The hum of the thermal testing equipment fills the NXP India lab in Bangalore. Engineers lean over schematics, their faces illuminated by the glow of multiple monitors. It’s late 2024, and the team is deep in the weeds, stress-testing the latest automotive chips. The shift is palpable: India’s role in the global automotive semiconductor ecosystem is changing, moving from a primarily demand-driven market to one focused on design and system-level expertise.
“We’re seeing a significant shift,” says Hitesh Garg, Vice-President and India Managing Director at NXP Semiconductors. The rise of electric vehicles (EVs) and zonal architectures is making chips central to efficiency and sustainability, he notes. This isn’t just about importing components anymore; it’s about building the brains of the car right here.
The implications are far-reaching. For years, India has been a key market for automotive semiconductors, but now, the focus is on developing the engineering depth to compete globally. That means investing in talent, research, and development. It also means navigating the complex web of global supply chains and geopolitical tensions.
One of the key drivers behind this shift is the increasing complexity of modern vehicles. Zonal architectures, where different car functions are controlled by distinct processing units, are becoming the norm. This requires more sophisticated chips and a deeper understanding of system integration. This is not just a change in architecture, though; it’s a change in the economic model too.
“The move towards EVs is accelerating this trend,” explains a senior analyst at Counterpoint Research, speaking on condition of anonymity. “EVs require more semiconductors than internal combustion engine vehicles, and the need for advanced driver-assistance systems (ADAS) is only growing. India has the potential to become a major player in this space, but it will require sustained investment and a focus on innovation.” The analyst projects that the Indian automotive semiconductor market could reach $5 billion by 2028, up from $2 billion in 2023.
The government is also playing a role. The Indian government has launched several initiatives to promote domestic manufacturing and reduce reliance on imports. These policies, coupled with a growing pool of skilled engineers, are creating a favorable environment for semiconductor companies. But the road ahead isn’t without its challenges. The global semiconductor industry is highly competitive, and India will need to overcome supply-chain constraints and attract significant investment to realize its ambitions. The long-term success of this effort, it seems, hinges on India’s ability to not only design the chips but also control more of the manufacturing process.
The shift from demand to design is underway. It’s a complex undertaking, but one that promises to reshape India’s role in the global automotive industry. It’s a race against time, as well. Or maybe that’s how the supply shock reads from here.
About the Author
