Introduction

The global semiconductor industry is undergoing a seismic shift. As supply chains diversify and demand accelerates across sectors like artificial intelligence (AI), electric vehicles (EVs), and advanced computing, India finds itself at a critical inflection point. Once a marginal player in the semiconductor value chain, India is now poised to become a global contender—backed by visionary policies, strategic alliances, and a talent-rich ecosystem.

According to an April 2025 report by UBS, India’s semiconductor market is expected to grow at a compound annual growth rate (CAGR) of 15%, doubling its value from US$54 billion in 2025 to US$108 billion by 2030. This projection outpaces global averages and reflects a transformation driven not just by ambition, but by a confluence of real, measurable progress.

This blog explores the key forces behind India’s semiconductor revolution—from domestic demand and government initiatives to global supply chain realignments and industry trends identified in Deloitte’s 2025 Global Semiconductor Outlook. We also examine India’s unique strengths in design, assembly, and testing, and how partnerships with nations like Singapore are shaping the future of semiconductors in South Asia.

1. The Size of the Prize: A $108 Billion Market

India’s semiconductor end-use market, as UBS projects, will double in size by the end of the decade. The underlying driver? A rapid rise in domestic consumption of semiconductors, catalyzed by:

• The proliferation of smartphones, wearables, and consumer electronics

• Growth in AI and data center infrastructure

• Electrification of automobiles

• Increased investments in defense and industrial automation

• Government incentives promoting Make in India

Currently, India imports nearly 90–95% of its semiconductor and electronics components, underscoring both the scale of dependency and the potential for self-reliant growth. By strengthening the local semiconductor supply chain, India aims to reduce this dependence while becoming a global hub for chip design, testing, and packaging.

2. What UBS and Deloitte Say: The Market Signals Are Clear

UBS Report (April 2025): The Growth Drivers

UBS’s report provides a detailed snapshot of why India’s semiconductor market is growing faster than the global average:

• Talent Pool Advantage: India’s youthful, tech-skilled workforce is a key asset. With over 1.5 million engineers graduating annually, India boasts one of the largest talent pools for electronics and chip design.

• Consumer Electronics Boom: India is among the largest markets for smartphones, TVs, and other digital devices. As incomes rise and digital penetration deepens, the demand for advanced chips continues to rise.

• Enterprise Adoption of Advanced Chips: From cloud computing and fintech to AI and robotics, Indian enterprises are increasingly reliant on high-performance computing—driving demand for specialized semiconductors.

• Policy Push: Bold initiatives like the Semicon India Programme are catalyzing both domestic and foreign investment in semiconductor manufacturing and R&D.

Deloitte’s 2025 Global Semiconductor Outlook: What’s Next?

Deloitte’s global report complements the UBS insights by highlighting the technological trends reshaping the semiconductor landscape:

• Generative AI and Machine Learning: Chips optimized for AI workloads are seeing explosive demand, with India rapidly becoming a hub for AI software and applications.

• Data Center Expansion: India’s digital transformation is boosting demand for semiconductors used in servers, memory, and networking equipment.

• Digital Twin Technology: Semiconductor firms are increasingly adopting digital twins to design and optimize complex chiplet systems—a trend gaining traction in India’s design-centric ecosystem.

• Subdued Demand from Legacy Categories: While PC and smartphone sales may plateau, newer verticals like defense, EVs, and IoT are picking up the slack.

3. India’s Position in the Global Semiconductor Value Chain

Despite the progress, India’s current standing in global semiconductor manufacturing remains modest:

• 0.1% of global wafer fabrication capacity

• 1% of annual global capital expenditure on semiconductor equipment

• Yet, 6.5% of global semiconductor demand—a clear imbalance and an opportunity

This mismatch reveals an opening for India to scale its role from a design powerhouse to an integrated player in chip fabrication and assembly.

India’s Core Strength: Design Talent

According to John Neuffer, President and CEO of the Semiconductor Industry Association, India contributes 20% of the global semiconductor design workforce, with engineers working at top companies such as Qualcomm, Intel, AMD, and NVIDIA. This talent concentration is helping India lead in high-value segments of the chip lifecycle—specifically:

• SoC (System-on-Chip) design

• Chip architecture and testing

• Embedded software and firmware

The next frontier? Translating design expertise into end-to-end product ecosystems, supported by domestic fabs and advanced packaging units.

