Decoding The Semiconductor Industry In India

Semiconductors are the backbone of almost all major technological advancements today. From powering our smartphones to fighter and air force jets, semiconductors can be considered one of the most useful inventions of the modern world.
 

More than 100 billion semiconductors are used across the globe daily, making them crucial to the global economy. In addition to this, its applications in the field of AI are well documented, further highlighting its indispensable role in driving technological progress and economic growth.
 

In this blog, we will be decoding the semiconductor industry in India and understand what makes semiconductors so sought-after and how India is looking to fulfil its semiconductor needs. 

• India is positioning itself as a semiconductor hub through government initiatives and major investments from companies like Tata and Vedanta.
• Leading firms like SPEL, Moschips, and Dixon are advancing semiconductor design and manufacturing in India.
• The Indian semiconductor market is projected to reach USD 100.2 billion by 2032, growing at a 20.1% CAGR.

Semiconductors, also known as microchips or integrated circuits (ICs), can undertake two processes simultaneously. The first is to conduct electricity between two materials while simultaneously providing insulation between two other materials.

Hence, a semiconductor possesses both the properties of an insulator and a conductor. Due to this quality, semiconductors are crucial in the development of various electronic gadgets that need the flow of electricity to be controlled. Semiconductors are widely used in all modern devices, including computers, laptops, medical instruments, mobile phones, automobiles, smartwatches, and much more.
 

Semiconductors are made using raw materials like germanium, silicon, arsenide, gallium, etc., and optimise all our devices by making them more efficient, faster, and cheaper. They also find a wide application in household appliances like air conditioners, washing machines, fridges, LED bulbs, and microwaves.

Given this wide variety of use cases, semiconductors form the very foundation of the technological advancement of the modern world. Understanding and decoding the semiconductor industry in India is crucial for the progress of the nation. 

In the semiconductor industry, there are primarily two types of businesses: a fable firm that solely concentrates on the design of semiconductors and others that concentrate on producing semiconductors, referred to as foundries.
 

Now, let's take a look at some of the leading Indian semiconductor companies that are listed on stock exchanges.
 

SPEL Semiconductors

This company provides integrated circuits for electronic devices such as computers and cell phones. It also runs the first and only semiconductor assembly and test facility in the country, known as ‘Natronix’.
 

Moschips Technologies

This semiconductor design company primarily focuses on the Internet of Things, mixed-signal IPs, and turn-key ASIC solutions. For its clients worldwide, Moschip provides semiconductor solutions.
 

Ruttonsha International

The corporation that currently owns this business is American. Ruttonsha International deals with manufacturing semiconductor devices, diodes, and power rectifier assemblies.
 

Tata Elxsi

The company moved into the semiconductor manufacturing space in 2021 with an investment of $300 million and is involved in the manufacturing of AI tools and providing design solutions and frameworks.
 

Dixon Technologies

Dixon Technologies is the biggest manufacturer of LED TV screens in the Indian subcontinent and has worked with global brands like OnePlus, Havells, Philips, Panasonic, etc. They have also entered the space of manufacturing computers, laptops, mobile phones, and other ICT hardware that heavily rely on semiconductor chips.
 

Vedanta Group

The Vedanta Group of India has also come up with a plan to invest in the semiconductor chip industry with an investment amount of $15 billion, which will be deployed over the next 5 to 10 years. 

In December of 2021, the Indian Government announced and launched the India Semiconductor Mission to give a boost to the semiconductor industry and make the country self-reliant in the semiconductor space. Incentives worth Rs. 76,000 crore were announced for companies to promote India as a global hub for semiconductor manufacturing.
 

The government also received proposals from many companies that were worth Rs. 1.53 lakh crore that aims to put India on the global map for manufacturing semiconductor chips.
 

As per various surveys and studies, this industry is expected to grow at a compounded annual growth rate of 19%. The interim budget of 2024 also allocated an additional Rs. 6,903 crore to further boost this sector.
 

Some notable partnerships for chip manufacturing facilities include:

• Rs. 7,600 crore chip packaging facility in partnership between CG Power and  Renesas Electronics from Japan in Sanand, Gujarat.
• Rs. 27,000 crore assembly plant for semiconductor chips announced by TATA Group in Morigaon, Assam.
• Rs. 91,000 crore manufacturing plant in partnership between Tata Electronics and Taiwan-based Powerchip in Dholera Gujarat.
• Rs. 275 crore packaging plant announced by America-based Micron Technology in Gujarat.

The above developments also highlight the intention of global economies to move away from China and consider other options as an alternative.
 

India is capitalising on this global shift by providing companies with lucrative PLI schemes, skilled workforce development, R&D support, and infrastructure development to make India a more attractive destination for semiconductor investments.