India's Semiconductor Component Market Revenue To Grow To $300 Billion During 2021-2026: Report
India’s semiconductor component market will see its cumulative revenues climb to $300 billion during 2021-2026 as the government's Production Linked Incentive (PLI) and 'Make in India' schemes will help domestic-sourcing of semiconductor components in the coming years.
According to a a joint research by the India Electronics and Semiconductor Association (IESA) and Counterpoint Research, mobile and wearables, information technology (IT) and industrial segments contribute around 80 per cent of the semiconductor revenues in India in 2021.
India is poised to be the second largest market in the world from the perspective of scale and growing demand for semiconductor components across several industries and applications, according to the report.
"This demand is being pushed by the increasing pace of digital transformation among the country’s consumers, enterprises and public sector through the adoption of new technologies, from advanced connectivity to content consumption to the cloud. These cover smartphones, PCs, wearables, cloud data centers, Industry 4.0 applications, IoT, smart mobility, and advanced telecom and public utility infrastructure," the report added.
The telecom sector with the advent of 5G and fiber network rollout will be a key catalyst in boosting the semiconductor components consumption, the report noted.
"This consumption will not only come from the advanced semiconductor-heavy 5G and FTTH network infrastructure equipment, which will contribute to more than 14 per cent of the total semiconductor consumption in 2026, but also from the highly capable AI-driven 5G endpoints, from smartphones, tablets, PCs, connected cars, industrial robotics to private networks," said Counterpoint Research Vice President Neil Shah.
In 2021, India’s end equipment market stood at $119 billion in terms of revenue, and it is expected to grow at a CAGR of 19 per cent from 2021 to 2026, the report said.
The Electronic System Design and Manufacturing (ESDM) sector in India will play a major role in the country’s overall growth, from sourcing components to design manufacturing, it said.
The semiconductor industry in India, according to the report, is on a path to immense growth over the next few years to help India’s economy reach the next stage for both domestic consumption and exports.
While the country is becoming one of the largest consumers of electronic and semiconductor components, most components are imported, offering limited economic opportunities for the country.
Currently, only 9 per cent of this semiconductor requirement is met locally, the report noted.
"While the local production is currently low, India has immense potential to become a leading semiconductor component supplier in the coming years, provided the talent pool and resources are utilized correctly. The government’s initiatives, from ‘Make in India’ to Production Linked Incentive (PLI), will help accelerate this journey but will need some additional reforms to increase local manufacturing and sourcing of semiconductor components," the report said.
Government's vision under 'Make in India', 'Aatmanirbhar Bharat' and 'PLI scheme' along with its constant pursuit towards reviving the infrastructure through the adoption of digital technology will boost local manufacturing of semiconductors components, it added.
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