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The demand for semiconductors, the backbone of everything from mobile phones to cars, industrial automation to defence equipment, is surging in India. By 2030, India’s chip demand is expected to touch $117 billion, growing at ~15% CAGR, at almost twice the global pace, and constituting about 12% of global demand. In a world where ~75% of manufacturing capacity is in China, Taiwan, South Korea and Japan, India remains significantly dependent on chip imports.
India has shown how a concerted policy push can change the map. Make-in-India and the PLI schemes have resulted in over 99% of smartphones being sold in India today being made in India as well, an impressive jump from just 26% in 2014-15. Over the last few years, India has been looking to replicate this success in semiconductors, reduce its dependence on chip imports and create a resilient supply chain for semiconductors in India.
The India Semiconductor Mission has done well to attract strong participation from both domestic and global players like PSMC, Micron, TATA, Foxconn, HCL, CG Power and Kaynes, amongst others. All the 10 approved projects, with an investment commitment of over $18 billion, cater to different and, more importantly, strategically chosen manufacturing segments for India.
For instance, TATA’s fab will focus on the 28-90nm mature node segment. Mature nodes constitute more than half of India’s silicon consumption today and are critical for large domestic sectors like automotive, telecommunications, industrial and IT. These 28-90nm chips can be deployed in applications such as smart meters, smart cards used in government IDs, radars and avionics in defence industry, remote radio units in 5G towers, signaling equipment for railways, amongst others. Likewise, the SICSem project will focus on niche silicon carbide chips which are rapidly replacing silicon chips in high-voltage and high-power applications for EVs, solar inverters, drones, and others. This niche market is growing at 20-24% CAGR, nearly three to four times faster than the global silicon market growth, a segment where India can have a global leadership play. Similarly, the various OSAT projects approved under ISM will serve very different needs for the India market. The Foxconn-HCL OSAT plant will produce display driver chips – a key input to the display module assemblers setting up shop in India via.