4. India-Singapore Strategic Partnership: A Cross-Border Collaboration Model

In 2024, India and Singapore signed a Memorandum of Understanding (MoU) during the India–Singapore Ministerial Roundtable. The agreement aims to foster:

• Intergovernmental collaboration between Singapore’s Ministry of Trade and Industry and India’s MeITY

• Business-to-business partnerships via Enterprise Singapore and the India Semiconductor Mission

Why Singapore?

Singapore is Southeast Asia’s semiconductor leader, contributing:

• 5% of global wafer fabrication capacity

• 20% of global semiconductor equipment production

• 10% of total global chip output

India, in contrast, is a high-growth demand market—importing $4.68 billion in electronics from Singapore in FY 2024–25. The two nations’ complementary capabilities offer a roadmap for co-development and co-investment in fabs, R&D, and workforce development.

5. Government Interventions: The Semicon India Programme

India’s semiconductor push is built on the foundation of the India Semiconductor Mission (ISM), launched in March 2022 under the broader Semicon India Programme.

Key Elements of the ISM:

• Financial Outlay: INR 760 billion (US$8.87 billion)

• Scope: Covers the entire value chain—design, fabrication, assembly, testing, packaging

• Production-Linked Incentive (PLI) Schemes for manufacturers

• Design Linked Incentive (DLI) to support chip design startups and R&D labs

Progress as of 2024:

• 4 chip manufacturing units approved

• 9 new projects under SPECS with $900M+ in proposed investments

• Over 15,700 jobs created

• Early participants include:

  • Tata Electronics

  • TDK India

  • Motherson Electronics

This ecosystem is gradually laying the groundwork for an indigenous chip manufacturing backbone.

6. Global Realignment: The “China +1” Strategy

With trade tensions and geopolitical risks rising, global tech firms are actively seeking alternative manufacturing bases. India has emerged as a top destination under the “China +1” strategy due to:

• Cost competitiveness

• Political stability

• Robust legal frameworks

• A fast-improving infrastructure for logistics and data management

India is increasingly being chosen for back-end semiconductor production, including:

• Assembly

• Testing

• Packaging

• Quality assurance

These segments, though lower in margin compared to fabrication, are vital to the supply chain and are opening doors for job creation and upskilling.

7. Challenges and Roadblocks

India’s semiconductor journey is promising—but not without obstacles:

• Capital Intensity: Fab plants require billions in investment and long gestation periods

• Skilled Workforce: While India excels in design, it lacks trained professionals in fab operations

• Technology Transfer: Advanced node manufacturing still requires foreign IP and collaboration

• Infrastructure: Power, water, and cleanroom facilities must match global standards

• Global Competition: Countries like Vietnam, Mexico, and Malaysia are also competing for fab investments

India must balance speed, scale, and sustainability to navigate these challenges.

8. The Road Ahead: A Vision for 2030 and Beyond

India’s strategy for semiconductor leadership must be holistic and long-term. Key focus areas include:

• Building Fab Clusters: Similar to what Taiwan did with TSMC

• Skilling Initiatives: Creating a new generation of VLSI and semiconductor process engineers

• Strategic Alliances: With countries like the U.S., Japan, Taiwan, and the EU for tech transfer

• Incentivizing R&D: Through university-industry collaboration and startup incubation

• Creating Demand: Supporting downstream industries like EVs, telecom, defense, and AI

With the right balance of vision, execution, and collaboration, India could evolve from being a semiconductor customer to a global semiconductor contributor.

Conclusion

India’s semiconductor industry stands at the cusp of a new era—defined by massive market potential, supportive government initiatives, and a changing global order. The $108 billion projection by 2030 isn’t just a number; it’s a signal of intent, capacity, and ambition.

While there’s a long road ahead—especially in terms of fabrication capabilities—India’s strengths in chip design, backend operations, and strategic diplomacy offer a compelling foundation.

The semiconductor story in India is no longer about catching up. It’s about building forward—with precision, purpose, and partnerships.