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India’s Semiconductor Demand Set to Reach $108 Billion by 2030: UBS
India is expected to witness a massive surge in semiconductor demand, with the market projected to reach $108 billion by 2030, according to a report by UBS, a global financial services firm. This growth will be driven largely by India’s increasing use of electronics, a growing electric vehicle (EV) industry, and the rapid expansion of digital infrastructure like data centers.
Strong Growth Ahead for India's Chip Market
UBS projects that India’s chip demand will grow at an impressive 15% compound annual growth rate (CAGR) between now and 2030. The country’s semiconductor consumption was estimated to be around $33 billion in 2023, showing how quickly the market is expanding.
The key sectors fueling this demand include:
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Consumer electronics (smartphones, tablets, TVs, and laptops)
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Electric vehicles (EVs) and automotive electronics
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Data centers supporting cloud computing, AI, and digital services
UBS says these sectors will need more advanced chips, increasing India’s share in the global semiconductor demand.
India Is Still Dependent on Imports
Despite the growing demand, UBS highlights that India currently imports nearly all of its semiconductors. This heavy reliance on foreign supply chains exposes the country to global chip shortages and price fluctuations.
To reduce this dependence, the Indian government has launched multiple incentives under its semiconductor policy. These include financial subsidies, infrastructure support, and partnerships with global players to attract chip-making investments.
Local Chip Manufacturing Is Still in Early Stages
While India’s ambition to become a major semiconductor hub is strong, UBS says the journey is just beginning. Several companies have announced plans to build chip fabrication units in India, including:
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Micron Technology – investing in a memory packaging and testing facility in Gujarat
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Tata Group – exploring chip manufacturing with global partners
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Tower Semiconductor – considering setting up a fabrication unit
However, UBS notes that setting up a chip fabrication facility, or "fab," is highly complex. It involves huge capital investments, advanced technical skills, and a reliable supply chain. Even if plants are approved and construction begins, it may take several years before they become fully operational.
A Strategic Opportunity for India
India’s growing domestic demand, combined with global interest in diversifying semiconductor supply chains, puts the country in a strategic position. With many companies looking to shift production away from China and Taiwan, India could emerge as a key alternative destination.
UBS believes that if India manages to scale up its chip manufacturing and infrastructure, it could play an important role in the global semiconductor value chain over the next decade.
