How will the Semiconductor Sector Manoeuvre its Way in 2024?



The semiconductor industry is a vital cog in the global economy, as semiconductors underpin a wide range of products manufactured through silicon wafers and semiconductor equipment that permeate our daily lives. However, the semiconductor sector 2024 is expected to drive exponential growth through silicon carbide semiconductors. According to reports, the global semiconductor market is expected to grow from 2024 to 2033 ~11.9 percent, valued at $664.2 billion in 2023.

According to reports, with global demand for artificial intelligence (AI) and high-performance computing (HPC) exploding alongside stabilizing demand for smartphones, PCs, infrastructure, and resilient growth in the automotive industry, the semiconductor industry is expected to usher in a new wave of growth. Semiconductor products include logic integrated circuits (ICs), analog ICs, microprocessor and microcontroller ICs, and memories.


“Memory manufacturers' tight control of supply and output has led to price increases since early November, and demand for AI across all major applications will drive the overall semiconductor sales market to recover in 2024. The semiconductor supply chain, including design, manufacturing, packaging, and testing, will say goodbye to decline in 2023,” says Galen Zeng, senior research manager, Semiconductor Research, IDC Asia/Pacific.

The Semiconductor Sales Market Expected Recover in 2024 

The supply chain destocking process continues due to weak market demand. Although there are some sporadic short orders and quick orders in the second half of 2023, it is still difficult to reverse the 20 percent annual decline in the first half, so the semiconductor sales market is expected to decline by another 12 percent in 2023. The memory market is expected to experience a recession of more than 40 percent in 2023. In 2024, the effect of reduced production on increasing product price, along with increasing penetration of high-value HBMs, is expected to drive market growth. With the gradual recovery of smartphone demand and strong demand for AI chips, IDC expects the semiconductor market to return to a growth trend in 2024 with an annual growth rate of over 20 percent.

ADAS (Advanced Driver Assistance System) & Infotainment Drive Automotive Semiconductor Market Development

Although the growth of the automotive market has remained resilient, the trend of automotive intelligence and electrification is clear and is an important driver for the future semiconductor market. ADAS accounts for the largest share of the automotive semiconductor market with a compound annual growth rate (CAGR) of 19.8 percent until 2027, accounting for 30 percent of the automotive semiconductor market this year. Infotainment accounts for the second largest share of the automotive semiconductor market, with a CAGR of 14.6 percent to 2027, accounting for 20 percent of the market this year, driven by automotive intelligence and connectivity. Overall, more and more automotive electronics will rely on chips, which means that demand for semiconductors will be long-term and stable.

Initiatives Undertaken by the Government for Electronic Systems Design and Manufacturing

Recognizing the need to reduce India's dependence on imported semiconductors, the Ministry of Electronics and Information Technology has unveiled a $10 billion commitment to the Indian Semiconductor Mission (ISM), underscoring the government's ambition to engage with the semiconductor industry. The investment includes funding, manufacturing incentives, and a Design Linked Incentives (DLI) program designed to support emerging Fabless startups in creating products for domestic and international markets.

In addition, to involve global firms in the manufacturing of electronic goods, the government has extended the PLI scheme to them. As a result, US firm Micron Technology reportedly confirmed on June 22, 2023, a plan to invest $825 million in a two-phase semiconductor assembly test facility in Sanand, Gujarat, with a total investment of $2.75 billion, including government incentives. According to the PLI scheme and India’s Ministry of External Affairs, the India-EU Memorandum of Understanding on Semiconductors was reached ahead of the virtual meeting of the India-EU Trade and Technology Council. The MoU aims to increase the resilience of the semiconductor value chain in India and the EU and covers collaboration in broad areas, including research and innovation, talent development, partnerships, and market intelligence exchange. India's foray into semiconductor manufacturing holds significant promise for various industries, including automotive, telecommunications, and medical devices. The move is expected to transform India's semiconductor sector, simultaneously leading to the creation of many high-tech and construction jobs, it pointed out.

India Will Boost Contribution to Global Growth by 2028

With India's economy a key contributor to the outperformance of Asian economic growth, the broad-based recovery in demand is at odds with weakness outside Asia, according to reports.

Benefiting from a combination of cyclical and structural tailwinds, India is expected to contribute 16 percent to global gross domestic product (GDP) growth in 2023-24. In recent months, a wide range of indicators suggests that India's recovery is strong, broad-based, and well-positioned to sustain growth above 6 percent.


India is highly dependent on imports for its semiconductor needs. India imports 95 percent of its semiconductors from countries like China, Taiwan, South Korea, and Singapore. Multiple factors are contributing to the growth of the Indian electronics and semiconductor market. These include the escalating demand for electronic products in the country, the government's emphasis on developing a strong semiconductor manufacturing ecosystem, and the growing demand for semiconductors in the automotive, medical, industrial, and consumer industries, with rapid growth expected in India. Export opportunities for US companies exist in the areas of embedded design, innovation, and systems and further along the value chain in artificial intelligence, the Internet of Things, cloud computing, and cyber security.

While the PLI programs are aimed at attracting large investments across manufacturing sectors, they will also improve capacity utilization, increase gross manufacturing value added, and boost sales in 13 key sectors, leading to an overall increase in exports. These schemes are expected to lead to a new investment inflow of nearly $ 50 billion, with an increase in output of around $ 500 billion over the next five years. The growth led by PLI schemes will be most pronounced in electronics, pharma, automotive, batteries for advanced chemical cells (ACC), solar energy, and white goods (home appliances), with a cascading multiplier effect on other sectors over the next five years. PLI programs, along with foreign direct investment policies and new free trade agreements, will further incentivize companies to increase export-oriented production.

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