New Delhi: India’s ambitious target of achieving $300 billion in electronics production by FY26 is poised to drive significant demand for semiconductors, estimated at $90-$100 billion, primarily fueled by the burgeoning domestic mobile manufacturing sector. This presents a substantial opportunity for the nation to capitalize on.
Currently, with electronics manufacturing standing at nearly $103 billion, the semiconductor requirement is estimated to be in the range of $26-$31 billion, accounting for 25 to 30 percent of chip components in the bill of materials (BOM) of any electronic product.
According to data from the India Cellular and Electronics Association (ICEA), the rise in electronics production to $300 billion by 2026 is projected to escalate the semiconductor demand significantly to $90-$100 billion.
The contribution of mobile phone manufacturing to the overall electronics sector has surged from 10 percent to an impressive 44 percent over the past seven years.
In FY23, the total import of integrated circuits (ICs) amounted to $16.14 billion, with $12 billion attributed solely to mobile phones.
However, according to ICEA, the production of processor chips, particularly advanced chips for high-end phones, may require some time before India achieves competitive levels.
Nevertheless, there is commercial viability in manufacturing processor chips for entry-level smartphones domestically, which could be a key consideration for new semiconductor fabs, noted the apex industry body.
Data indicates that with a monthly output of approximately 1.5 million units (10-14 nm) of chipsets, assuming 15,000 wafers of 300mm at 70 percent yield from a fab, and considering approximately 148 dies per wafer, the annual output could reach approximately 18 million chipsets.
Hence, the imperative for all stakeholders is to translate the growing semiconductor demand into domestic production and mitigate dependency on imports.
“This transition would bolster domestic procurement and enhance the viability of semiconductor fabs in India,” emphasized ICEA.
In March, Prime Minister Narendra Modi laid the foundation stone for three semiconductor projects worth Rs 1.25 lakh crore.
The inaugural ‘Make in India’ chip is slated to be rolled out in December this year from the Micron semiconductor plant in Gujarat.
