How did India's semiconductor industry fare in 2023

Driven by a confluence of factors including industry-friendly policies, geopolitical dynamics, rising customer demands, and a pool of available talent, India's semiconductor sector exhibited promising growth in 2023. Projections from Deloitte estimate that the Indian semiconductor market is poised to reach the $55 billion milestone by 2026. Here are the top highlights from semiconductor industry in India for 2023:

High-value deals and investments

In a significant move, Micron Technology, one of the world's top chipmakers, declared an $825 million investment in India for establishing a semiconductor assembly and testing plant. This announcement coincided with Prime Minister Narendra Modi's visit to the US, and construction for the $2.75 billion plant commenced in Gujarat’s Sanand in September. “Our focus with the India plant was to start with the backend where you have a larger scope for generating employment and begin creating an ecosystem,” said Anand Ramamoorthy, Micron India MD in an earlier interview with TechCircle. 

During the same US-India meeting, semiconductor manufacturing company Applied Materials announced that it would build the Semiconductor Centre for Commercialisation and Innovation in India, while Lam Research committed to training 60,000 Indian engineers in semiconductor technologies.

In July, the India Semiconductor Mission organised Semicon India 2023 in Gandhinagar, where US chipmaker AMD revealed a $400 million investment in India over five years. In a follow-up, AMD launched its largest global design centre in India in November, which can accommodate 3,000 professionals. During the facility's inauguration, IT Minister Ashwini Vaishnaw hinted at the imminent announcement of three more semiconductor chip fabrication units, projecting a cumulative investment of $8-12 billion in the next few months. 

In a media interaction in June, MoS for IT Rajeev Chandrasekhar said that these investments are expected to create 80,000 jobs.

Foxconn-Vedanta JV deal falls through

In what could be considered a setback to the government’s semiconductor mission, the Vedanta-Foxconn joint venture, also among the first entities to apply for the government’s $10 billion semiconductor incentive scheme, fell through this year. In July, the Apple supplier pulled out of the $19.5 billion semiconductor joint venture and said it had ‘determined it will not move forward on the joint venture with Vedanta’.

Post-breakup, Foxconn submitted a new application to establish a semiconductor fab in India, while Vedanta awaits approval for its semiconductor and display fabrication plant, with talks underway for a tech partner.

Modified semiconductor scheme

In May, the government notified that it will be accepting new applications for setting up semiconductor fabs and display fabs. Under the modified programme, fiscal incentive of 50% of the project cost is available to companies and JVs of semiconductor fabs, and a similar incentive is extended to setting up of display fabs of specified technologies. 

To be sure, the government launched the Semicon India Programme in December 2021 with an outlay of ₹76,000 crore for the development of semiconductors and display manufacturing ecosystem in India.