Early investors in tier-2 semiconductor hubs to benefit from incentives and lower costs

New Delhi [India], September 11 (ANI): Early investors in India's tier-2 semiconductor sector stand to gain from policy-driven incentives and substantial cost advantages, as Tier-1 hubs face rising saturation and attrition pressures. With long-term scalability in focus, tier-2 cities are becoming essential pillars in India's semiconductor roadmap for the next decade, said Quess Corp Limited in a latest report.

"Early investors in Ahmedabad (ATMP), Mohali (design), Thiruvananthapuram (embedded) will capture policy-driven incentives and cost arbitrage. Tier-2 will become essential to de-risk overdependence on Tier-1 hubs," the report added.

Indicating its intent to diversify the semiconductor industry, the Centre approved four more semiconductor projects under the India Semiconductor Mission (ISM), two in Odisha and one each in Andhra Pradesh and Punjab. These four approved proposals will establish semiconductor manufacturing facilities with a cumulative investment of approximately Rs 4,600 crore and are expected to generate a cumulative employment of 2,034 skilled professionals.

With these four plants, the total number of approved projects under the India Semiconductor Mission (ISM) reaches 10, with cumulative investments of around Rs 1.60 lakh crore in six states.

The report titled "The Chip Catalyst: India's Emerging Semiconductor Ecosystem" added that as global semiconductor supply chains face geopolitical stress--from the US-China tech rivalry to heavy dependence on Taiwan and new CHIPS Acts in the US and EU-- India's Global Capability Centers (GCCs) are emerging as stable hubs for talent, chip design, and downstream ATMP (Assembly, Testing, Marking, and Packaging) integration.

The report projects India's semiconductor market at USD54.3 billion in 2025, with growth expected to touch USD 103.5 billion by 2030 at 13.8 per cent CAGR (Compound Annual Growth Rate), outpacing global benchmarks.

India's semiconductor story is still closely tied to the devices we use every day, including smartphones, laptops, and industrial systems, which collectively account for about 70% of the market. What is changing is the rise of new demand engines: electric vehicles, 5G rollouts, and the rapid buildout of data centres.

With hyperscale capacity expected to grow by more than 75 per cent by 2030 and EVs targeted to make up nearly a third of all new vehicles, the market for advanced chips is set for an unprecedented expansion.

The India Semiconductor Mission is laying the foundation for domestic capability, backed by Rs 1.6 lakh crore worth of projects and close to 29,000 new jobs, the report added.

Alongside this, investments such as Micron's ATMP plant in Gujarat are strengthening packaging and testing depth, while state initiatives in regions like Tamil Nadu, Kerala, and Gujarat are helping Tier-2 clusters emerge as serious semiconductor destinations, it added.

India already has more than 250,000 semiconductor professionals, with 43,000 new postings in 2024-25.

This pool is projected to grow by over 120 per cent to nearly 400,000 by 2030, making India the world's second-largest semiconductor talent hub after the US. The workforce spans design, embedded systems, EDA tool development, and ATMP manufacturing, demonstrating that India is building capabilities across the entire value chain, the staffing firm added.

Bengaluru and Hyderabad currently account for over 80 per cent of India's semiconductor GCC workforce, but over-reliance on these hubs is pushing firms to diversify. Tier-2 cities like Ahmedabad, Mohali, and Thiruvananthapuram are not only attracting new design mandates but are also aligning with EV and industrial clusters, supported by ESDM parks and policy incentives. (ANI)

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