The global semiconductor industry is projected to reach US $1 trillion by 2030, driving innovation across artificial intelligence, electric mobility, advanced communications, and industrial automation. Amid this transformation, India’s role is shifting from participation to contribution. Once regarded primarily as a major consumer of electronic devices, India is now positioning itself as an emerging centre for semiconductor design, manufacturing, and advanced packaging. This is supported by policy reforms, infrastructure development, and a maturing ecosystem of local and global players.
A market on the move
India’s semiconductor market (meaning the end-use consumption of chips and devices) was estimated at around US $54 billion in 2025 and is projected to grow to roughly US $100-110 billion by 2030. This strong growth is being driven by escalating demand in smartphones, 5G infrastructure, electric vehicles (EVs), IoT/IIoT devices, data-centres and industrial electronics. As Indian OEMs and system integrators proliferate, the need for sensors, analog/mixed-signal chips, power devices and advanced packaging is growing.
Government strategy and incentives
Recognising both the opportunity and the dependency risk of importing more than 90 % of its semiconductor needs, India launched the India Semiconductor Mission (ISM) — a national programme designed to strengthen domestic manufacturing, design, R&D, and supply-chain resilience.
Through the ISM and related initiatives such as the Production-Linked Incentive (PLI) and Design-Linked Incentive (DLI) schemes, the government offers targeted incentives to companies investing in the semiconductor value chain. These incentives cover a wide range of activities including the establishment of semiconductor fabrication plants (fabs), assembly, testing, marking, and packaging (ATMP) facilities, and Outsourced Semiconductor Assembly and Test (OSAT) operations.
Further support is being provided for equipment manufacturing, materials development, and associated services that enable a full manufacturing environment. Complementary efforts also include infrastructure upgrades, skills-training programmes, and the creation of state-level electronics and semiconductor parks to attract private investment and global partnerships.
Manufacturing and supply-chain evolution
Although India has been strong in chip design and embedded systems for years, fabricating advanced nodes and full manufacturing infrastructure has been slower to develop. There are several major developments to highlight:
• Approvals for large-scale chip manufacturing units (fabs) and ATMP/OSAT facilities worth multi-billion dollars.
• The recognition that India cannot yet compete at the most advanced leading-edge nodes (e.g., < 5nm) but can build
competitive strength in mature/legacy node fabs, chiplets, power/analog, OSAT and packaging, especially serving automotive, industrial and IoT markets.
• India’s strong talent pool in software, embedded systems and design services, which provides a foundation for growth into more advanced electronics manufacturing.
• The potential for India’s MSME network (chemicals, specialty gases, precision equipment, materials) to contribute to a broader supply-chain (equipment, materials, services), is beyond just turn-key fabs.
Opportunities and strategic areas
For companies in precision electronics, measurement and instrumentation (such as VPG Foil Resistors), the Indian semiconductor transformation offers several opportunities:
- Growth in automotive semiconductors (EVs, ADAS, sensors) means demand for precision components, calibration/ATE systems and high-stability resistors.
- Expansion in industrial IoT, data-centres, telecommunications translates into more test and measurement equipment, power modules and packaging, which are areas where precision and reliability matter.
- Local manufacturing of ATMP/OSAT and packaging reduces device cost, supply-chain risk and lead times. This benefits components suppliers in the supply network.
- The localisation wave, supported by domestic content requirements, PLI incentives, and state-level electronics parks, favours local suppliers capable of meeting stringent demands for precision, reliability, and traceability.
Challenges to navigate
Despite the momentum, several challenges remain:
- Building full semiconductor manufacturing (especially advanced node fabs) is capital-intensive, with long lead-times, high technology risk and global competition.
- Infrastructure requirements (ultra-pure water, stable power supply, clean-room ecosystem and logistics) must be scaled.
- Skilled manpower at the fab/packaging level is still developing; training, labs and practical experience must catch up.
- Supply-chain localisation takes time; many upstream materials or tools are still imported, limiting full self-sufficiency of the value chain.
- Given rapid technology cycles (chiplets, advanced packaging, heterogeneous integration), staying ahead of global technology curves is critical.
Implications for component and measurement suppliers
For a company like VPG Foil Resistors, the tailwinds are clear. As India builds more semiconductor/packaging/test capacity, suppliers of precision resistors, calibration modules, instrumentation and measurement systems will play a critical role. The move towards high-reliability test systems, power electronics for EVs, aerospace/defense applications and next-gen packaging (e.g., chiplets) demands components that offer ultra-low drift, high stability and traceability, which are strengths of precision foil resistors.
In parallel, Indian test-and-measurement OEMs may increasingly source locally, offering opportunities for establishing or growing partnerships, and local manufacturing or regionalised supply. The localisation push may favour suppliers who can provide documented reliability, relevant certifications and strong support. This is especially in a market transitioning from pure consumption to full value-chain participation.
What lies ahead — 2030 and beyond
By 2030, India’s semiconductor market is expected not only to be a large consumer, but also a substantial manufacturing and design hub. It is plausible that India will contribute to global supply-chains in ATMP/OSAT, chip packaging, mature-node manufacturing, and perhaps niche advanced nodes or chiplets. The scale of domestic demand (EVs, IoT, telecom, consumer electronics) will continue to provide a strong base. As such, global semiconductor companies are expanding their presence in India, both in design/R&D and manufacturing.
For measurement and precision-component suppliers, the key questions will be: how to engage with the Indian ecosystem early, align with localisaton requirements, partner with domestic test/ATE suppliers as well as to ensure that product reliability and support match India’s evolving needs.
Final thought
The future of the semiconductor industry in India is being designed today. For every fab that is approved, every design facility that is opened and every supply-chain link that is strengthened, the opportunity for component and instrumentation suppliers expands. However, one question remains:
In a world where supply-chain resilience, controlled lead times, and technological self-sufficiency are becoming the new competitive advantages, how prepared is your component-supply strategy to support an India-based semiconductor industry framework, and will you be part of building that independent value chain?
