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Semiconductor Industry in India

September, 2013


Semiconductor industry, which is now an inseparable part of almost all sectors, has emerged as one of the most important industries. It forms an essential part of all electronic items. It defines how efficiently and smartly we live.

India has become the hub for semiconductor design with nearly 2,000 chips being designed per year and more than 20, 000 engineers are working in various aspects of chip design and verification.

Semiconductor industry is basically divided into fables, which deals with designing and fabrication part, also called the semiconductor foundry, where the final microchip is manufactured. Within semiconductor design, there is very large scale integration (VLSI) design, embedded software and electronic design automation (EDA).

"In India, VLSI holds the biggest chunk in Indian semiconductor design industry," said Mr Kousik Mukherjee, head-EDA Division, Interra Systems, a US-headquartered company which has its operations in Noida and Bengaluru. While VLSI is big in Bengaluru, Noida holds the biggest chunk of EDA operations happening in India.

Market Size

India has seen growth in consumer electronics as a business and market, especially in the past 10 years. TVs and music systems, and a growing awareness/ need of white-goods seeded the initial growth in the 1970s and phones in the 1980s and 1990s. The past decade has seen a growing demand and market for smart phones, intelligent vehicles, renewable energy (especially solar photo-voltaic), solid state lighting (LEDs), electronics in the healthcare sector, tablets, increasingly sophisticated displays, etc.

Local electronics consumption is expected to touch US$ 400 billion by 2020, which translates into a chip market of between US$ 50 billion and US$ 60 billion. Over the last two years, chip consumption has increased by 61.44 per cent to US$ 8.25 billion.

The electronic system design and manufacturing (ESDM) sector of India is expected to touch US$ 94.2 billion by 2015 from US$ 64.6 billion in 2011, according to a report by the India Semiconductor Association (ISA) and Frost & Sullivan.


The electronics sector attracted foreign direct investment (FDI) worth Rs 5,986.51 crore (US$ 947.32 million) during April 2000 to June 2013, according to the data released by the Department of Industrial Policy and Promotion (DIPP), Government of India.

Some of the major investments in Indian semiconductor industry include:

  • IBM and STMicroelectronics are in advanced stage of talks with the Government of India for an investment worth Rs 50,000 crore (US$ 7.91 billion) to set up India's first chip-making facility
  • Cadence Design Systems has announced that it has completed the acquisition of Cosmic Circuits Private Ltd, a Bengaluru-based provider of analog and mixed signal intellectual property (IP) cores. The Cosmic Circuits team will report to Mr Martin Lund, Senior vice president of research and development, SoC Realization Group
  • Hitachi High-Technologies Corp has established Hitachi High-Technologies India Pvt Ltd (Hitachi High-Tech India) in Gurgaon, Haryana. The establishment of Hitachi High-Tech India should enable Hitachi High-Tech to demonstrate its global sales and global sourcing capabilities in India, which is a priority region for the Hitachi Group, with the aim of quickly generating annual sales in excess of ¥10 billion in India
  • Atrenta Inc has opened a research and development (R&D) facility in Noida, Uttar Pradesh (UP). The new facility houses Atrenta's current staff and meets near-term growth requirements, keeping pace with the company's global expansion plan
  • Forte Design Systems has partnered with CircuitSutra to provide VLSI design services throughout India. Forte and CircuitSutra will co-develop ARM AMBA AXI and OCP-IP models compatible with Forte's Cynthesizer SystemC high-level synthesis (HLS)