India could slash chip imports by $20B amid local push
What's the story
A report by McKinsey has predicted that India's efforts to develop its semiconductor industry could cut chip imports by $10 billion to $20 billion. The consultancy firm said that a combination of government incentives and partnerships with global technology leaders is needed for India to become a major player in the global semiconductor value chain.
Industry importance
Market to grow to $100B by 2032
Semiconductor chips are critical components in nearly every electronic device, powering everything from simple calculations to complex systems. The Indian semiconductor market is projected to grow from $34.3 billion in 2023 to over $100 billion by 2032, according to McKinsey's estimates. This growth highlights the increasing importance of semiconductors in India's economy and technological advancement.
Design dominance
India's semiconductor industry focused on design
India's semiconductor industry is mainly focused on design, contributing to nearly 20% of the world's semiconductor design workforce. The country also hosts Research and Development (R&D) centers for major players in the field. Over the last year, several large projects worth between $3 billion and $11 billion have been announced, indicating a shift toward outsourced semiconductor assembly and testing (OSAT) as well as legacy-node fabrication.
Strategic approach
Transition to large-scale semiconductor fabrication expected to be gradual
The report notes that these projects are backed by some $10 billion in government incentives, which could help cut down import dependency. However, the transition to large-scale semiconductor fabrication is expected to be gradual. India's semiconductor industry aims to achieve fabrication at nodes above 14 nanometers by 2030, but moving to sub-10nm technologies may take longer due to high capital requirements and limited access to advanced manufacturing technologies.