India's semiconductor market is projected to exceed $100 billion in revenue by 2030, fueled by government initiatives such as the production-linked incentive (PLI) scheme and strong demand for developing digital infrastructure across various sectors, according to a report.

Mobile handset, IT, and telecom segments are leading the semiconductor industry, contributing more than 75 percent of its revenues, according to a report by the India Electronics and Semiconductor Association (IESA) and Counterpoint Research. The government’s $9.1 billion ‘Semicon India’ program aims to boost semiconductor manufacturing and workforce development, driving innovation and growth in India’s tech ecosystem.

“India has created one of the largest smart populations in the world, powered by semiconductors operating in the background. Semiconductors have a profound commercial, strategic, and social impact”, said Ved Prakash Mall, Director, IESA.

Semiconductors play a crucial role in sectors such as electronics manufacturing, digital transformation, defense, aerospace, renewable energy, IoT, healthcare, automotive, and research. India’s semiconductor market was valued at $45 billion in 2023 and is projected to rapidly grow at a CAGR of 13 percent to surpass $100 billion by 2030.

Tarun Pathak, Research Director at Counterpoint Research, said that the handset sector is the leading force in India’s semiconductor industry, playing a crucial role in the country’s digital transformation as more consumers transition from feature phones to smartphones.

“This growth is driven by the increased use of social media, OTT platforms, affordable prices, accessible data, and the expansion of the 5G network. At the same time, India’s IT sector is thriving, supported by pandemic-driven digitalization and government initiatives like ‘Digital India’ and ‘Make in India’”, he mentioned.

Union Minister for Electronics and IT, Ashwini Vaishnaw, said this month that India is moving towards becoming the next semiconductor hub for the world as big investment is happening in this sector in the country.

India's semiconductor manufacturing sector has attracted over Rs 1.52 lakh crore (approximately $18 billion) in investments in a relatively short period, with several projects already in development. Neil Shah, Vice President of Counterpoint Research, stated that the telecom industry, particularly with the current rollouts of 5G and fiber networks, plays a crucial role in this growth.

“Projects like BharatNet and solutions such as fixed wireless access (FWA) are playing a pivotal role, especially in regions where fiber deployment is challenging. The semiconductor demand in India will be driven by the need for high-speed connectivity”, Shah noted.