India's semiconductor market to touch $64 bn by 2026: Counterpoint-IESA

India's semiconductor market will touch $64 billion by 2026, almost three times its 2019 size of $22.7 billion, a report released on Tuesday said. The country's telecom stack and industrial applications will account for two-thirds of the total market share.

According to a report by Counterpoint Research and the India Electronics & Semiconductor Association (IESA), the manufacturing of semiconductor chips in India will be driven by domestic and export markets with significant demand from the consumer electronics, telecom, IT hardware, and industrial sectors.  

"In the short term, there is a huge opportunity being driven by domestic demand across applications like sensors, logic chips, and analogue devices," said Tarun Pathak, research director at Counterpoint.

He added that local sourcing is already happening in a significant way and it accounted for 10 per cent of the overall market in 2022.

Amitesh Kumar Sinha, chief executive officer (CEO) of India Semiconductor Mission and joint secretary of the Ministry of Electronics and Information Technology, said, "India is committed to becoming a reliable partner in global supply chains and we are working towards that by framing long-term policies, keeping the next 25 years in mind."

Under its Semicon India Program, which has an outlay of about $10 billion, Centre funds 50 per cent of the semiconductor manufacturing project costs with 2.5 per cent of the budget earmarked for research and development, skill development, and training

Sinha added, "More than 70 per cent of the project costs for semiconductor manufacturing are incentivised by the Centre and state governments in India of which 50 per cent is funded by the Centre on an upfront basis while the rest is covered by the state governments."

The Centre is also trying to woo major US companies to set up their chip manufacturing facility in India. Micron is expected to set up a plant in India in the coming months. Business Standard on Wednesday reported that IT and Communications minister Ashwini Vaishnaw has met top executives of US companies in San Francisco.

"The meetings have been very fruitful and the message was clear there is no doubt that India is the next big destination for everyone in semiconductors to invest in," Vaishnaw told Business Standard over the phone.

Over the next two days, Vaishnaw plans to meet more executives from Intel, Micron, Western Digital, Applied Materials, HP, Analog Devices, Lam Research, and AMD, among others.