The government had, in December 2021, announced a Rs 76,000-crore incentive scheme for development of semiconductors and display manufacturing ecosystem.
The country’s semiconductor market is expected to reach $55 billion by 2026 on the back of growing demand from smartphones and wearables, automotive components, and computing and data storage sectors, which will contribute more than 60% to the industry, according to Deloitte.
The growth estimates take into consideration the government’s focus on domestic design and manufacturing of semiconductors by attracting investments via PLI and DLI schemes.
According to Deloitte, with India becoming a major player in the global value chain in semiconductors, the industry will further expand to $85 billion by 2030.
“The semiconductor chip shortage over the past two years has amplified the importance of this industry and exposed the underlying risks in the value chain, owing to geopolitical threats, fluctuating demand from OEMs, natural disasters and economic sanctions. These, however, present a unique opportunity for India, positioning it as the next big manufacturing destination,” said PN Sudarshan, partner and TMT (technology, media, and telecom) industry leader at Deloitte India.
“Driven by key factors, including a rise in semiconductor content, the advent of 5G and IoT, and data storage requirements, the sector will also attract investment, talent and bi-lateral ties focusing on supply chain, resilience, and localisation setting in India,” Sudarshan added.
The government had, in December 2021, announced a Rs 76,000-crore incentive scheme for development of semiconductors and display manufacturing ecosystem. In September last year, the incentive was further sweetened by the government by making the fiscal support at 50% of project cost uniform across all technology nodes for setting up of semiconductor fabs. Earlier, the fiscal support varied between 30-50% for different units.
Vedanta-Foxconn JV, IGSS Ventures and ISMC propose to set up chip manufacturing plants with a $13.6-billion investment and have sought support of $5.6 billion from the government under the incentive scheme.
The government will approve the two proposals shortly. It will take around a year or two to come up with their projects, minister of state for electronics and IT, Rajeev Chandrasekhar told FE last week.
With regard to the telecom sector, Deloitte expects the growth of 5G will largely be on the back of private 5G networks and 5G Standalone (SA) networks will accelerate private network deployment.
“India’s push towards advancing its telecom and data centre infrastructure, coupled with the availability of a multitude of approaches for private network deployment, presents a great opportunity for enterprises to utilise edge computing and 5G technology to enhance their operations, agility, and competitiveness,” said Peeyush Vaish, partner and telecom sector leader at Deloitte India.
In the telecom space, satellite broadband and communication service market in India is expected to grow with the players like Jio Satellite, OneWeb, Tata-backed Nelco, among others, also looking to offer mobile satellite internet services. According to Deloitte, the sector will expand with the developing use case horizon and the exponential growth in data consumption.
Deloitte projects India’s satellite broadband service market size to reach $1.9 billion by 2030.
https://www.financialexpress.com/industry/indias-chip-market-to-hit-55-bn-by-2026-deloitte/2994508/
