India's high-tech leap: Leading the semiconductor wave

India is positioning itself to become a global semiconductor manufacturing hub, a vision supported by a booming electronics industry, key government initiatives, and increasing adoption of new technologies such as artificial intelligence (AI), generative AI (Gen AI), 5G, and the Internet of Things (IoT). According to a report by the India Electronics and Semiconductor Association (IESA), the country’s semiconductor market is set to grow from $52 billion in 2024 to $103.4 billion by 2030. 

Today, semiconductors power almost all electronic devices, from mobile phones to driverless cars. The demand for semiconductors is surging, driven by several global trends such as the rise of AI, vehicle electrification, and autonomous driving. AI alone will contribute significantly to the growth of the global semiconductor market in 2025, showed an IDC report. This demand presents a substantial opportunity for semiconductor manufacturing across the entire value chain.

Strategic Policy Push 

The Indian government has been incentivizing indigenous semiconductor manufacturing through its $10 billion investment under the India Semiconductor Mission (ISM). Key measures include state-level subsidies and incentives to attract global players, the production-linked incentive (PLI) scheme to enhance the country’s manufacturing capabilities, and the design-linked incentive (DLI) scheme, which supports semiconductor startups. These enabling policy measures and a favourable business environment are making India a hotbed for global semiconductor investments.

As global investments pour in, India is actively nurturing its local ecosystem and striving to realise the ‘Make In India’ vision. Recognising the emerging opportunities, leading global chipmakers are investing in fabrication facilities as well as assembly and manufacturing units. This local-to-global approach is set to expand India’s manufacturing capacity, boost electronics exports, stimulate regional economies, generate high-skilled employment, and foster innovation.

Comprehensive Education and Training

India’s vast engineering talent pool holds immense potential but requires targeted training in critical areas such as chip design, wafer fabrication, and semiconductor research. A key starting point is the revamp of engineering curricula and a close alignment with industry needs, fostering a robust and ready-to-deploy talent pool. Introducing specialized academic programs in semiconductor design and manufacturing will be instrumental in cultivating a skilled and competitive workforce.

To solidify its position as a global electronics hub, India must prioritize large-scale upskilling and reskilling initiatives. By equipping engineers with advanced technical competencies and domain-specific expertise, the country can meet the growing global demand for semiconductor professionals and become a driver of innovation, design leadership, and comprehensive manufacturing capabilities. 

There is a need for a national mission-level program to encourage partnerships between academic institutions and semiconductor companies. Such collaborations will create internship, apprenticeship, and research opportunities for learners, providing hands-on experience and preparing them for rising industry demands. Corporations and industries can enrich the current talent pool with rigorous training programs and industry certifications. 

Robust Supply Chain Network

As AI and Gen AI accelerate demand for specialized, high-performance chips and systems, building a self-reliant supply chain is imperative for enhancing the competitiveness of India's semiconductor industry as well as ensuring better governance and sovereignty. 

Chips and systems are often sourced from a few countries or regions, which results in supply concentration. Geographic diversification, increasing domestic sourcing, and encouraging local production of critical components to reduce import dependency are requisites for resilient supply chains. Financial incentives for fabrication facilities, ATMP (assembly, testing, marking, and packaging) units, and design centres will strengthen the supply network, developing India’s local ecosystem.

It is well recognized that the demand for semiconductors is growing. India must seize the emerging opportunities by scaling its capabilities while ensuring supply chain security, practising sustainability, and incentivizing manufacturers. These efforts can create a promising and compelling case to set up manufacturing operations in India. A comprehensive strategy encompassing investment, infrastructure, education, sustainability, innovation, and international collaboration will allow India to take the lead and potentially dominate the global semiconductor market.  

Rahul Arya

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Rahul Arya is Vice President, Semiconductor Industry – India at Capgemini.