India is on the brink of a massive transformation in its semiconductor industry, as a recent report by global financial firm UBS forecasts significant growth in the sector over the next five years. According to the study, India’s semiconductor market demand is expected to grow at a compound annual growth rate (CAGR) of 15% from 2025 to 2030, surging from ₹4,64,940 crore (US$ 54 billion) in 2025 to an impressive ₹9,29,880 crore (US$ 108 billion) by 2030.

This explosive growth in the India semiconductor market is being driven by a unique combination of factors including strong domestic electronics demand, favourable demographics, and proactive government support. India is emerging as a significant player in the global semiconductor supply chain amid increasing global uncertainty and the ongoing "China plus one" strategy adopted by various multinational tech giants.

The UBS semiconductor report reveals that even though India currently accounts for only 0.1% of the global wafer manufacturing capacity, and 1% of the world’s annual semiconductor equipment spending, it already contributes 6.5% to the global semiconductor end-demand. This discrepancy between consumption and manufacturing capacity highlights a huge localisation opportunity for the country.

By 2030, the revenue potential from localisation in the Indian semiconductor market is projected to reach ₹1,11,930 crore (US$ 13 billion). While this number is still small in comparison to the total demand, it signifies a strong beginning as the government and private sector take initiatives to develop chip fabrication and assembly units domestically.

One of the key catalysts for this surge is the India chip industry’s growth on the back of rising enterprise adoption of advanced semiconductors, fueled by industries such as automotive, telecom, consumer electronics, and data centres. The India tech sector, long dominated by software and services, is now evolving into a hardware-driven ecosystem with an emphasis on semiconductor R&D and design.

Interestingly, India already holds a global edge in chip design capabilities, with nearly 20% of the world's chip designers based in the country, mostly working with multinational corporations. This intellectual capital forms the backbone of the industry and is expected to play a pivotal role as India accelerates its manufacturing ambitions.

Government policies and incentives under the Semicon India Programme have also significantly boosted investor confidence. The initiative offers support for semiconductor fabs, display fabs, ATMP (Assembly, Testing, Marking, and Packaging) units, and semiconductor design. The government’s goal is to make India a global hub for electronics manufacturing, reducing reliance on imports and addressing the supply-demand mismatch.

The global landscape also favours India's rise in this domain. With escalating US-China trade tensions, companies are increasingly diversifying their manufacturing and sourcing strategies. India is emerging as a preferred destination, offering political stability, a young skilled workforce, and growing domestic consumption.

Despite the bullish outlook, challenges remain. The sector requires massive capital investment, technological collaboration, and development of a robust supply chain ecosystem. Given the highly specialised nature of semiconductor manufacturing, India must focus on strategic partnerships, knowledge transfer, and continuous upskilling of its workforce.

The UBS report outlines that while the US and China will continue to dominate the global semiconductor market, India’s share is set to grow exponentially. From its current 6.5% share of global end-demand, India is poised to move up the value chain, both as a consumer and producer of semiconductors.

This optimistic outlook also creates opportunities for startups, academic institutions, and private players to collaborate and innovate in chip design, material science, and sustainable manufacturing practices. As global emphasis on digitalisation, AI, 5G, and IoT technologies increases, India’s semiconductor consumption will continue to soar.

Moreover, the emergence of EVs (Electric Vehicles), smart appliances, and industrial automation are set to push semiconductor usage in India to unprecedented levels. The ₹9.3 lakh crore semiconductor demand forecast by 2030 reflects not just consumption growth, but a deeper integration of semiconductors into India’s economic fabric.

In conclusion, the India semiconductor market growth presents a transformational opportunity for the country. With a projected 15% CAGR, and estimated market size of ₹9,29,880 crore (US$ 108 billion) by 2030, India is on a firm path to becoming a global semiconductor powerhouse. However, achieving this vision will require persistent focus, collaboration across stakeholders, and strategic investments to build a resilient and competitive semiconductor ecosystem.

As of 2025, India’s semiconductor revenues stood at ₹4,64,940 crore, forming 6.5% of the global market. The next five years will be crucial in translating this demand potential into a robust domestic industry, driven by government incentives, private sector innovation, and global realignments in chip supply chains.

India’s semiconductor journey has just begun—but the trajectory is clearly set for a high-growth, high-impact future.

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