The Indian semiconductor industry has grown to include all aspects of the fabrication cycle. With demands expected to exceed $400 billion for electronic equipment in India, as well as new equipment in mature Western markets, the industry appears to be ready for explosive growth.
The current semiconductor consumer segments have involved IT applications, consumer electronics, and communications equipment. As new technologies emerge, new opportunities evolve for the industry. Everything from biotechnology to remote sensing offers the potential for an increased need of high-quality semiconductors.
In terms of consumption, the Indian semiconductor and electronics market is one of the largest in the world.
The Indian semiconductor industry focuses primarily on design and testing. The actual manufacturing and refinement processes for the global industry are generally concentrated in the United States.
Important Indian Semiconductor Industry Statistics
#1. By 2020, the semiconductor industry in India is expected to achieve a total value of $52.58 billion. If that occurs, it will represent a CAGR of 29.4% from 2015 figures. That would make it one of the fastest growing segments of the global industry if achieved. (India Brand Equity Foundation)
#2. More than 2,000 chips are being designed each year by the Indian semiconductor industry. There are more than 20,000 engineers who are employed in various areas of chip design and verification. (India Brand Equity Foundation)
#3. In 2012, the consumption of semiconductors in India reached $8 billion, which was a 7.4%Q increase from 2011, the last year that official figures were released. (India Brand Equity Foundation)
#4. From 2009-2012, the market contribution of India to the global semiconductor market increased from 2.2% to 2.7%. That still puts the industry far behind competitors like Japan, South Korea, or China. (Boson Technol Systems Pvt Ltd)
#5. The semiconductor industry in India employs about 70,000 engineers in total in various areas. Indirect employment opportunities, when all electronics are considered, may top 400,000. (Boson Technol Systems Pvt Ltd)
#6. Total production of hardware goods within the industry is expected to reach $104 billion by 2020. (India Brand Equity Foundation)
#7. Up to 70% of the domestic market for semiconductors in India, as of 2015, still relies on imports to meet the levels of demand that are present. The total value of the ESDM market is more than $90 billion. (The Hindu Business Line)
#8. Five high-priority segments account for about 60% of the semiconductor and electronics consumption of the industry. Mobile phones are the largest of these segments, accounting for almost 40% of consumer activity. (Frost and Sullivan)
#9. The Indian semiconductor industry contributes about 1.7% to the nation’s GDP with its activities, as of May 2016. In comparison to other semiconductor producers in the region, that is quite small. Semiconductors are responsible for 15.5% of the GDP in Taiwan, 15% in South Korea, and almost 13% in China. (NITI Aayog)
#10. The global market for the semiconductor industry has a total value of $2 trillion. The largest global segment for the industry is computer systems and peripherals, which is over 26% of the overall market. (NITI Aayog)
#11. The Indian semiconductor industry is currently responsible for about 1.5% of world electronic hardware production. (NITI Aayog)
#12. Communication and broadcast equipment are the largest segment of the Indian industry, accounting for a 29% market share. Close behind is the consumer electronics category, with a 28% share. (NITI Aayog)
#13. Sales of semiconductors globally were strong outside of the Asia-Pacific region. The Americas market was particularly strong from the semiconductor industry. An increase of almost 40% was achieved. Europe achieved 21.7% percent growth, while China achieved 16.4% growth. (Semiconductor Industry Association)
#14. Sales in the Asia-Pacific region were also strong, rising 16.2% outside of Japan and China. (Semiconductor Industry Association)
#15. In the past two years, the Indian semiconductor industry registered more than 600 startups that are focused on the Internet-of-things hardware category. (Times of India)
#16. Cosmic Circuits, which was acquired by Cadence Design Systems in 2013, had over 300 IPs that helped the semiconductor industry begin to grow. (Times of India)
#17. Several large acquisitions occurred within the industry from 2014-2017. Qualcomm purchased NXP Semiconductors for $47 billion. Cypress Semiconductors acquired Broadcom’s IOT business for $32 billion. Analog Devices purchased Linear Technologies for $14.8 billion. (Times of India)
#18. The overall demand for semiconductors in India is listed with an official value of $10 billion. (Ministry of Electronics Information and Technology)
#19. The average salary of a semiconductor engineer, designer, or tester in India is R683,000, which is the equivalent to about $10,000. (Glassdoor)
Indian Semiconductor Industry Trends and Analysis
There are many segments that could drive this market forward in the coming years. LED lighting applications may be the top driver, as the demand for mobile products, broadband equipment, and communication tools is increasing dramatically, especially within the Asia-Pacific region. As more households in Asia and the Pacific achieve Middle Class socioeconomic status, the desire to own modern electronics equipment will be high.
That means the growth within the Indian semiconductor industry, despite its high forecast CAGR of nearly 30%, could still over-perform.
A drive for high-speed internet access and broadband integration will push the industry forward as well.
What may hold the industry back from achieving its full potential is duplication. There are several different companies, despite the ongoing mergers and acquisition process, that are doing similar things. That means they create very little differentiation between their products. The only way to achieve a market share within the industry is to undercut the price, which creates a race to the bottom in terms of quality, profitability, and talent.
Additional opportunities in automation, artificial intelligence, and miniaturization will also likely keep the industry growing.
The global market for semiconductors continues to perform strongly, though mature markets are seeing reductions in growth as more consumers are keeping their devices longer. That means the focus of the Indian semiconductor industry must be on the domestic market. Look for products that specifically target consumers in India to intensify growth prospects in coming years.