Fab Economics has estimated that the consumption of semiconductor devices and components in India will be $ 54 billion (about Rs. 5.17 lakh crore) in 2026 and it is expected to reach $ 130 billion (about Rs. 12.46 lakh crore) by 2030, provided there are continuous incentives and subsidies from the government. It has also been said that by 2035, India can consume semiconductor devices and components worth $350 billion (about Rs 33.54 lakh crore) under this parlay. It is also being said that India can overcome 20 percent of its semiconductor import bill through domestic consumption and revenue from export supplies from India and achieve domestic fabrication and packaging capacity.
Estimates of the cost structure for legacy fabs in India reveal India’s current situation, where more than 85 per cent of fab project costs and almost 50 per cent of wafer manufacturing costs are import dependent. Import dependence could gradually reduce to more than 68 percent of fab project costs and about 30 percent of wafer making costs by 2030 and match the metrics of the world’s semiconductor clusters by 2035, with import dependence reduced to 55 percent of fab project costs and about 18 percent of wafer making costs.
Three incentive packages are needed by 2030
However, it also warned that such a sharp decline in import dependence requires continuity of subsidy packages and a sustained pace of execution and prioritization. This requires three incentive packages ISM 1.0, 2.0, 3.0 by 2030, which will provide a total subsidy of $ 40 billion (approximately Rs 3.83 lakh crore) to the Center and states together and two additional packages ISM 4.0, 5.0, each of which will provide an incremental subsidy of $ 20 billion (approximately Rs 1.92 lakh crore).
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