India is emerging as a key player in the global semiconductor market, positioning itself as a hub for semiconductor manufacturing and innovation. This transformation is largely fueled by government initiatives like the Production-Linked Incentive (PLI) Scheme and substantial investments from global tech giants like Foxconn and TSMC. With the global semiconductor supply chain facing disruptions, India is now seen as a viable alternative to traditional manufacturing hubs.
Government Support – The PLI Scheme
Launch of the PLI Scheme: In 2021, the Indian government launched the Production-Linked Incentive (PLI) Scheme to incentivize the domestic manufacturing of semiconductors.
Key Objectives of the Scheme: The PLI scheme focuses on promoting semiconductor fabrication, design, and testing within India. By offering financial incentives, the government aims to reduce India’s reliance on imported semiconductors and strengthen the domestic supply chain.
Expected Impact: The scheme is expected to attract global companies to establish manufacturing plants in India, creating thousands of jobs and advancing technology capabilities within the country.
Major Global Investments
Foxconn’s Investment: Foxconn, a global leader in electronics manufacturing, has committed $1 billion to build a semiconductor manufacturing plant in India. This is part of their strategy to diversify supply chains and cater to the growing demand for semiconductors globally.
TSMC’s Interest: Taiwan Semiconductor Manufacturing Company (TSMC) is in talks with the Indian government to set up a chip production plant. This investment further strengthens India’s position as a global semiconductor hub.
Projected Market Growth: By 2025, India is expected to fulfill 2-4% of the global semiconductor demand. By 2030, India’s semiconductor industry could generate an estimated $60 billion in revenue, solidifying its importance in the global supply chain.
Addressing the Talent Gap with HR Consultants
The Talent Shortage: The rapid growth of India’s semiconductor sector necessitates the development of specialized skills in semiconductor design, fabrication, and AI-driven technologies. India has a large technical workforce, but many professionals still need reskilling for semiconductor-specific roles.
Role of HR Consultants: HR consultants are critical in bridging the talent gap by identifying and sourcing top-tier professionals with expertise in semiconductor technologies. They also play a role in reskilling the existing workforce, ensuring that professionals are trained in the latest advancements in the semiconductor industry.
Skills Development Programs: HR consultants can collaborate with educational institutions and companies to design training programs that focus on semiconductor engineering, chip design, and emerging technologies such as 5G, automotive electronics, and artificial intelligence (AI).
India's semiconductor industry is set for rapid expansion. Foxconn has committed to a $1 billion investment to establish a semiconductor manufacturing plant, while TSMC is in discussions with the Indian government to set up a chip production unit. Along with these developments, there are rising expectations for India to produce 2-4% of the global semiconductor demand by 2025, with projections showing the industry could generate over $60 billion in revenue by 2030.
Additionally, India's start-up ecosystem is increasingly playing a significant role. Startups are focusing on semiconductor design, research, and development in emerging technologies like 5G, automotive electronics, and AI. The rise of these startups is further fueling the country’s ambition to become a key player in the global semiconductor revolution.
Future Growth Prospects
Favorable Environment for Growth: India’s semiconductor sector is set for massive growth due to the combination of favorable government policies, foreign investments, and an increasing number of specialized professionals in the field.
Strategic Infrastructure Development: Alongside investments from companies like Foxconn and TSMC, the Indian government is focused on developing the infrastructure necessary for semiconductor manufacturing. This includes setting up research and development centers, test facilities, and training programs to support the industry.
India’s Global Position: By 2030, India is expected to emerge as a critical player in the global semiconductor supply chain, supplying cutting-edge chips for industries such as 5G, automotive, and consumer electronics. This will make India a key player in the semiconductor revolution.
The graph above illustrates the projected growth of India's semiconductor market from 2024 to 2030.
In 2024, India is expected to account for 1% of the global semiconductor production.
By 2026, India's share is projected to increase to 5%.
By 2030, India is anticipated to generate an estimated $60 billion from semiconductor exports, positioning it as a significant player in the global market.
Conclusion
India is on the verge of becoming the new epicenter of the global semiconductor revolution. With government-backed initiatives, major investments from companies like Foxconn and TSMC, and the vital role of HR consultants in addressing the talent gap, India’s semiconductor sector is poised to boom. As these efforts come to fruition, India will establish itself as a central hub for semiconductor manufacturing and innovation, playing a critical role in the global tech ecosystem.
