India’s Hardware, Semiconductor, And Embedded Industry: One Of The Fastest Growing Sector In India

By Author: TechSagar
Total Articles: 9
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The Indian Hardware, Semiconductor, and Embedded (HSE) industry has been shaping up remarkably, with the increasing production of consumer electronic products. The electronics system Industry in India is contributing significantly to India’s GDP. India is emerging when it comes to the research & development, production, and consumption of next-generation products and technologies. The Indian HSE industry is expected to grow at a rapid pace in the next decade owing to the increase in demand for emerging tech (AI, IoT, 5G, etc.) products, coupled with consistent spending on R&D and competition among key players. Also, India is witnessing a surge in the number of projects on smart city, 5G roll out, cloud, etc., which subsequently boosts the demand for IT hardware, IoT, semiconductor components, etc.

Electronic manufacturing is playing a vital role in making India a manufacturing hub. India has become one of the preferred locations for electronic manufacturing, for instance, in 2020 Union Minister, Mr. Ravi Shankar Prasad stated[1] that “India has emerged as the 2nd largest mobile phone manufacturer in the world”, ...
... from 2 mobile manufacturing facilities in 2014 to more than 200 mobile manufacturing facilities in 2020. Also, in August 2020, HP started a PC manufacturing operation in Chennai in a collaboration with Flex (an electronic contract manufacturer). The growth in the electronic manufacturing sector is majorly attributed to the ‘Make in India’ initiative, owing to which India has witnessed huge investment by the global players.

Semiconductor components are the backbone of every electronic product ranging from a small fitness band to big machinery or EV/ADAS vehicles. The Indian semiconductor industry includes only chip designing, as India lags in terms of wafer manufacturing. India has developed wide expertise in chip designing and technical services related to microchip design, this is accomplished by the presence of global semiconductor companies in India. India has several state-of-the-art R&D centers of global semiconductor companies that focus on chip design coupled with a limited number of fabless start-ups.

There have been a lot of initiatives from the Indian Government and other enterprises to set up fab manufacturing in India. However, there are several challenges associated with fab manufacturing in India such as ‘huge capital investment’, ‘lack of infrastructure’, ‘lack of talent pool’, and ‘intense competition’ from neighbouring countries such as China, Taiwan, Vietnam, etc. Also, a fab manufacturing facility requires a continuous supply of gallons of water for production, high OPEX, uninterrupted electricity supply, and the need for adoption of changing technologies in the semiconductor industry.

The Indian Government is working very proactively in making India a semiconductor hub. For instance, in December 2020, MeitY issued an expression of interest[2] for setting up a fab manufacturing facility in India or the acquisition of semiconductor FABs outside India. Also, in March 2021, the Indian Government announced[3] to provide a $1 billion incentive to each semiconductor company if they set up a fab manufacturing facility in India.

There are many opportunities for Hardware, Semiconductor, and Embedded system manufacturers in India, with the growing digitalization among the BFSI, healthcare, automotive, manufacturing, etc. sectors, the electronic/digital products are also anticipated to increase at a very rapid pace, which further increases the demand for hardware, semiconductor, and embedded systems. For instance, the manufacturing industry is moving towards industry 4.0, which subsequently boost the demand for hardware, semiconductor, and embedded systems for robots, data center, IIoT, AR/VR products, etc.

To know more about Hardware, Semiconductor and Embedded market, please read TechSagar, whitepaper on ‘Developments in Hardware Semiconductor and Embedded market in India’ to look into some of the recent actions taken by the Government and how that is impacting the HSE market: https://www.techsagar.in/whitepapers
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