Indian semiconductor component market forecast to reach $300bn by 2026

A combination of supply chain challenges and COVID-related issues have significantly impaired the semiconductor manufacturing sector.

The massively growing number of devices and products that require semiconductors, such as smartphones, computers, trains and cars, is helping drive demand.

According to a new joint report by the India Electronics & Semiconductor Association (IESA) and Counterpoint Research, India’s semiconductor component market is forecast to record revenue of $300 billion between 2021 to 2026. If this forecast is realised, India will become the second largest semiconductor market in the world in terms of scale.

IESA Vice President Sunil G Acharya believes that semiconductors will be found inside all intelligent devices and solutions. “India is becoming a tech-centered growth story with advancing technologies and innovation being integral to democratizing access. The semiconductor study will play a major role in India’s growth,” he said.

The Indian government has implemented a number of projects that are aimed at improving the production of semiconductor components in the country, including the introduction of Production Linked Incentives and a Made in India initiative.

A combination of an increasingly skilled, young population and foreign direct investment will play a central role in developing India semiconductor industry over the next four years and beyond. An increasing number of semiconductor components will also be locally sourced in the country in the future, with most components currently being imported into the nation.

For example, in 2021 just 5% of semiconductor components were locally sourced for IT products, but this figure is set to reach 26% by 2026. Across all applications, locally sourced semiconductor components will be used more often by 2026.

There is seemingly no end to the demand for semiconductors, with new digital technologies boosting innovation and leading to the manufacturing of advanced tools and products that require semiconductors to reach their full potential.