[Promising Sectors for Entering India ③] India’s Electronics & Semiconductor Industry: Shifting from ‘Planning’ to ‘Execution’

"Reality of India's Electronics/Semiconductor Market: Opportunities for Korean Firms and Strategic Synergy"

If India was once known as a country that was "great at semiconductor design but struggled with manufacturing (Fab)," the reality in 2026 has completely shifted. In the third installment of our series on promising sectors in India, we look at the realistic opportunities and strategies for India—the biggest beneficiary of the 'China+1' strategy—as it transforms into a global electronics manufacturing hub. 1. India: No Longer an 'Assembly Line,' but a True Manufacturer Smartphone Exports: Surging Beyond Expectations As of the 2026 fiscal year, India’s smartphone exports exceeded ₹1 trillion ($12B+ USD) in just five months—a staggering 55% increase year-on-year. More importantly, India has overtaken China as the #1 exporter of smartphones to the U.S. (with a 44% market share). India is no longer just "assembling"; it is actively supplying "Made in India" smartphones to the global market. The First 'Fabs' are Officially Running The Dholera region in Gujarat is now home to India’s first full-scale semiconductor plant. The Tata – PSMC joint venture is a 12-inch fab focusing on 28–90nm Mature Processes , targeting a monthly production of 50,000 wafers by the end of 2026. Additionally, Micron’s ATMP (Assembly, Testing, Marking, and Packaging) facility is fully operational, shipping memory packages manufactured right in India. India has evolved from a design-only nation to a comprehensive manufacturing hub covering both Front-end (Fab) and Back-end (Packaging) processes. 2. Why is this a Golden Opportunity for Korean Companies? Focus on Mature Process → A Perfect Match for Korean Material/Component/Equipment (MCE) Firms Indian fabs are currently focusing on 28–90nm Mature Processes —technologies where yields and performance are highly stabilized. This is the "sweet spot" for Korean mid-sized enterprises specializing in specialty gases, chemicals, CMP (Chemical Mechanical Polishing) slurry, metal wiring materials, and OSAT components. The demand in India perfectly aligns with Korea’s industrial strengths. Top-Tier Design Talent + Korean Manufacturing Prowess India boasts some of the world’s best semiconductor design talent. The government is also aggressively supporting EDA tools and Design Linked Incentives (DLI). By combining India’s R&D capabilities with Korean manufacturing know-how , companies can create a synergy that drastically shortens the cycle from design to mass production. Growth of EMS (Electronics Manufacturing Services) With the explosion of smartphone exports, the Indian government is shifting incentives (PLI 2.0) from simple assembly to component localization . This creates a massive entry point for Korean firms to serve as primary suppliers for parts, modules, and materials. 3. Where to Head? (Regional Breakdown) Region Key Characteristics Advantageous Sectors for Korean Firms Gujarat The heart of India’s semiconductor push (Dholera, Sanand). Semiconductor materials, parts, equipment, and packaging materials. Tamil Nadu The hub for Apple/Foxconn. Excellent port infrastructure. Smartphone/Appliance parts, mechanical components, cameras, and batteries. Uttar Pradesh HCL-Foxconn fab approved (2027 target). Near Delhi (NCR). Mid-sized semiconductor/electronic components and design R&D. 4. Realistic Risks to Consider Cost & Supply Chain Hurdles India still faces challenges in cost competitiveness compared to China or Vietnam. Local component sourcing for smartphones is currently around 18%, meaning many core parts still rely on imports. Setting up local joint ventures is often a recommended path to mitigate this. Infrastructure Volatility (Power & Water) Semiconductor production is hyper-sensitive to power quality. Essential safeguards like redundant power systems , UPS (Uninterruptible Power Supply) , and ultra-pure water (UPW) facilities are mandatory investments for any plant. Initial Reliance on Foreign Talent There is a temporary 2–3 year gap before enough local engineers are trained for specialized semiconductor equipment and processes. Expect to rely on experts from Korea, Taiwan, or the U.S. during the initial phases. 5. Practical Strategies for Success For MCE (Material, Component, Equipment) Companies: Establish supply hubs near Gujarat (Dholera/Sanand). Secure Long-Term Agreements (LTA) from the sampling stage with Fabs/OSATs. Focus on items where "time/temperature/purity" management is critical (Gases, Chemicals, Quartz parts). For Electronic Component/Module Companies: Build local supply hubs in Tamil Nadu or Karnataka (the smartphone meccas). Actively utilize PLI 2.0 incentives for "Component Localization." For Design + Manufacturing Integrated Firms: Establish R&D centers that pair Indian design talent with Korean manufacturing expertise. Leverage government DLI programs (support for EDA and Multi-Project Wafers). Closing Thoughts In 2026, India’s electronics and semiconductor industry is no longer a "future plan" or a policy slogan. It is a reality backed by running f