Semiconductors play a role not only as components in gadgets, but also in powering the development of modern technologies such as artificial intelligence (AI) and autonomous vehicles, thereby driving innovation.
According to McKinsey & Company, the global semiconductor market will reach $1 trillion by 2030. Focusing on India, the industry is expected to expand from $23.2 billion to $80.3 billion by 2028 with a growth rate of 17.10%, according to Indian government estimates.
It’s more than just a number – it shows the bigger picture of how semiconductors are improving industries, driving innovation, and addressing global challenges.
Here’s a look at what’s shaping the semiconductor industry as we approach 2025.
AI chips are growing in popularity
AI technology has expanded beyond the confines of research labs. It can now be found in devices such as smartphones and smart homes as well as vehicles. Some chip makers are developing hardware to meet the growing needs of AI applications. These chips are not limited to number crunching. They are designed to efficiently process large amounts of data with minimal power consumption. This advancement means a smarter voice assistant, faster image recognition, and a more responsive autonomous system.
Focused on sustainability
The production of semiconductors is not very environmentally friendly as it uses a lot of energy and water resources; However, things are evolving, and companies are now using environmentally friendly materials and processes that save energy and promote recycling efforts to reduce their impact on the environment. Aligns with regulatory requirements and appeals to consumers who prioritize sustainability concerns. Manufacturers see this as necessary to maintain competitiveness.
Modifying chip design using 3D stacking techniques
The chips are no longer flat. Technologies like 3D stacking are layering them to pack more power into smaller spaces. Think of it as building skyscrapers instead of spreading them horizontally. Another innovation, Chiplet, breaks chips into modular pieces, making them easier to customize. This approach not only saves space but also boosts performance, especially for devices that demand high efficiency like smartphones and IoT gadgets.
Edge Computing
The era of relying on servers is slowly coming to an end as edge computing takes off. With edge computing, data processing takes place closer to the source – whether it’s a self-driving car or a smart home device. It reduces delays and enables real-time decisions. To make this work, semiconductors need to be faster and more efficient, pushing manufacturers to innovate. This trend will play a big role in areas like healthcare, where instant data analysis can save lives.
Open source chips
In the past chip design was a closely guarded secret. Now open source designs enable collaboration between engineers and researchers as they share ideas and resources. This change reduces costs. It accelerates innovation. Smaller players who previously faced challenges in competition now can. Small players, who once struggled to compete, can now manufacture and customize chips for niche applications. It is democratizing access to cutting-edge technology, ensuring that breakthroughs are not limited to a few big names.
Safety becomes a priority
In today’s world of cyber threats and attacks, which are growing more sophisticated by the day, protecting data is a top priority for sectors such as finance, healthcare, and national security, where a breach can have far-reaching implications. Manufacturers are now integrating security mechanisms into hardware at the chip level to ensure protection against unauthorized access or tampering.
A final thought
India is no longer just a consumer in the semiconductor space – it is poised to become a major player. The government is offering incentives to attract manufacturers and invest in talent, with plans to train 85,000 engineers and specialists. Initiatives like the Product Linked Incentive (PLI) scheme and the 2020 Semiconductor Policy are setting the stage for India to build its own chip-making ecosystem. Setting up a fabrication plant in India costs $5 to $7 billion (Indian government estimates), but the long-term benefits could position the country as a global hub.
The field of semiconductors is experiencing a high level of innovation and for India, opportunities are waiting to be explored. However, harnessing this potential will demand more than investment – it calls for a concerted effort by governments, academic institutions and businesses working hand-in-hand.
Sanjeev Kumar, Cofounder and CEO, Logic Fruit Technologies
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)