Introduction:
The global semiconductor market is on track to soar from $600 billion to $2 trillion by 2032, and India is set to play a pivotal role in this expansion. With an impressive 20% share in global chip design, India’s no longer just a service hub—it’s becoming a major player in semiconductor production.
According to Krishna Bodanapu, Executive Vice Chairman and MD of Cyient, the country’s growing capabilities in chip design make it a key driver in the industry’s next phase of growth.
As demand skyrockets, India’s positioning itself to lead in innovation and chip production in the semiconductor sector.
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Quick Overvwiew: Why This Matters
Global semiconductor market to triple from $600 billion to $2 trillion by 2032.
India holds 20% of global chip design talent, making it a key contributor in design-led innovation.
Cyient launches semiconductor arm with $100M investment to tap into India’s design and engineering expertise.
Domestic demand soars with EVs, smart meters, and 5G infrastructure pushing chip requirements.
Government incentives and policy frameworks accelerating India’s semiconductor ambitions.
Global Semiconductor Boom: A Shift in the Tech Economy
The semiconductor industry is undergoing a structural shift. Post-pandemic supply chain disruptions and geopolitical tensions—particularly between the U.S. and China—have forced countries and companies to rethink chip dependency.
In this high-stakes global reset, semiconductor fabs (fabrication plants) and design centers are now seen as critical national infrastructure.
The U.S. has passed the CHIPS and Science Act with $52 billion in subsidies, while the European Union’s Chips Act mobilizes over €43 billion. China, Taiwan, and South Korea continue to invest heavily.
But the spotlight is increasingly shifting to India—not as a cheap labor destination, but as a center of chip design and next-generation innovation.
India’s Semiconductor Strength Lies in Design
India doesn’t yet have a commercial-scale fabrication plant, but it plays a critical role in semiconductor design and verification, two stages that account for over 30% of a chip’s lifecycle value. According to estimates, more than 20% of the world’s semiconductor design talent is based in India, and most global chipmakers—including Intel, Qualcomm, Nvidia, AMD, and Texas Instruments—operate R&D centers in cities like Bengaluru, Hyderabad, and Noida.
Bodanapu explains:
“India is more than ready in terms of semiconductor production capability—especially in design. We already contribute about 20% of the global design effort.”
Cyient Bets Big: $100M Semiconductor Subsidiary Launched
To capitalize on this momentum, Cyient, a global engineering and digital technology firm, has spun off a dedicated semiconductor subsidiary: Cyient Semiconductors.
With an initial investment of $100 million, the new venture will focus on high-value, high-performance chip solutions. It will serve industries with increasing semiconductor demand, including:
- Electric and autonomous vehicles
- Industrial automation
- Smart grids and utilities
- Data centers and server systems
Unlike traditional IT services, semiconductor development requires long gestation cycles, significant capital investment, and robust IP (intellectual property) creation. Bodanapu says that separating the semiconductor unit allows Cyient to allocate resources independently, build a focused leadership team, and pursue deep-tech innovation without impacting the parent company’s financials.
“Semiconductor development needs upfront investment in engineering, IP, design, and prototyping. Structuring it as a separate business helps manage risk and track performance transparently.”
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Tailwinds: EVs, Smart Meters, and 5G Drive Domestic Demand
India’s domestic demand for chips is also soaring. Several drivers are at play:
India’s EV market is growing fast. It’s expected to reach 10 million annual sales by 2030. The growth rate is a strong 49% CAGR from 2022 to 2030. Each EV uses hundreds of chips for battery, powertrain, and sensors.
The Smart Meter National Programme plans to install 250 million meters. This makes the utility sector a big chip consumer.
India’s 5G rollout aims for full coverage by 2026. It will need chips for base stations, antennas, and edge devices.
ISRO and DRDO lead India’s space and defense push. Both want local chip solutions to cut import reliance.
techovedas.com/from-china-to-chennai-how-trumps-tariffs-are-shaping-indias-tech-manufacturing-future
India’s Policy Push: Building the Silicon Backbone
India’s semiconductor ambition is backed by a proactive policy framework. In December 2021, the Indian government launched the Semicon India Programme, allocating ₹76,000 crore (approx. $10 billion) to support semiconductor manufacturing and display fabs.
Key initiatives include:
- PLI Scheme for Semiconductors: Offers up to 50% fiscal support for semiconductor fab projects.
- Design Linked Incentive (DLI) Scheme: Aims to nurture 100 domestic chip design startups.
- India Semiconductor Mission (ISM): A specialized body under the Ministry of Electronics and IT (MeitY) to drive strategic initiatives.
Several global players have responded:
- Micron Technology announced a $2.75 billion chip assembly and testing plant in Gujarat (2023).
- Tata Group plans to set up a $90 billion electronics and semiconductor ecosystem, including a potential chip fab.
- Tower Semiconductor and Foxconn have also explored partnerships for chip manufacturing in India.
techovedas.com/from-china-to-chennai-how-trumps-tariffs-are-shaping-indias-tech-manufacturing-future
Talent Is India’s Biggest Asset
According to the Indian Electronics and Semiconductor Association (IESA), India produces over 250,000 engineers every year in electronics-related disciplines. With growing awareness and government support, more of this talent is moving into VLSI (Very Large Scale Integration), embedded systems, and chip design roles.
Bodanapu emphasizes:
“We have some of the world’s finest engineers. The challenge is to shift them from service roles to product ownership—building end-to-end solutions, not just working for MNCs.”
techovedas.com/7-key-drivers-of-thriving-global-semiconductor-market
IPO? Not Yet. Focus Is on Execution and Scale
When asked about IPO plans for Cyient Semiconductors, Bodanapu clarified that their priority is not fundraising—but scaling operations and proving value. The company will consider going public only once the business matures and reaches steady performance.
“This is a once-in-a-lifetime opportunity. We are committed to building a high-quality, high-impact business before considering an IPO.”
Conclusion: India’s Semiconductor Ascent Is Just Beginning
The global semiconductor industry is booming, and India is quickly emerging as a key player. Once known mainly for tech services, India is now making waves in chip design and innovation.
With world-class talent, growing local demand, strong government support, and bold moves by companies like Cyient, India’s chip ambitions are becoming reality. As the global market heads toward $2 trillion, India’s gearing up not just for design—but for semiconductor chip manufacturing, packaging, and IP-led development too.
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