Why Businesses should Invest in Semiconductor Manufacturing in India

Semiconductors are the essential part of the growing digital ecosystem of the current time. Transistors, diodes, and integrated circuits form the basis of computers, smart phones, medical devices, hardware equipment among others.

As it is a critical component in the overall technology and ICT value chain, India is seeking huge investments to develop a robust and resilient transistor supply chain, with increased focus on indigenous manufacturing. And hence, there comes a need for Feasibility Report For Electronics Sector.

As far as semiconductors’ manufacturing process is concerned it is multi-faceted, time consuming, and complex. Some examples include Wafer Preparation, Photolithography, Ion Implantation, Packaging, Testing etc.

The Indian semiconductor industry is valued at USD XX billion in 2023, growing at a CAGR of YY% (numbers withheld) The government’s ‘Make in India’ campaign provides incentives for this sector to grow and evolve. Expanding domestic market, availability of proficient manpower; increased emphasis on design & development activities are some other factors driving growth. Meanwhile as EVs AI, IOT-based technologies are increasing their footprint, demands will further gain momentum.

Market Growth Drivers

- As per the Marketing Research Services In ICT Industry India is one of the world’s largest smartphone markets, propelling the demand for app processors, memory chips, etc. Electrification of transport industry is fuelling demand for semiconductors used in powertrain, infotainment and safety systems. Moreover, the demand for laptops, televisions and other consumer electronics necessitates large-scale use of semiconductors.

- Manufacturing projects undertaken by government have received financial incentives through Production Linked Incentive (PLI) scheme as well as Design Linked Incentive (DLI). For instance, PLI alone has an incentive package worth 1.7 billion dollars meant to encourage firms setting up semiconductor plants in India. As part of the $900 million fund for semiconductors in 2023, the government has sanctioned four schemes. The need for Feasibility Report For Electronics Sector comes up and India Watch can truly help you in this.

- Rising data centers trends include increased access to internet services and cloud computing alongside IoT devices that rely heavily on semiconductors. According to Feasibility Report For Semi Conductor Business the introduction of 5G networks shall open new avenues for semiconductor manufacturers in RF transceivers besides baseband processors. AL and ML cannot function without high-performance hardware, this propels demand for advanced processors and accelerators.

Mega Partnerships and Key Investments in the Sector

- The strategic alliance between Tata and Powerchip is an important step towards India’s ambition of becoming a semiconductor hub. The main objective of this partnership is to establish a 12-inch wafer fab in Dholera, Gujarat. The first fabrication facility in India for that matter aims at enhancing domestic semiconductor ecosystem, creating thousands of jobs and reducing the dependence on imports. The investment for the project will be approximately USD 3.2 billion with a production capacity of 48 million chips per day.

- Israel’s Tower Semiconductor has submitted its proposal to invest USD 8 billion in constructing its chipmaking plant for producing 65 nm and 40 nm chips. This suggestion is still being looked into, but it underlines Indian market’s attractiveness as an option for chip-making services and R&D performance.

- HCL partners with Foxconn to establish a semiconductor Outsourced Assembly and Testing (OSAT) unit in India. Accordingly, HCL’s design skills and Foxconn’s manufacturing capability are combined to help develop the global semiconductor value chain in India more effectively. Sources indicate that Foxconn takes up 40% equity valued at USD 37.2 million. Additionally, HCL has signed up with Karnataka government to set up another OSAT unit in the state. It plans an investment of about USD 400 million to set up a small-to-medium sized facility as per the Market Study For Semi Conductor Business In India.

- AMD’s significant investment of USD 400 million to design it’s largest global design centre is a crucial step towards India’s semiconductor landscape. The establishment of technostar has been done in bangalore and it aims to accelerate the development of cutting-edge semiconductor technologies. AMD is all set to leverage on country’s engineering talent and create considerable jobs in the segment. Technostar's primarily focuses on designing high-performance CPUs, GPUs, and adaptive SoCs.

