What is the future of the semiconductor industry in India?

In a recent research report, it was noted that the semiconductor industry in India soared to US$34.3 billion in 2023 and is forecasted to surge to US$100.2 billion by 2032, demonstrating an impressive compound annual growth rate (CAGR) of 20.1% from 2023 to 2032.

The latest 2024 Union Budget substantially boosted funding for the semiconductor industry in India and the display manufacturing initiative, allocating a 130% increase to INR 690.3 million (US$83.28 million). According to government finance documents, the revised estimated expenditure for the ‘Modified Programme for Development of Semiconductors and Display Manufacturing Ecosystem in India’ in FY24 stands at INR 150.3 million (US$18.14 million).

Leveraging India’s strengths in chip design, the newly approved units are poised to foster chip fabrication capabilities and bolster indigenous packaging technology advancements. This initiative is expected to spawn numerous employment opportunities, with the government projecting the direct creation of 20,000 high-tech positions and an additional 60,000 indirect jobs in the semiconductor industry.

India foresees a “ripple effect” that will accelerate job prospects across downstream industries such as automotive, electronics, and telecom growth in India. By 2026, it is estimated that India will generate over 300,000 jobs in the semiconductor industry in various domains, including testing, engineering, software development, system circuits, validation, and operations. This expansion promises to invigorate India’s technological landscape and boost economic growth significantly.

Government initiatives and schemes for the Semiconductor Industry in India

The Semicon India Program has fortified India’s strides towards a robust semiconductor industry. The government allocating INR 760 billion to propel companies engaged in silicon semiconductor fabs, display fabs, compound semiconductors, silicon photonics, sensors fabs, semiconductor packaging, and design. This initiative aims to bolster India’s semiconductor ecosystem and telecom growth in India.

The India Semiconductor Mission (ISM), which is tasked with implementing and overseeing the Semicon India Program, is driving this initiative forward. The ISM handles application processes, conducts technical and financial appraisals, recommends applicant selections, and executes other responsibilities delegated by the Ministry of Electronics and Information Technology (MeITY).

Semiconductor Fabs Scheme: Under this scheme, the government pledges up to 50% of the project cost for establishing silicon-based semiconductor wafer fabrication facilities across different technology nodes in India. State governments or local bodies can extend additional financial backing. Applicants must commit to a minimum capital investment of INR 200 billion and demonstrate a minimum revenue of INR 75 billion over the preceding three financial years.

Display Fabs Scheme: Similarly, the government offers up to 50% of the project cost to design display fabrication units for manufacturing TFT LCD/AMOLED-based display panels. State governments or local bodies may provide supplementary financial support. Applicants are required to invest a minimum of INR 100 billion and exhibit a minimum revenue of INR 75 billion over the preceding three financial years.

Design Linked Incentive (DLI) Scheme: The DLI Scheme incentivises semiconductor design activities by offering financial incentives and support for design infrastructure over a five-year period. This scheme is accessible to companies owned and controlled by resident Indians, startups, and micro, small, and medium enterprises engaged in semiconductor design or linked activities.

Hiring activities in the Semiconductor Industry

In 2024, the semiconductor industry in India is witnessing a significant surge in demand for skilled professionals, with an estimated total demand ranging between 40,000 to 50,000 employees across various job roles. This reflects a notable 25-30% increase compared to the previous year, underlining the sector’s rapid growth and evolving needs.

India is set to generate an impressive 800,000 to 1 million jobs in semiconductor industry over the next five years, highlighting sustained growth and promising prospects within the semiconductor ecosystem. This anticipated expansion underscores the industry’s pivotal role in driving employment and innovation, offering substantial avenues for individuals aiming to enter or progress within this dynamic field.

The surge in demand reflects the industry’s increasing reliance on advanced technologies and the ongoing digital transformation across sectors. As the semiconductor market continues to evolve and scale, it presents compelling opportunities for skilled professionals to contribute to and benefit from its ongoing success and development. This growth trajectory underscores the significance of cultivating talent and expertise in this critical sector to meet the burgeoning demands of tomorrow’s technology landscape.

Final thoughts

India’s semiconductor industry is on a trajectory of significant growth, driven by substantial government investments and strategic initiatives. With a forecasted surge to US$100.2 billion by 2032 and ambitious job creation targets, India’s semiconductor ecosystem promises innovation, employment, and economic expansion. Initiatives like the Semicon India Program and the Semiconductor Fabs Scheme are crucial for nurturing indigenous capabilities. Skilled professionals are needed to capitalise on emerging opportunities, propelling India towards technological prowess and sustained economic prosperity.

Author

Subburathinam P

CSO
TeamLease Services Limited

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