Semiconductor upskilling needed for wheel to start moving: Counterpoint Research

India’s policy push to boost the semiconductor ecosystem in the country needs to be accompanied by the development of a strong talent framework and academic curriculums for the outlined policy measures to start translating into palpable outcomes. “We need more PhD graduates going forward, we need to upskill. A strong curriculum around semiconductors needs to be there in India..that needs to be started at a grassroot level. That’s how the entire wheel will start moving,” Tarun Pathak, research director, devices and ecosystems at Counterpoint Research said at Fortune India webinar on ‘How 5G will change the future of business’.

Much of the manufacturing at present is not happening locally. “Overall semiconductor market in India last year was close to $27 billion. We are projecting it will increase to $64 billion by the end of 2026. But the value addition which happens in India is in single-digits,” says Pathak. Creation of value addition will open up new opportunities; for instance the potential to export can be huge given the pace of growth of various contributing sectors. “The categories are growing. We are at 600 million smartphones in a country of 1.4 billion population which means there’s still opportunity for players to grow in this ecosystem. Most of the phones are being assembled in India but the value addition is close to 15% which means we are dependent on other countries when it comes to semiconductors. In terms of wearables, hearables (devices), we are just scratching on top of it. Those make up just about 10% of the assembling done here in India. It is an enormous opportunity,” says Pathak.

Pathak says implementation of the semiconductor policy is a step in the right direction and the willingness of certain homegrown and deep-pocketed conglomerates to support the growth of the semiconductor ecosystem through investments and collaboration with global players has been like an added impetus. Anil Agarwal led-Vedanta and Taiwan-based electronics contract manufacturer Hon Hai Technology Group, also known as Foxconn for instance, has partnered to set up a Rs 1.54 lakh crore semiconductor plant in Gujarat. Another advantage that India can leverage in its quest to become a self-reliant semiconductor hub is its huge local market that will drive a major chunk of the consumption. “If you look at the end equipment, right now that is close to $119 billion and semiconductor content is 23-25% of it. This end user equipment is increasing in double digits and is estimated to increase to $300 billion. That’s how the entire semiconductor content consumption will grow here in India.