India's semiconductor market to reach $155B by 2031: Report
What's the story
India's semiconductor market is expected to grow at a compound annual growth rate (CAGR) of 20% and hit $155 billion by 2031, a report by Kotak Mahindra Mutual Fund has said. The growth will increase India's share in global semiconductor consumption to nearly 9% by 2031. The projection is based on strong domestic demand, an expanding chip-design ecosystem, government support, and developing manufacturing and packaging capabilities.
Market growth
Semiconductor market growth trajectory
The report forecasts India's semiconductor market to be worth $62 billion by 2026, capturing about 6% of the global market. By CY31, this number is expected to rise significantly.
It also highlights the evolution of India's semiconductor value chain from its strengths in chip design toward fabrication, assembly/testing, and other related infrastructure.
Design prowess
Chip design and wafer fabrication
India's chip-design ecosystem is a major strength, with around 300,000 designers making up nearly 20% of the global workforce.
The report says India's current position in chip design is "Strong," with an ambition to achieve "Leadership" by 2030.
However, it also notes that wafer fabrication is currently "Absent" but aims to reach "Pilot-Scale."
Capacity expansion
OSAT/ATMP and government enablers
The report also highlights the current position of OSAT/ATMP as "Emerging," with a target to become "Scaled" by 2030.
Several enablers for this transition have been identified, including the Chip-to-Startup (C2S) program, Design Linked Incentive (DLI), Global Capability Centers (GCCs), semiconductor projects, and government support.
Projects like Tata-PSMC's Dholera 28nm fab and those involving Micron, Kaynes, and CG Semi are expected to bolster India's semiconductor manufacturing and packaging ecosystem.
Competitive edge
Cost competitiveness and capacity targets
India's cost competitiveness in semiconductor assembly/testing is another potential advantage.
The report says OSAT costs in India are 20-30% lower than those of its peers.
It also predicts a major increase in India's OSAT/ATMP capacity, with target capacity across projects rising from 15 million chips/day by CY26 to 48 million chips/day by CY28.
Projects involving CG Semi, Kaynes Semicon, Tata OSAT, and HCL Group-Foxconn JV will contribute to this growth.