Growth of the Semiconductor Sector: Industry Soars Amid Global Demand

The growth and development of the semiconductor sector depend on government backing. India is positioned to play a significant role in the global semiconductor supply chain with the approval of numerous semiconductor units. The growth of this sector will help India maintain its technical hegemony, generate jobs, and stimulate the economy. The government authorises Kaynes's bid for chips under the semiconductor plan for Rs 3,300 crore. According to Union Minister Ashwini Vaishnaw, work on all four chip units under the India Semiconductor Mission is moving forward quickly, and a strong ecosystem is developing around the units. The need for skilled labour in the semiconductor sector is increasing, but the supply needs to catch up with the demand. Because of the incredibly competitive labour market, which is only getting tighter, chipmakers are competing more fiercely.

How will semiconductors grow in the future?

Expanding Semiconductor Market by 2024

Industry analysts predict that the global semiconductor market will develop at a compound annual growth rate (CAGR) of 7.64% from 2024 to 2033, reaching around USD 1,137.57 billion. The semiconductor business will increase due to numerous important factors. In 2024, the semiconductor market is expected to generate US$607.40 billion in revenue. The market is dominated by integrated circuits, which are expected to generate US$515.00 billion in revenue by 2024. By 2029, revenue is projected to expand at a compound annual growth rate (CAGR) of 10.06%, reaching a market volume of US$980.80 billion. By 2030, the automotive sector will account for 13–15% of the global semiconductor consumption, up from just 8% in 2021. Merely the demand from the automobile sector would constitute 20% of the industry's growth over this decade. Countries will reduce their chip use as well.

What is the current state of the Indian semiconductor industry?

A significant development in the Indian semiconductor business is the move towards cutting-edge technologies like 5G, AI, and the Internet of Things (IoT). In 2024, the semiconductor market is expected to develop significantly due to rapid technological advancements, rising demand for high-performance computing, and the widespread adoption of digital transformation in multiple industries; according to a survey by TeamLease Degree Apprenticeship, the Indian semiconductor sector is estimated to have a shortage of 250,000 to 300,000 experts across several verticals, including production, design, advanced packaging, and research and development (R&D), by 2027.

Which business is going to produce semiconductors in India?

A few semiconductor stocks in India are Tata Elxsi Ltd., ASM Technologies Ltd., Dixon Technologies (India) Ltd., SPEL Semiconductor Ltd., Moschip Technologies Ltd., Ruttonsha International Rectifier Ltd., HCL Technologies Ltd., and others.

What is the semiconductor industry's prediction?

Furthermore, a recently published WSTS market projection predicts 16.0% and 12.5% annual growth in global sales, respectively, in 2024 and 2025. Concerning revenue, SIA accounts for approximately two-thirds of non-US chip companies and 99% of the US semiconductor sector. The most significant swing element, as is generally the case, was the memory chip market. Memory sales were close to US$130 billion in 2022, or slightly less than 23% of the total chip market; however, in 2023, they fell by 31%, or almost US$40 billion. Sales are predicted to return to 2022 in 2024, with the market receiving nearly all of that. The rest of the industry shrank in 2023, although only roughly 3% of memory is excluded.

End-market sales of PCs and smartphones are predicted to increase by 4% in 2024, followed by 14% and 3.5% reductions in 2023. In the semiconductor sector, it is probably crucial that these two end markets resume growth: Sales of computer and communication chips, which include processors for data centres, accounted for 56% of all semiconductor sales in 2022. The state of the industry can also be determined by looking at inventory and fab utilisation. They were unchanged from the previous year, with more than $60 billion in inventory as of fall 2023. And one of the biggest obstacles to sales in the first half of 2024 will be drawing those down. Furthermore, during the most recent shortfall, utilisation was high—in the mid-90% range—and is predicted to drop below 70% in Q4 2023. For the industry to turn a profit, utilisation probably has to be much greater than that, which might take some time.

What are the main developments in the semiconductor sector?

Indian semiconductor businesses are well-positioned to secure a prominent position in the global market by adopting critical trends, including edge computing, AI and machine learning acceleration, and smaller process nodes. These advancements will propel technical progress and economic prosperity in the future. India's semiconductor sector is poised for unparalleled expansion in the context of a worldwide trend toward supply chain diversification away from China and toward other nations. As competition rises, India has become a prospective competitor in the semiconductor chip business. The country is positioned as a significant player in the global semiconductor scene thanks to its strategic focus on talent development and investment in semiconductor manufacturing, demonstrated by programs like the Indian Semiconductor Mission (ISM).

India's wealth of engineering expertise, advantageous business climate, and government incentives draw considerable attention and investment worldwide for the production of chips and associated infrastructure. The ISM's policy framework and subsidies aim to increase domestic capabilities and decrease reliance on imports by promoting the expansion of semiconductor firms.