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Semiconductor Industry in India

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Semiconductor Industry in India

March, 2013


The semiconductor industry in India has come a long way. In the last decade, we have seen several global semiconductor companies set shop in India. Not only has this led to remarkable growth in the industry, but has also led to significant increase in product and design innovation in the domestic market. Rapid changes in technology, increasing complexity of equipment and falling prices have made innovation vital to reduce cost of production and increase return on investment (ROI). In India, most of the research and developments (R&D) labs working in the semiconductor domain are located in premier technical institutes such as the IITs, IISc and BITS Pilani. These institutes, with access to funding, quality infrastructure and a large talent pool, account for 70 per cent-75 per cent of semiconductor research activities in the country. Of all the research undertaken here, almost 43 per cent of the activities are in the area of chip design. India also ranks favourably in terms of the number of IEEE papers filed in fields related to semiconductor design.

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.

Market Size

Indian semiconductor industry has been witnessing tremendous growth over the past few years with rising demand for mobile handsets and PCs. 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 be expanded at an accelerated rate in future. Other segments like digital camera, LCD TV, and storage flash memory products are some of the major prospective consumers to fuel further the future growth.

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 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 India Semiconductor Association (ISA).

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.


In India, after Bangalore, Noida has become a hub for semiconductor design industry with many major players having their offices and research and development (R&D) centres in Noida. Global MNCs such as Freescale, Mentor Graphics and Interra Systems have got their setup in Noida.

The electronics sector attracted foreign direct investment (FDI) worth Rs 5,462.94 crore (US$ 1 billion) during April 2000 to December 2012, 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:

  • US-based Texas Instruments (TI) has launched a centre of excellence at Netaji Subash Institute of Technology (NSIT), New Delhi. This is the first centre for embedded product development that TI is setting up in any educational institution in India
  • Semiconductor company, Intersil Corporation has announced that it has opened a new design centre in Bengaluru. The centre will help develop new integrated circuits and reference designs, besides providing system-level application support for customers
  • Indian start-up Lava announced its partnership with Intel at Mobile World Congress, with the launch of the first Intel-powered smartphone in India, the Xolo X900. Lava, which has so far focused on budget phones, will manufacture smartphones under the Xolo brandname
  • ON Semiconductor Corporation has announced the availability of a full front-to-back process design kit for its High-Q Integrated Passive Device (IPD) processes. The product was developed for use with Agilent Technologies' Advanced Design System 2011 EDA software