 20 billion to USD 25 billion.

Over the next five years, the semiconductor industry is expected to attract an additional USD 50 billion in capital investment. Between 2030 and 2035, further investments of USD 75 billion to USD 80 billion are projected, which will facilitate the expansion of the semiconductor ecosystem. This growth is expected to create approximately 2 million jobs by 2035, with 30 percent of these roles in manufacturing operations, another 30 percent in design services, and the remaining 40 percent distributed across other areas of the value chain. To support this workforce expansion, the industry will require the training of 400,000 to 500,000 individuals annually through specialized courses and training facilities.

Challenges Ahead

Despite the optimistic outlook, Deloitte has cautioned that maintaining this momentum hinges on effective execution. The report emphasizes the necessity for a policy environment that evolves from temporary incentive schemes to a more robust, long-term national program. This would ensure funding certainty that extends beyond the constraints of annual budget cycles. Moreover, the report calls for enhanced coordination between the central government and state authorities to establish a streamlined execution framework for land acquisition, utility provision, and infrastructure development.

Why it matters

The implications of this projected growth in India's semiconductor market are significant for both creators and technologists. For creators, particularly those involved in AI and automotive sectors, the anticipated increase in local semiconductor production could lead to reduced costs and improved access to essential components. This could foster innovation and accelerate the development of new technologies, as creators will be less reliant on imports and more able to leverage local manufacturing capabilities.

For technologists, the expansion of the semiconductor ecosystem presents an opportunity for career growth and development. The projected job creation in various segments of the semiconductor industry indicates a burgeoning demand for skilled professionals, which can lead to advancements in technology and engineering practices. However, this also underscores the importance of educational institutions and training programs to prepare the workforce for the evolving demands of the industry.

In conclusion, India's semiconductor market is poised for substantial growth, driven by a combination of local production initiatives and increasing demand across multiple sectors. The successful execution of this vision will require strategic planning and collaboration among various stakeholders to ensure that the country can meet its ambitious goals by 2035.