Will India Become Leader In Semiconductor Chips?
Today, let's discuss one of the most trending topics – "India's Semiconductor Dream." In this video, we'll delve into India's aspirations in this field, explore its current position in the semiconductor industry, and contemplate its future. We'll also examine how the government is supporting this industry's growth and the recent developments that offer hope for India's progress.
Now, let's learn about semiconductor chips.
Significance of Semiconductor Chips
Semiconductor chips are essential components of electronic devices. They power many everyday electronics such as smartphones, digital cameras, cars, computers, TVs, refrigerators, washing machines, and ATMs. Looking at the bigger picture, semiconductor chips are used in countless products like trains, ATMs, electronic vehicles, medical equipment, batteries, sensors, and light emitters. Essentially, semiconductors form the foundation of today's digital world. With the growth of digital technologies, the semiconductor market is also witnessing significant expansion.
Estimated Market of the Semiconductor Industry
Due to the rising demand for semiconductors in consumer electronics and automobiles, it's projected that India's semiconductor market could reach USD 55 billion by 2026, growing at a CAGR of 20% from 2022 to 2026. This growth is more than 1.5 times the current market size of USD 34 billion in FY 2023.
These statistics indicate that the semiconductor industry is rapidly advancing. India is making continuous efforts to establish its presence in this growing industry. As a result, India, which currently relies heavily on semiconductor chip imports, aspires to become a top leader in the sector.
India's Dependency on Imports
Currently, India heavily depends on imports for semiconductor chips. The country imports approximately USD 24 billion worth of semiconductors, mainly from Taiwan, China, Korea, and Vietnam.
In terms of market share, although Taiwan and South Korea are geographically small, they collectively control nearly 50% of the global chip market. Taiwan is the undisputed global leader in raw semiconductor manufacturing, followed by South Korea. These nations' largest customers are the United States and China. Interestingly, China imports 40% of its chip requirements from these two countries, controlling 5% of the world's semiconductor market. Despite this, China possesses the largest deposit of materials used in chip production.
Conversely, the United States and some European nations are exclusive producers of the hardware used in chip manufacturing.
India's Current Position
Presently, India lacks a significant presence on the global chip manufacturing map. While India has engineering talent, it lacks domestic chip manufacturing capabilities. At the moment, India accounts for only 1% of global semiconductor trade.
However, India has a considerable opportunity, particularly as global companies seek alternatives to China. The Indian government is committed to developing India's semiconductor ecosystem and making the country self-reliant in this sector.
India's Journey into the Semiconductor Industry
With a forward-looking approach, the Indian government is promoting the growth of the semiconductor industry, aiming to reduce imports and support local manufacturing.
