Indian semiconductor industry has been witnessing tremendous growth over the past few years with rising demand for mobile handsets and personal computers. On the back of prolific expansion of products and services, such as set-top boxes, wireless handsets, 3G rollout, WiMAX deployment, notebooks, and smart cards, it is expected that the market will grow at an accelerated rate in future. Other segments such as digital camera, LCD TV, and storage flash memory products would fuel further growth in the sector.
India has a well-developed semiconductor design industry, with 120 design units. Various global integrated device manufacturers (IDMs) have established their captive design centers in the country, which ranks the second among the US, the UK, Germany, Sweden, China, Taiwan and Israel in terms of design revenues.
India Semiconductor Association (ISA) is the premier representative of the Indian electronic system design and manufacturing (ESDM) industry since 2005. The trade body is imbibed with an objective to create global awareness for the Indian ESDM industry and support its growth by initiating focussed measures that would develop an appropriate ecosystem.
Electronics is essential to technology infrastructure, and semiconductors are the main component of electronics products. Electronics sales in India, which totalled US$ 40.7 billion in 2009, will touch US$ 400 billion by 2020. At present, local manufacturing accounts for about 40 per cent of consumption and it could increase to 80 per cent by 2020. Indeed, many global original equipment manufacturers (OEMs) and electronic manufacturing services (EMS) firms, including Samsung, LG, Nokia, Toyota, Hyundai, Flextronics, Jabil, Foxconn, Sanmina, Elcoteq and Celestica, have set up manufacturing facilities in India in recent years, according to ISA.
Local manufacturing of telecom equipment by OEMs and EMS companies have propelled related semiconductor consumption by 50 per cent during 2010 to 2012.
The Indian semiconductor design industry, consisting of Very Large Scale Integration (VLSI) design, embedded software development and hardware / board design is estimated at US$ 7.5 billion in 2010 and expected to grow year-on-year at 17.3 per cent and reach US$ 10.2 billion by 2012.
The top 10 global fabless companies and the top 25 semiconductor companies have operations in India.
The Government has allowed 100 per cent foreign direct investment (FDI) under the automatic route in semiconductor fabrication plants (fabs) to promote semiconductor manufacturing in India.The FDI in Semiconductor sector in India were crucial for the development of the IT and the ITeS sector in India.