India imported nearly US$ 7 bn of semiconductors in 2013, based on demand from the telecom mobility, computing and consumer (electronics) segments. Continuing to grow at 14% CAGR and driven by the same growth segments, India’s semiconductor import bill will reach up to US$ 20 bn by 2020. The GOI forecasts that overall electronics import (semiconductor costs are about 10%-15% of overall equipment costs) could exceed that of crude oil by then. As a result, as part of the recent announcement of “Make in India” program announced by the Honourable PM, this project has been identified as one of national importance with the full support of the Government, including the PMO.
Given the current import of chips into India, HSMC believes that the domestic market offers a significant import substitution opportunity. There are numerous semiconductor products suited to the Indian market - wireless ICs for cell phones, 3/4G-LTE based stations, Wi-fi, broadband, set top boxes, control systems, broadcasting digitization, automotive electronic products, power generation, PLC Controllers, solar panel control devices, electronic cards, mobile phone SIM cards, citizenship cards, smart cards, e-passports and set top enabler cards. Most of these programs are part of the GOI’s recently announced Digital India and Make in India programs.