India’s semiconductor component market to reach US$ 300 bn by 2026: Report

The country’s also expected to become the world's second-largest market for semiconductors

August 17, 2022

The revenue of India’s end equipment market is expected to grow at a Compound Annual Growth Rate (CAGR) of 19% from 2021 to 2026

More than 14% of the total semiconductor consumption in 2026 will be accounted for, by the advanced 5G and fibre-to-the-home (FTTH) network infrastructure equipment

The adoption of Electric Vehicles (EVs), which make use of advanced technologies, will also create a spike in demand for semiconductors

Currently, 9% of this semiconductor requirement is met with domestic production

India’s semiconductor component market is expected to reach a total revenue of US$ 300 billion by 2026, a joint research report from Counterpoint Research and India Electronics and Semiconductor Association (IESA).

The report said that India is expected to become the world’s second-largest market for semiconductors, in terms of scale and growing demand for semiconductor components across several industries and applications.

This forecast is aided by the increasing pace of digital adoption and newer technologies in the country. These include a rise in usage of consumer technology such as smartphones, PCs, and wearables, and the nationwide implementation of cloud data centres, Industry 4.0 applications, IoT, smart mobility, and advanced telecom & public utility infrastructure.

Despite becoming one of the largest consumers of electronic and semiconductor components, most of them are imported. Currently, 9% of this semiconductor requirement is met with domestic production.

The revenue of India’s end equipment market stood at US$ 119 billion in 2021 and is expected to grow at a CAGR of 19% from 2021 to 2026. The Electronic System Design and Manufacturing (ESDM) sector in India will play a major role in the country’s overall growth, from sourcing components to design manufacturing.

Experts said that more than 14% of the total semiconductor consumption in 2026 will be accounted for, by the advanced 5G and fibre-to-the-home (FTTH) network infrastructure equipment. Other areas of semiconductor consumption include AI-driven 5G endpoints, from smartphones, tablets, PCs, connected cars, True Wireless Stereo (TWS), and industrial robotics, to private networks.

The experts further added that the rollout of 5G and fibre networks will facilitate a boost in the consumption of semiconductor components. In addition, the adoption of Electric Vehicles (EVs that use of advanced technologies, will also create a spike in demand for semiconductors.

According to the research, 80% of the semiconductor revenues in India in 2021 came from smartphones, wearables, and the IT & Industrial sectors.

As people upgrade from feature phones to smartphones demand for more advanced logic processors, memory, integrated controllers, sensors and other components will continue to fuel the demand for semiconductors.