India offers $10B booster to semiconductor, new design start-ups; Its time to invest

India is ramping up efforts to become a global leader in the semiconductor industry by offering financial incentives and infrastructure support to semiconductor design start-ups. With projections of the country’s semiconductor market reaching $64 billion by 2026, Minister of State for Electronics & IT Rajeev Chandrasekhar is spearheading the initiative to encourage investment in the semiconductor sector.

At an event as part of a series at IIT Delhi on May 12, Rajeev Chandrasekhar will meet with startups, innovators, chip designers, and business leaders to promote the growth of the industry. The program is part of the Semicon India Programme, which has an outlay of about $10 billion to fund 50% of semiconductor manufacturing project costs and R&D, skill development, and training.

The Indian semiconductor market is expected to reach $64 billion by 2026, and the government has launched the Semicon India Programme, which aims to offer financial incentives and infrastructure support for semiconductor designs. “India is committed to becoming a reliable partner in global supply chains,” says CEO of India Semiconductor Mission, Amitesh Kumar Sinha.

The IIT Delhi event on May 12 will focus on innovative semiconductor designs for automobility, mobility and compute, stimulate the next-generation semiconductor design start-ups, catalyze development of Indian IP cores in Semiconductors, catalyze co-development, and joint ownership of IPs with active Industry participation and availability of Incentives for the next wave of design startups.

The Indian semiconductor industry is still in the nascent stages of development, and the government is taking steps to create an ecosystem that can foster growth in the sector. “The government has announced several initiatives to support the growth of the semiconductor industry in India, including the National Electronics Policy, Make in India program, and the Phased Manufacturing Program,” said Satyajit Sinha, Senior Analyst at Counterpoint Research.

India Semiconductor Market to Reach $64B by 2026: Minister Encourages Startups & Innovators to Invest

These initiatives are expected to attract investment in the semiconductor sector and create jobs in the country. The Indian government is also providing financial incentives and infrastructure support for semiconductor designs.

“The rapid growth of digitalization, along with India’s high-growth digital and innovation economy, has created opportunities in the ‘New World Order of Semiconductor and Electronics’,” said Chandrasekhar. He inaugurated the 2nd ‘Semicon India FutureDESIGN Roadshow’ at IISc in Bengaluru in February, where he announced the first set of startups selected under the ‘Semicon India Future Design DLI’ scheme. The scheme aims to offer financial incentives and infrastructure support across various stages of development and deployment of semiconductor designs for Integrated Circuits (ICs), Chipsets, System on Chips (SoCs), Systems & IP Cores and semiconductor-linked designs over a period of five years.

According to Prime Minister Narendra Modi, “we have an exceptional semiconductor design talent pool which makes up to 20 per cent of semiconductor design engineers.” The Indian government is working towards making India a reliable partner in global supply chains by framing long-term policies, keeping the next 25 years in mind, said Amitesh Kumar Sinha, CEO of India Semiconductor Mission (ISM) and Joint Secretary, MeitY.

India’s semiconductor market was valued at $22.7 billion in 2019, according to a joint report by Counterpoint Research and the India Electronics & Semiconductor Association (IESA). The forecast of $64 billion by 2026 is set to be driven by both domestic and export markets with significant demand from the consumer electronics, telecom, IT hardware, and industrial sectors. India’s ‘telecom stack’ and industrial applications are expected to account for two-thirds of the total.

“In the short term, there is a huge opportunity being driven by domestic demand across applications like sensors, logic chips, and analog devices,” said Tarun Pathak, Research Director at Counterpoint. “Local sourcing is already happening in a significant way. It accounted for around 10 per cent of the overall market in 2022.”

The Semicon India Programme, which has an outlay of about $10 billion, funds 50 per cent of the semiconductor manufacturing project costs with 2.5 per cent of the budget earmarked for R&D, skill development, and training, according to a report by Invest India, the National Investment Promotion and Facilitation Agency, India Semiconductor Mission (ISM), and Counterpoint Research that came out on Tuesday.

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