India’s chip market set to surpass those of Europe, Japan

The Indian chip market is likely to be larger than that of Japan and of Europe in 2024 to judge by a recent market research report and sales trends.

The Indian chip market was worth US$45 billion in 2023, according to research from the India Electronics and Semiconductor Association (IESA) and Counterpoint Research reported by the Indo-Asian News Service (IANS). The same work reckons the Indian chip market will grow at a compound annual growth rate of 13 percent over the period 2023 to 2030.

Meanwhile, the Japanese and European chip markets were only slightly larger than India’s chip market in 2023 at US$46.75 billion and US$55.76 billion, respectively, according to World Semiconductor Trade Statistics. Both markets have been contracting year-on-year through the first half of 2024.

India’s manufacture of mobile phones, telecommunications and IT equipment represent about 75 percent of the on-going chip demand, according to the IESA/Counterpoint report, IANS said.

India makes mobile phones

Tarun Pathak, research director at Counterpoint Research, said that the handset sector is the leading force in India’s semiconductor market, playing a crucial role in the country’s digital transformation as more consumers transition from feature phones to smartphones.

“This growth is driven by the increased use of social media, OTT platforms, affordable prices, accessible data, and the expansion of the 5G network. At the same time, India’s IT sector is thriving, supported by pandemic-driven digitalisation and government initiatives like ‘Digital India’ and ‘Make in India’,” the article quoted Pathak saying.

WSTS does not break out the Indian chip market from the larger Asia-Pacific region total, which excludes Japan. The Asia-Pacific market including China was worth US$290 billion in 2023, more than half the US$527 billion global total, according to WSTS.

With the diminishing significance of Europe and Japan as chip markets it may be time for WSTS to start reporting the Indian market separately. WSTS took this step with regard to China in 2007.