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Indian semiconductor component market to hit $300bn by 2026

India’s semiconductor component market will see cumulative revenues climb to $300bn by 2026, amid growing demand for mobile devices and industrial products

India’s semiconductor component market is expected to grow to $300bn by 2026, driven by the growing local and global demand for semiconductors used in mobile devices, wearables, electric vehicles and industrial products such as robots, a study has found.

According to the India semiconductor market report, 2019-2026, published by the India Electronics and Semiconductor Association (IESA) and Counterpoint Research, mobile and wearables, IT, and industrial sectors contributed almost 80% of semiconductor revenues in India last year.

Tarun Pathak, research director at Counterpoint Research, said the shift from feature phones to smartphones, for example, has been fuelling demand for advanced logic processors, memory, integrated controllers, sensors and other components.

“This will continue to drive the value of the semiconductor content in smartphones, which is still an under-penetrated segment in India,” he said.

Although India is one of the largest consumers of electronic and semiconductor components, most components are still imported, offering limited economic opportunities for the country. For now, just 9% of India’s semiconductor requirements are met locally.

However, India has “immense potential” to become a leading semiconductor component supplier in the coming years, the report noted, provided the country’s talent pool and resources are tapped correctly.

The Indian government has been spurring semiconductor manufacturing through production-linked incentives and other schemes to promote the domestic manufacturing of electronic components and semiconductors.

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In its last budget, the government had also increased funding for the Make in India and Digital India initiatives to $936.2m, further incentivising manufacturing and investments in the sector to support job creation, import reduction and export promotion.

“India is becoming a tech-centred growth story, with advancing technologies and innovation being integral to democratising access,” said IESA vice-president Sunil Acharya.

“The semiconductor study will play a major role in India’s growth,” he added. “A large young population combined with an increased focus on digitisation, advancing skill levels, growing manufacturing and foreign investment traction will take India’s semiconductor industry to the next level in the coming years.”

Some industry analysts have noted that despite factors favouring Indian manufacturing, complicated laws, bureaucracy and poor intellectual property (IP) protection could deter companies from setting up manufacturing bases in the country.

Muzammil Hassan, head of IP licensing and commercialisation at technology research firm GreyB, told Computer Weekly last year: “When companies come to India, they are bringing their technology and looking to develop future tech in India. Nobody wants to spend billions developing a technology and then waiting in line for years to enforce their patent rights.”

He said that for India to become a manufacturing powerhouse, it will need an effective IP protection regime to instil confidence in the manufacturing ecosystem.

“Companies need to know that their ideas and technology are protected – and if the need arises, they will get the due damages, too,” said Hassan.

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