India chip sector to build value over next five years

India's semiconductor ecosystem will likely move through project commissioning, customer qualification and yield stabilisation over the next three to five years. A research report by 360 ONE Capital states that localisation of recurring inputs and higher-value packaging will follow these initial phases.

Market Projections and Investments

India's semiconductor demand is projected to rise from about USD 56 billion in 2025 to more than USD 117 billion by 2030, marking a roughly 16 per cent CAGR. Twelve approved projects under the India Semiconductor Mission represent more than USD 18 billion of investment. The broader ISM 2.0 ecosystem could also catalyse over USD 35 billion of additional investment.

Near-Term Opportunities

Near-term earnings opportunities are likely to emerge across construction, utilities, electronics manufacturing, components, engineering, automation and equipment support. These areas will see benefits before direct fab and OSAT economics become more visible. The report highlights that capacity is being built ahead of proven demand and supplier depth, meaning execution matters more than announcements. Investors should evaluate the theme over a 10 to 15-year horizon rather than as an immediate earnings cycle.

Key Milestones Ahead

The next phase will test whether announced capacity can translate into commercially viable output. Factories must achieve competitive yields, qualify with global customers and operate at scale. Key milestones to monitor include construction and equipment installation, process qualification, yield improvement, customer qualification, volume ramp-up, local supplier content and product mix.