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Semiconductors & Electronics – Upgrading the value chain, Focus on Building ecosystem

ICICIdirect Research 21 Aug 2026 DISCLAIMER

PM Modi highlighted India’s growing semiconductor push with starting of production at 3 semiconductor plants (Kaynes semicon, Micron, CG semi), with 9 more upcoming plants approved under ISM 1.0 and another 5–8 plants expected to come up over the next 7–8 years under ISM 2.0. The government is focusing on building a self-reliant semiconductor ecosystem, which will create a strong multiplier effect across the electronics value chain.  
MEITY (Ministry of Electronics and Information Technology), has recently raised India semi-conductor demand forecast from $100-$110 bn to $150 bn for 2030. Government continues to support semiconductor and electronics space with significant incentives. India Semiconductor Mission (ISM) 2.0, with an outlay of ₹1.27 lakh crore (vs ₹76,000 crore for ISM 1.0) has been recently announced to build the entire ecosystem spanning chip design, manufacturing equipment, materials, specialty chemicals, precision engineering, R&D and talent development. Combination of capital subsidy of broadly 25-40% and PLI incentives are to be given.
Similarly, Mobile Phone Manufacturing Scheme (MPMS), with an outlay of ₹62,500 crore over FY27-31 is mainly focused on components manufacturing and exports. Focus is on increasing domestic value addition from 23–24% to 44–45% by FY31 in mobile category.

 

Key Highlights

Current

Projected

Growth rate

1

India Semi-conductor market

~$50 bn in FY25

$150 by 2030

21.1%

2

Operational chip plants

3 plants

8-11 plants by 2028

+5 to 8 new plants

3

Electronics production

~13.1 lakh cr in FY26

$500 bn+ (47.5 lakh cr+) by FY31

~30% CAGR

4

ESDM industry

~4.5 lakh cr in FY26

$150 bn+ (14 lakh cr+) by FY30

~33%+ CAGR

5

Value addition

18-20% in FY25

35%+ by FY30E

Almost doubling through components manufacturing

Key beneficiaries: Kaynes Technology, Cyient DLM, Centum electronics, ASM technologies, Avalon. Kaynes has already got approval under ISM 1.0 for OSAT wherein ISM 2.0 will support its business as ecosystem develops. Rest of the companies have forayed into semiconductor equipment or its subset to provides electronics system. Dixon is key beneficiary of MPMS, wherein it is investing in components including display, camera, enclosures, etc. which will also position it to foray aggressively in export market.  
The value chain development in semiconductor and electronics space shall benefit the broader ecosystem and other electronics manufacturers including Syrma, Amber enterprises, PG Electroplast, Epack durable as well as consumer durable companies like LG electronics India which could tap export opportunity as ecosystem develops and manufacturing cost reduces

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