India’s Chip Components Market to Reach $300 Billion During 2021-2026, Says IESA & Counterpoint Research

In a joint research by the India Electronics & Semiconductor Affiliation (IESA) and Counterpoint Analysis, it was discovered that the cumulative income of India’s semiconductor part market will attain $300 billion between 2021 and 2026.

As per the report, titled ‘India Semiconductor Market Report, 2019-2026’, the nation is on observe to turn out to be the world’s second-largest market when it comes to scale and rising demand for semiconductor parts throughout quite a lot of industries and purposes.

The analysis focuses on the bottom-up modelling unit in addition to income demand for semiconductor parts masking all the Invoice of Supplies (BoM) of a number of end-device and gear classes throughout seven main sectors in India from each home and export views.

The sectors talked about on this case embrace Cellular and Wearables, Info Expertise, Automotive, Industrial, Telecom, Aerospace and Protection, and Shopper Electronics.

The report additionally consists of detailed suggestions, potential insurance policies, and a framework for creating a powerful home semiconductor ecosystem to be able to increase home manufacturing and sourcing.

What information reveals

As per the information highlighted on this report, about 80% of complete semiconductor part revenues come from IT (20%), industrial (9%), in addition to cellular and wearables (51%).

Other than these, client electronics account for 7% of the revenues, adopted by telecon (5%), automotive (5%), and aerospace & defence (3%).

The report additionally famous that whereas the nation is changing into one of many largest shoppers of digital and semiconductor components, nearly all of parts are imported, offering the nation with restricted financial alternatives.

The info confirmed that solely 9% of this semiconductor requirement is presently met regionally.

Nevertheless, the report additional said: “Authorities’s imaginative and prescient beneath ‘Make in India’, ‘Atmanirbhar Bharat’, and ‘PLI scheme’ together with its fixed pursuit in direction of reviving the infrastructure by means of the adoption of digital expertise will increase native manufacturing of semiconductor parts.”

The researchers expect that when it comes to regionally sourced semiconductor parts by segments, within the cellular & wearable part, the proportion was 4% in 2021 however it’s anticipated to be 9% by 2026. Equally, the report identified a major leap in all of the sections.

IESA CEO and president Ok Krishna Moorthy mentioned, “Earlier than the tip of this decade, there shall be nothing that won’t be touched by electronics and the ever-present ‘chip’. Be it preventing carbon emissions, renewable power, meals security, or healthcare, the semiconductor chip shall be all-pervasive. Think about this – all kids throughout India get educated in digital school rooms by the nation’s finest lecturers. The chip makes it potential.”

Moreover, analysis director at Counterpoint Analysis Tarun Pathak mentioned that with the gradual transition from function telephones to smartphones, the proportions of superior logic processors, reminiscence, built-in controllers, sensors, and different parts have elevated.

In keeping with him: “This can proceed to drive the worth of the semiconductor content material in smartphones, which continues to be an under-penetrated phase in India, aided by the rise of wearables reminiscent of smartwatch and TWS.”

India’s semiconductor future

The analysis report famous that when it comes to income, India’s finish gear market was price $119 billion in 2021, and, from 2021 to 2026, it’s anticipated to develop at a 19% CAGR.

From part sourcing to design manufacturing, India’s Digital System Design and Manufacturing (ESDM) sector is predicted to play a major function within the nation’s general development, in response to the researchers.

Moreover, the report mentioned that the Indian semiconductor business is poised for fast enlargement within the coming years, aiding India’s financial system in reaching the following stage when it comes to each home consumption and exports.

It additionally famous that whereas native manufacturing is presently low, India has huge potential to turn out to be a number one semiconductor part provider within the coming years if expertise and assets are correctly utilised.

The research additionally highlighted that if there is a rise in native manufacturing and sourcing of semiconductor parts, “the semiconductor market is usually a main contributor to financial development, and India’s push to turn out to be a $5-trillion financial system”.

Relating to the newest report, Eswara Rao Nandam, president & director of Polymatech Electronics Non-public Restricted advised News18 that $300 Billion is estimated as per present utilization however in response to him it could cross that mark.

Equally, Sanjay Gupta, India vp and managing director at NXP Semiconductors, believes that with the growing give attention to digitalisation, the demand for semiconductors is sure to develop multi-fold.

However there are considerations concerning India’s imaginative and prescient to turn out to be a global semiconductor hub—particularly when it is going to be up towards the chip giants, China and Taiwan.

On this case, whereas citing Prime Minister Narendra Modi’s Independence Day speech concerning the nation’s ‘techade’ imaginative and prescient to turn out to be a world manufacturing hub, Gupta mentioned: “It’s evident that the Indian semiconductor business is within the nascent stage nevertheless the efforts to turn out to be a world manufacturing hub is kind of seen with the federal government’s flagship imaginative and prescient reminiscent of ‘Digital India’ and the ‘Make in India’ programme. With such rigorous efforts and give attention to ability growth, infrastructure, and many others, the day shouldn’t be far-off that the nation will witness a paradigm shift from being a ‘chip taker to a chip maker’.”

As per Nandam, Polymatech believes that India shall be within the “driver’s seat” within the semiconductor business by 2035.

He additionally highlighted the truth that the central and state governments’ sturdy dedication and help shall be important.

The business chief mentioned: “Polymatech (significantly) will produce fab newest by 2024 in levels of backward integration.”

Whereas explaining additional he mentioned that conventional fab manufacturing, which makes use of numerous water, may very well be discouraged as this takes up numerous area, pollutes numerous water, and depletes numerous pure assets.

Nandam mentioned: “Polymatech is adopting newest expertise like dicing with plasma/laser which requires very minimal to zero quantity of water and in addition adopting Business 4.0 theme for the best high quality of merchandise.”

He additionally mentioned {that a} correct and speedy subsidy disbursal mechanism at smaller intervals will entice promoters to speculate on this enterprise. In keeping with him: “Itemizing of semiconductor firms will be on a quick observe may assist the business to develop sooner because it wants enormous Capex.”

Lastly, Nandam advised that India wants to ask semicon equipment producers as a result of in response to him there are few firms producing these machines and the lead time is roughly 180 -270 days plus crusing time.

News18 additionally reached out to Vivek Tyagi, who’s the chairman of IESA. Whereas citing considerations associated to the geopolitical state of affairs in East Asia, he mentioned that chip manufacturing capability could also be strained sooner or later.

“Apropos, it’s a pure consequence that entities concerned within the uncooked supplies and corresponding provide chains are prone to transfer to places, which supply higher services and insurance policies,” he mentioned.

So Tyagi believes that self-sufficiency and indigenous semiconductor manufacturing are important necessities in gentle of this disaster, and the Indian authorities is working to fulfill them.

Moreover, he mentioned: “Whereas within the current disposition, there are a handful of nations having the capacities to arrange new semiconductor fabs, varied insurance policies providing production-linked incentives, design-linked incentives, establishing of Indian Semiconductor Mission, reorganisation of SCL, the promulgation of state insurance policies, and many others, will accrue semiconductor manufacturing along with design. The establishing of Fab services is capital intensive and complicated. A strong R&D together with an emphasis on ability growth would be the cornerstones of this endeavour. It’s a daunting job forward however it’s a work in progress.”

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