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Semiconductor Market to Reach $64 bn by 2026

From April 29 to May 1, 2022, the Ministry of Electronics & Information Technology (MEITY) is organising Semicon India 2022 Conference in Bengaluru.

India Proposals Semiconductor FabsThe semiconductor industry in India has been facing heat in chip manufacturing in the last few years. Not only for India, but this pandemic has created the worst situation for the whole world. As there is some relief in the Covid situation so the market is also taking pace and we are expecting to see some positive results.

The Indian government has announced several initiatives, where they planned to make all electronic equipment in India. Many PLI schemes and some relief to the manufacturers have also been announced.

A report from IESA (Indian Electronics and Semiconductors Association) says that only 9% of India’s semiconductor components were sourced locally last year. However, the government’s ‘Make in India’ and PLI policies for semiconductors is expected to be a game-changer for the space, driving local sourcing further. With this, local procurement will grow by over 17% by 2026. As per the report, some of the primary growth drivers include accelerated digitization, dependence on complex electronic systems to process vast amounts of data, and the increasing use of technologies like AI.

Speaking on the reports, the spokesperson of IESA said, “The demand for semiconductors is growing astronomically worldwide. However, taking multiple factors into consideration, including the pandemic and the global geopolitical events, the manufacturing of the components is heavily impacted. IESA’s reports were aimed at analyzing the market situation, manufacturing supply chain, and prospects for India. They highlight the key aspects and offer detailed insights. While the local production is currently low, India has immense potential to become a leading supplier in the coming years, provided the talent pool and resources are utilized correctly. If this is done, the semiconductor market can be a major contributor to economic growth, and India’s dream of becoming a USD 5 trillion economy can be fulfilled.

IESA SummitFurthermore, the report also highlighted that 80% of the total revenue in the Indian semiconductor industry stemmed from mobile phones, smart wearables, IT, and other industrial components. Additionally, with the telecom industry preparing to rollout 5G technology by deploying cloud networks, the demand for semiconductors is expected to skyrocket. The report also focused on how the semiconductor demand is boosting the Auto industry and will give rise to EV Segment.

The report also says that “Globally, from USD 440 billion in 2020, the semiconductor manufacturing market comprised of Materials, Equipment and services t is likely to touch USD 1 trillion by 2030.  The 3 important pillars of the ecosystem are the Semiconductor manufacturing equipment, materials (Chemicals, Minerals, and Gases) used in the manufacturing process, and services across the semiconductor manufacturing value chain, the overall global opportunity across these elements is estimated to be USD 550-600 billion by 2030.  This report estimates an opportunity of about 80B $ for the Indian industry by 2030.  Also, the report reveals the opportunity for innovation and Research in the  Semiconductor manufacturing equipment – Submodules, Consumables and spares for the MSME industry in India.

Impact of the Russia-Ukraine War

The Russia-Ukraine war has not only impacted their countries but also given a huge loss to the semiconductor industry in India.

Rajeev
Rajeev Chandrasekhar, Minister of State for Electronics and Information Technology

“Russia-Ukraine war has harmed many supply chains numbers of sectors, including semiconductor industry. Ukraine and Russia are major sources of Neon and Hexafluorobutadiene gases. The impact of the war might cause extra disruptions and affect the supply chains of semiconductors. The automobile industry is one of the most affected sectors, along with electronics. The shortage of semiconductors first happened due to the pandemic lockdown and restrictions”, said Rajeev Chandrasekhar, Minister of State for Electronics and Information Technology.

By setting aside the war, Russia is making up strategies to restart its ailing local manufacturing of semiconductors, since it cannot get chips from the usual suppliers. The country’s goal doesn’t sound ambitious because it requires a huge investment. For example, while TSMC plans to hit 2nm by 2026, Russia wants 28nm local chip manufacturing by 2030.

Russia’s government has developed a preliminary version of its new microelectronics development plan that requires investments of around $3.19 trillion ($38.43 billion) by 2030. The money will be spent on the development of local semiconductor production technologies, domestic chip development, data center infrastructure, developing of local talents, and marketing of homebrew chips and solutions, reports Cnews.

The Global Situation

Semiconductor ChipsAccording to an international news portal, the US has planned to propose a semiconductor industry partnership between the United States, Taiwan, South Korea, and Japan in a move to prevent China from gaining dominance over the strategic sector.

Not only that, but China also initiated economic warfare to acquire Taiwan’s semiconductor industries.

The Taiwanese government has accused China of waging economic warfare against Taiwan’s tech sector by stealing technology and inveigling away skilled engineers, reported The HK Post.

Further Initiatives

From April 29 to May 1, 2022, the Ministry of Electronics & Information Technology (MEITY) is organising Semicon India 2022 Conference in Bengaluru. The conference will be inaugurated by PM Narendra Modi. The agenda of this conference is to make India a significant player in the global semiconductor value chain.

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Nitisha Dubey

I am a Journalist with a post graduate degree in Journalism & Mass Communication. I love reading non-fiction books, exploring different destinations and varieties of cuisines. Biographies and historical movies are few favourites.

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