India Semiconductor Market Research Report Forecast: (2025-2030)

Market Definition

The semiconductor is a material that possesses a conductivity between a conductor and an insulator. Such materials, mostly silicon, are used in electronics to control electrical flow in devices such as chips and transistors.

Market Insights & Analysis: India Semiconductor Market (2025-30):

India Semiconductor Market size was valued at around USD 38 billion in 2024 and is projected to reach USD 105 billion by 2030. Along with this, the market is estimated to grow at a CAGR of around 18% during the forecast period, i.e., 2025-30. The India Semiconductor Market is often perceived to be on an unprecedented growth path, charged with government initiatives, technological acceleration, and growth from various sectors. The government's PLI Scheme, pressed into existence for the promotion of local manufacturing of semiconductors, has been a major impetus. This initiative aims to reduce India's dependence on semiconductor imports, with the government committing substantial financial support to attract investments in fabrication plants and R&D.

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In February 2024, the Government of India approved a proposal from Tata Electronics to build a mega semiconductor fabrication facility in Dholera, Gujarat, with PSMC. Construction of the fab shall commence later this year with an investment totaling up to USD 11 billion. Additionally, the rising middle class in India with its growing number of affordable smartphones, smart devices, and consumer electronics is driving semiconductor consumption. Besides that, the growth in electric vehicles is a conspicuous trend as India's EV market is expected to grow at over 50% CAGR by 2030. This implies soaring demand for EV batteries and semiconductor components involved in managing power systems, charging infrastructure, and vehicle automation. The expansion of edge computing and 5G infrastructure has thus greatly enhanced the demand for advanced semiconductor technologies. The demand for high-performance chips, increased by 5G, is likely to enhance seamless connectivity, enable reduced latency, and enhance faster data processing, which is beneficial for the Indian Semiconductor Industry. Moreover, as AI and machine learning technologies gain traction in healthcare and automotive applications, suppliers of semiconductor solutions will see huge market opportunities.

The other fastest-rising trend is the partnership with an established international leader in semiconductors to channel investment, expertise, and cutting-edge technology into India's notional semiconductor ecosystem. The community of several companies in semiconductor design and innovation is facing competition. For instance, SiFive and Western Digital are building custom processors on the RISC-V model for many sectors, including embedded systems, AI, and data storage. This ecosystem transformation allows India to become a global semiconductor industry player.

India Semiconductor Market Driver:

Rapid Digitization & Increase in Consumer Electronics Demand – The growth of the Indian semiconductor sector is mainly driven by the rising demand for digitization with the increased consumption of electronics products. As India’s economy has become more digitally advanced, the use of smartphones, smart home appliances, and other electronic devices has increased quickly. India currently holds the second-largest smartphone market globally with the projected one billion smartphones by 2026. Growing internet usage among the middle class and the shift towards e-services are further driving the demand for consumer electronics. In 2024 India’s internet penetration rate increased by nearly fifty percent over the previous ten years. In addition, the Indian consumer electronics market is expected to grow at a rate of 6 to 8 percent over the next five years from its estimated USD 73 billion in 2022. These devices can't function without semiconductors because semiconductors are the chips that allow the smooth functioning of several vital components of these devices. As a result, this increase in demand for semiconductors is augmenting the size & volume of the Indian semiconductor sector.

India Semiconductor Market Growth Opportunity:

Expansion of Semiconductor Ecosystem in Tier-II and Tier-III Cities – As the semiconductor ecosystem in Tier-II and Tier-III cities grows, the Indian semiconductor industry has a significant opportunity for expansion. Cities such as Hyderabad, Bangalore, and Pune have become key hubs for semiconductor design and research due to the government's recent emphasis on decentralizing the sector. The PLI program has motivated semiconductor companies to set up their research and manufacturing facilities in these areas. For instance, to maintain a more balanced industry presence, the Vedanta Group has teamed up with Foxconn to build a semiconductor plant while continuing to concentrate on smaller cities. As a result, government incentives are significantly drawing semiconductor companies to Tier-II and Tier-III cities. The Indian government is concentrating on creating technology parks and backing startups in these areas, which will draw in more investment. According to the proposals submitted by various State Governments, the Software Technology Parks of India (STPI) has set up 63 STPI centers throughout the nation. In addition, the Government of India also approved 22 new STPI centers across the country. By 2025, from these initiatives, India's semiconductor ecosystem is expected to flourish in emerging cities.

