Counterpoint-IESA report reveals India's semiconductor market may reach $64 bn by 2026

As per a report, by 2026 India’s semiconductor market will reach $64 billion. It will be almost three times its size at $22.7 billion in 2019. Two-thirds of the total market will be accounted for in the telecom stack and industrial applications.  

A report by Counterpoint Research and the India Electronics & Semiconductor Association (IESA) reveals that the manufacturing of semiconductor chips in India will be driven by domestic and export markets with significant demand from the consumer electronics, telecom, IT hardware, and industrial sectors. 

"In the short term, there is a huge opportunity being driven by domestic demand across applications like sensors, logic chips, and analogue devices," said Tarun Pathak, Research Director at Counterpoint.

He mentioned that local sourcing is happening in a major way and it contributes 10% of the overall market in 2022.

Amitesh Kumar Sinha, Chief Executive Officer (CEO) of India Semiconductor Mission and joint secretary of the Ministry of Electronics and Information Technology, said, "India is committed to becoming a reliable partner in global supply chains and we are working towards that by framing long-term policies, keeping the next 25 years in mind."

Under its Semicon India Program, which has an outlay of about $10 billion, Centre funds 50% of the semiconductor manufacturing project costs with 2.5% of the budget earmarked for research and development, skill development, and training.

Sinha added, "More than 70% of the project costs for semiconductor manufacturing are incentivised by the Centre and state governments in India of which 50% is funded by the Centre on an upfront basis while the rest is covered by the state governments."

The government has also geared up to win over some major US companies to set up their chip manufacturing facility in India. In following months Micro may come up with a plant in India.  

According to a media report, IT and Communications Minister Ashwini Vaishnaw has met top executives of US companies in San Francisco.

"The meetings have been very fruitful and the message was clear there is no doubt that India is the next big destination for everyone in semiconductors to invest in," Vaishnaw told the media source.

Over the next two days, Vaishnaw plans to meet more executives from Intel, Micron, Western Digital, Applied Materials, HP, Analog Devices, Lam Research, and AMD, among others.