How India’s Semiconductor Growth Will Drive Job Creation in IoT and AI in 2025
- Chinmay
- January 28, 2025
- India, Semiconductor Industry
- AI semiconductors, automotive semiconductors, edge computing, India semiconductor mission, quantum computing, Semiconductor Industry, semiconductor trends 2025, sustainable manufacturing
- 0 Comments
The semiconductor industry is at the heart of technological progress, driving innovations in artificial intelligence (AI), 5G, and the Internet of Things (IoT). By 2025, the global semiconductor market is projected to surpass $1 trillion, according to McKinsey. India, with its strategic initiatives and growing infrastructure, is positioning itself as a major global player. Here’s a look at the key trends and developments shaping the future of semiconductors globally and in India.
Global Highlights
- Revenue Growth: The semiconductor industry rebounded from pandemic-related disruptions with a growth rate of 7% (source: Gartner).
- Investments: Initiatives like the U.S. CHIPS Act and Europe’s Chips Act bolstered innovation and self-reliance.
- Supply Chain Diversification: Efforts to reduce reliance on single-region manufacturing hubs gained momentum.
India’s Progress
India’s semiconductor ecosystem grew significantly in 2024. Highlights include:
- India Semiconductor Mission (ISM): This initiative attracted investments from Vedanta-Foxconn and Micron Technology.
- Infrastructure Development: The establishment of semiconductor parks in Karnataka and Gujarat laid the groundwork for manufacturing.
- Industry-Academia Collaboration: Partnerships with institutions like IITs and IISc fostered talent development and research.
Technological Innovations Shaping the Industry
AI, IoT, and Edge Computing
The growing demand for AI and IoT applications is driving innovation in specialized semiconductors like AI accelerators and application-specific integrated circuits (ASICs). Gartner predicts that by 2025, 75% of enterprise-generated data will be processed at the edge, necessitating advanced chip designs.
3D Chip Architecture and Advanced Nodes
Technologies like 3D chip stacking and sub-5nm nodes are revolutionizing performance and energy efficiency. Leaders like TSMC and Samsung are spearheading these advancements, with Indian startups collaborating on scalable solutions.
Quantum Computing
Quantum computing is emerging as a key frontier, offering immense computational power. India’s National Quantum Mission is fostering R&D for quantum-ready semiconductors, marking the country’s entry into this niche but transformative domain.
Manufacturing and Supply Chain Trends
Global Perspective
Geopolitical tensions and supply chain vulnerabilities are prompting countries to localize production. The U.S. and Europe have allocated billions through their respective CHIPS Acts to strengthen domestic manufacturing capabilities.
India’s Approach
India is incentivizing semiconductor production with its $10 billion Production Linked Incentive (PLI) scheme. Key developments include:
- Investments by Vedanta and Foxconn: These facilities aim to position India as a manufacturing hub.
- Global Partnerships: Collaborations with Micron Technology and Applied Materials are fast-tracking supply chain capabilities.
2025: Trends to Watch
- Expansion of AI-Driven Semiconductors: The rise of generative AI and machine learning will drive demand for high-performance, energy-efficient chips tailored for AI applications.
- Growth in Automotive Semiconductors: As electric vehicles (EVs) and autonomous technologies gain traction, demand for automotive-grade chips like power management ICs and sensors will surge.
- Sustainability in Manufacturing: Environmental concerns will lead to the adoption of eco-friendly materials and energy-efficient manufacturing processes.
- Enhanced Localization: Nations and corporations will emphasize local production to reduce geopolitical risks, with India playing a critical role in this shift.
The Role of Government and Industry
Global Policies
Countries like South Korea and Japan are increasing R&D budgets, while China’s “Made in China 2025” initiative focuses on self-reliance.
India’s Strategy
India’s ISM aims to attract $20 billion in investments over the next decade. Efforts include:
- Fabrication Units: Incentives for setting up fabs and advanced manufacturing facilities.
- Talent Development: Collaborations with academic institutions to build a skilled workforce.
The Future of Semiconductors
The semiconductor industry in 2025 will continue to evolve, driven by breakthroughs in AI, IoT, and quantum computing. India is emerging as a pivotal player, with an ambitious goal of capturing 10% of the global market share by 2030. Strategic investments, public-private partnerships, and international collaborations will be essential for achieving this vision. For businesses and stakeholders, staying aligned with these trends will be key to leveraging the opportunities presented by this dynamic industry.