India Semiconductor Market Challenge:

High Capital Investment Required for Semiconductor Fabrication Facilities – The absence of an extended-term plan for huge capital expenses in semiconductor production centers is a major challenge in the India Semiconductor Market. The cost of manufacturing this semiconductor can cost USD 10 to 20 billion or even more depending on their size and generation. This is mostly due to the technology’s complexity which drives up production costs by requiring expensive equipment and a cleanroom. In India, only a few players, such as Vedanta-Foxconn and ISMC, have begun the groundwork for setting up the fabs, with manufacturing expected to start by 2025. Also, there is a dearth of deep domestic experience to allow for the fabrication of semiconductors, leading to a reliance on foreign technology and partnerships that further escalate costs.

India Semiconductor Market Trend:

Shift Toward Advanced Node Semiconductor Technologies – In the India Semiconductor Market, advanced node semiconductor technologies such as 7nm and 5nm nodes are becoming more common. These smaller nodes allow more transistors to be packed onto a chip increasing performance, lowering power consumption, and improving efficiency. Leading manufacturers of semiconductors worldwide such as; Samsung and TSMC are already setting the standard for 5nm chips and India is slowly following suit. Businesses such as Qualcomm and Intel are concentrating on creating chips with 5nm or smaller nodes, especially for high-performance uses like 5G AI and the Internet of Things. The India Semiconductor Mission supports the establishment of advanced semiconductor fabs capable of producing smaller node chips. India’s semiconductor ecosystem is aligning itself with global technological advancements, as demonstrated by the plans of companies like ISMC and Vedanta to incorporate advanced technologies into their upcoming fabs, which are expected to manufacture chips as small as 7nm.

India Semiconductor Market (2025-30): Segmentation Analysis

The India Semiconductor Market study of MarkNtel Advisors evaluates & highlights the major trends and influencing factors in each segment. It includes predictions for the period 2025–2030 at the national level. Based on the analysis, the market has been further classified as:

Based on Application:

• Networking & Communications
• Data Processing
• Industrial
• Consumer Electronics
• Automotive
• Government

Consumer electronics are the biggest segment based on application accounting for about 45% market share in the India Semiconductor Market. This leading segment is the result of increasing sales of smartphones, laptops, tablets, wearables, and other smart devices. Increases in the ICE market are induced by a large and growing middle-class population and rising Internet penetration, which led to a jump in consumer electronics consumption. In 2023, the Indian smartphone market consumed above 140 million devices, and each of these smartphones requires advanced semiconductor components governing processing, connectivity, and power management. Apart from that, growth in the smart home market and the market for wearables further fuel the demand for semiconductors. Companies like Samsung, Xiaomi, and Apple are investing vastly in local assembly and manufacturing, multiplying the demand for semiconductors in India. As the adoption of technology continues, this sector will keep driving semiconductor consumption.

Based on Equipment:

• Front-end Equipment
• Back-end Equipment

Among the components of the India Semiconductor Market, the front-end equipment category contributes around 65% to the overall market volume. Front-end equipment is employed in the initial stages of semiconductor fabrication in wafer cleaning, etching, deposition, and lithography processes. This equipment is imperative before subjecting the semiconductor wafer to back-end processing, as the semiconductor wafer must be shaped. As global technological development processes shifted toward smaller nodes, demand for sophisticated front-end equipment increased. Leading companies in the sector include Applied Materials and ASML which supply the cutting-edge machinery needed to produce semiconductors. In India, the build-up of local Indian semiconductor Fabs is supported by policy, the Vedanta-Foxconn project. This is increasing the demand for front-end equipment to establish fabrication capabilities, positioning the segment as the predominant force in India's semiconductor ecosystem.

India Semiconductor Industry Recent Development:

• May 2024: Tata Electronics started exporting semiconductor chip samples from its Bengaluru R&D center to partners in Japan, the US, and Europe. This marks a significant step as the company plans further expansion in India’s semiconductor sector.
• February 2024: HCL Technologies is expanding its collaboration with Intel Foundry to co-develop customized silicon solutions, aiming to enhance semiconductor services for manufacturers, OEMs, and cloud providers, fostering a diversified supply chain and innovation.

Gain a Competitive Edge with Our India Semiconductor Market Report

1. India Semiconductor Market Report by MarkNtel Advisors provides a detailed & thorough analysis of market size & market share, growth rate, competitive landscape, and key players. This comprehensive analysis helps businesses gain a holistic understanding of market dynamics & make informed decisions.
2. This report also highlights current market trends & future projections, allowing businesses to identify emerging opportunities & potential challenges. By understanding market forecasts, companies can align their strategies & stay ahead of the competition.
3. India Semiconductor Market Report aids in assessing & mitigating risks associated with entering or operating in the market. By understanding market dynamics with the help of surveys, regulatory frameworks, and potential challenges, businesses can develop strategies to minimize risks & optimize their operations.

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