Can India make the breakthrough as global semiconductor hub?
Smartphone manufacturing is already there, but semiconductors will be next big play
Let’s start with a few facts that serve to highlight India’s position in the global electronics manufacturing sector:
India is now the second-largest mobile phone manufacturer globally, producing over 330 million smartphones annually. Apple, Samsung, and Xiaomi have set up manufacturing plants in the country.
The Indian government’s various schemes to boost domestic manufacturing have attracted over $17 billion of investment since 2020.
India has launched a $10 billion incentive program to attract electronic firms. Israel's Tower Semiconductor, Taiwan's Foxconn, and a consortium from Singapore have already shown interest to set up.
Tech giants like Intel, Qualcomm, and Microsoft have established R&D centers in India, and looking into AI, 5G, and quantum computing.
Electronics production in the country is expected to reach $300 billion by 2026.
With these facts as a backdrop, India’s journey from a consumer of global technology to a producer of high-tech products is becoming a key narrative in the modern technology ecosystem.
From assembling mobile phones to now setting its sights on becoming a semiconductor manufacturing hub, India’s rise is part of a larger global tech conversation. Today, India stands among the Top 5 mobile phone manufacturing nations, driven by policy frameworks such as the ‘Make in India’ initiative and the Production-Linked Incentive (PLI) scheme.
According to the India Cellular and Electronics Association, India’s total electronics production for the year stood at $115 billion in FY24, of which around $52 billion was mobile phones. This rapid ascent, however, is just the beginning of a larger ambition— one where semiconductors play a pivotal role.
Semiconductor opportunity
Semiconductors, the ‘brain’ of modern electronics, power everything from smartphones to advanced AI systems. Amid the global chip shortage brought on by the pandemic, India’s ambitions to establish a semiconductor manufacturing base have gained traction. With an estimated market potential of $64 billion by 2026, India has identified this sector as the next critical step in its manufacturing strategy.
The stakes are high— success in this sector could solidify India’s role as a critical link in global technology supply chains, reducing the world’s over-reliance on traditional players like Taiwan, South Korea, and China.
The pandemic exposed vulnerabilities in global supply chains, and nations are now keen to diversify their sources of technology components. India’s skilled workforce and competitive manufacturing costs make it an attractive alternative for countries looking to reduce reliance on a single region for semiconductors.
This shift also benefits multinational corporations. By diversifying their supply chains, businesses can mitigate risks and ensure more reliable operations, even in times of global crisis.
India’s push towards semiconductor manufacturing, coupled with collaborations like the US-India semiconductor supply chain initiative under the CHIPS Act, could lead to a significant restructuring of global supply chains. This transformation would not only bolster India’s economy but also contribute to a more balanced global tech ecosystem.
Gains to be made
The government’s focus on this sector is expected to generate tens of thousands of high-skilled jobs, further enhancing India’s reputation as a global tech hub. India’s rich pool of engineering talent, combined with its rapidly expanding domestic electronics market, gives the country a competitive edge in this space.
India’s rise in electronics and semiconductor manufacturing holds promise not just for its own economy but for the world. A more resilient and diversified supply chain helps stabilize global markets, reduces production bottlenecks, and lessens the risk of future shortages.
By becoming a key player in semiconductor manufacturing, India can contribute to greater global economic stability, benefiting businesses and consumers worldwide.
What was once seen as an aspirational goal is now fast becoming a reality: India is emerging as a leader in electronics manufacturing and semiconductor production, shaping the future of global supply chains and technology infrastructure.