In this article, you will know what is a semiconductor and global semiconductor industry market size.
What is semiconductor
A semiconductor is called such components which are needed in every electronic item such as TV, AC, mobile, laptop, refrigerator, washing machine, car, airplane, etc. A semiconductor is used in all electronic items. Even solar cells are also made of semiconductors.
The reason behind the use of semiconductors is that semiconductors can act as both insulators and conductors, so the flow of electrons through the semiconductor is controlled.
So if there are no semiconductors, then the current in electronic items cannot be controlled, due to which electronic items will not be able to function properly and this is the reason for which semiconductors were invented.
Generally, semiconductors can be made from Silicon, Germanium, and Gallium Arsenide materials but most of the semiconductors are made from silicon because silicon is stable even in high temperatures and silicon is the most found element after oxygen in the earth.
It is found in soil and rock to natural water, trees, plants, etc. So there is no shortage of silicon in the earth, so silicon is used to make semiconductors.
But setting up a semiconductor manufacturing plant is not that easy, it requires very high investment and critical infrastructure.
To run just one manufacturing plant, up to 4 million gallons of ultra-pure water, zero failure electricity, specialized gas, and chemicals are required daily and manpower is also required for this.
This setup can be done with the recently launched PLI scheme by the Indian government and there is no shortage of manpower in India.
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Global semiconductor industry market size
According to the Semiconductor Industry Association report, the global sales of Semiconductor in 2022 could exceed $600 billion.
The Tata Group and Reliance Industries have a total market cap of less than $600 billion while Taiwan Semiconductor Manufacturing Company, the world’s largest chip manufacturing company, has a higher market cap. And this company has a 54% market share of Semiconductor.
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Semiconductor market share in India
India also imports 100% of semiconductors and spends US$ 24 billion every year and its demand is expected to reach US$ 100 billion by 2025.
So till now, semiconductors were not being made in India, but since the semiconductor shortage, the attention of the government and some big companies has gone towards this industry.
And now the government has launched a 10 billion dollars (Rs 76000 crore) production linked incentive (PLI) scheme, which will be invested in setting up the semiconductor industry in the next 4-5 years.
Along with this, the government will also provide infrastructure (ultra-pure water, zero failure electricity, specialized gas, and chemical) to the company to manufacture semiconductors in India.
Taiwan which is the world’s largest semiconductor manufacturer, the government there also bears 50% of the equipment cost. So the Indian government will also provide the same support.
Apart from this, India has also signed a deal with Taiwan for $ 7.5 billion to transfer the technology to set up the chip plant.
These chips can be used from 5G devices to electric cars, so from all these steps, the government feels that local production of semiconductors can be started in India in the next 2-3 years.
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This article is only for education purpose and the author has his own views and research, so if you invest in these stocks then do it at your own risk and do the research yourself before investing.
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A semiconductor is called such components which are needed in every electronic item such as TV, AC, mobile, laptop, refrigerator, washing machine, car, airplane, etc. The reason behind the use of semiconductors is that semiconductors can act as both insulators and conductors, so the flow of electrons through the semiconductor is controlled.
According to the Semiconductor Industry Association report, the global sales of Semiconductor in 2022 could exceed $600 billion.
India also imports 100% of semiconductors and spends US$ 24 billion every year and its demand is expected to reach US$ 100 billion by 2025. And now the government has launched a 10 billion dollars (Rs 76000 crore) production linked incentive (PLI) scheme, which will be invested in setting up the semiconductor industry in the next 4-5 years.