India aims to move beyond chip design as global semiconductor industry doubles by 2030: Equirus
New Delhi, July 4
India is moving beyond its long-standing role as a global chip design hub and beginning to build domestic semiconductor manufacturing capabilities, as the artificial intelligence boom and a global reordering of semiconductor supply chains create new opportunities for the country, according to an Equirus Securities thematic report.
The report said India, which has spent decades designing chips for global companies while importing almost every chip it consumed, is now entering "the next chapter" by building capabilities across fabrication, packaging and testing.
"For two decades India's place in semiconductors has been defined by design... This note is about the next chapter, the move from design talent toward full stack capability as India begins to fabricate, package and test chips on home soil," the report said.
According to the report, the global semiconductor market is expected to grow from about USD 775 billion to USD 1.6 trillion by 2030, driven by AI, electrification and digital infrastructure. It said the changing geopolitical landscape has positioned India as a trusted manufacturing partner.
"A global chip market on course to grow from about US$ 775bn to US$ 1.6tn by CY30 is being rewired by a geopolitical reordering of where chips are made, and India has emerged as a trusted partner," it said.
The brokerage said India's semiconductor strategy now extends across the value chain through the India Semiconductor Mission (ISM), support for packaging and component manufacturing, and incentives for chip design and skilling. It noted that projects worth more than USD 21 billion have already been approved, including Micron's Sanand ATMP facility, Kaynes Semicon's OSAT unit and the Tata-PSMC fabrication plant at Dholera.
Rather than competing immediately in leading-edge chips, India is focusing on 28-110 nanometre technologies and semiconductor packaging, where the country has stronger commercial advantages. The report said India has around three lakh chip designers, roughly one-fifth of the global semiconductor design workforce, while domestic chip consumption is expected to more than double to about USD 155 billion by 2031.
"India is building where its advantages are real," the report said.
However, the report cautioned that the journey will take time. It said India still imports more than 90 per cent of its semiconductor equipment and most speciality chemicals and gases, while advanced manufacturing below 7nm remains absent.
"The constraints are real and the horizon is long," the report said, adding that "the binding risk is execution rather than strategy" as India remains in "roughly year five of a twenty year build."
— ANI
Reader Comments
I'm cautiously optimistic. The $21 billion in projects is impressive, but 90% import dependency on equipment is a huge challenge. We need to build the entire ecosystem, not just the fabs. Otherwise we'll just be assembling imported components.
As someone working in the semiconductor industry in the US, this is a smart strategy. India has the engineering talent base. Starting at 28nm makes business sense - there's huge demand for automotive and industrial chips at those nodes. The 20-year horizon is realistic though.
Good article but missing one critical point: water and power. Semiconductor fabs need massive amounts of both. The Dholera plant will require 24x7 power supply and ultra-pure water. Is Gujarat ready for that? These are not trivial infrastructure issues.
I work for a European chip equipment manufacturer. India's biggest challenge will be building the chemical supply chain. Most specialty gases and chemicals come from Japan, Korea, and Europe. They need to invest in that too, not just the fabs.
Let's be realistic: we have 300,000 chip designers. But how many of them will move back from Bangalore and Hyderabad to work in a fab in Dholera or Sanand? Talent relocation and retention is going to be a bigger issue than people think. Need to build good housing and schools near these fabs first!
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