- Kaynes Technology, an Indian brand decided to enter OSAT/ATMP services space with USD 500 million to set up a Semi-conductor OSAT and Compound Semi-conductor facility at Kongara near Hyderabad. This development can be seen as a step towards self-sufficiency in electronics manufacturing by the Indian government and it is anticipated to attract more investments in its semi-conductor ecosystem.

- The decision by CG Power, Renesas and Stars Microelectronics to establish an OSAT facility in Gujarat that will cater for the growing demand for Semiconductor Packaging and Testing Services is strategic. The facility aims to cater the thriving demand across the segments like automotive and consumer electronics. The initiative will localize crucial domain of India’s semiconductor industry and cut down the dependency on imports.

- As of the end of October 2023, the government has received a total of 45 applications under its USD 9 billion semiconductor and display manufacturing scheme. These applications cover five requests for the establishment of semiconductor fabs, two for display fabs, nine for the setup of compound and ATMP facilities, and 29 for the design-linked incentive scheme.

TOP HOMEGROWN SEMICONDUCTOR BRANDS:

LEADING INTERNATIONAL BRANDS GROWING IN INDIA:

: AMD is famous for its CPUs and GPUs that are highly efficient, which makes it a strong rival to Intel. Its key verticals are gaming, data centers, and embedded systems and mainly drive its revenue & growth. AMD’s signature processor Ryzen has gained a massive popularity in recent years. Market Research And Feasibility Service For Electronics Industry will be giving more details with in-depth research.

: Intel is one of the pioneers in semiconductors industry and a major player in CPU market. Facing several challenges over the years but remains a mighty force in computing technologies. India houses Intel's largest engineering site outside the United States, employing almost 13,000 professionals as of 2023.

: NXP specializes in secure connectivity solutions with notable presence in automotive as well as industrial sectors. Growth is driven by its expertise in embedded systems coupled with radio frequency technology.

: Qualcomm is mainly focused on mobile chipsets, which power most of the world’s smartphones. High performance mobile devices have become synonymous with Snapdragon platform. Samsung, Xiaomi, Oppo and Vivo are some major B2B customers of the brand. Get Marketing Research Services In ICT Industry to have more information in the sector.

: Leading with analog and embedded semiconductors, Texas instruments products can be found across various applications from automotive to industrial automation. TI has established various manufacturing centres, Research & Design centres to tap into India’s large workforce and talent pool.

Challenges in the vertical

- Very high start-up costs act as a deterrent to many people from setting up semiconductor fabrication plants. Similarly, Fabs require dedicated infrastructure such as ultrapure water, uninterrupted power supply, and refined waste management systems which may be difficult to procure at times.

- Another key issue facing Indian market is cutthroat competition. Countries like Taiwan, South Korea and the US have matured semiconductors industries with economies of scale and advanced technology. As per the Market Study For Semi Conductor Business In India, India has to offer globally competitive manufacturing costs to attract players from across the world towards its shores.

- Lack of a strong domestic supply chain for essential materials such as high purity silicon and specialty chemicals in India drives up the cost of manufacturing. The country imports most of the advanced semiconductor manufacturing equipment it needs.

- Recruiting and retaining experienced engineers is an issue faced by all semiconductor companies. Often, industry confronts a gap between available talent pool and specific skills required in advanced semiconductor technologies.

- The effectiveness of government incentives needs to be continuously evaluated and refined. The process of obtaining permits and approvals for setting up semiconductor facilities can be time-consuming. Also, Market Research And Feasibility Service For Electronics Industry can help in gaining insights.

How The India Watch can Help

The India Watch is an India centric market research and feasibility study advisory. If you are a business owner, investor, or a start-up looking to enter or expand in the Semi-Conductor value chain, we can assist with detailed feasibility reports, custom-made market research, and actionable market intelligence to help you make informed business decisions. Our range of services includes but are not limited to the following

- Market scanning and intelligence gathering

- Feasibility Report For Semi Conductor Business and project report

- B2B style qualitative interviews and studies

- Tailor made intelligence on target customer groups, competition, industry insights, value chain, distribution structure, etc.

- Techno feasibility study

Raed Also- India’s EV Sector 2030: Plenty of Opportunities Abound for Indigenous Manufacturers

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