Global semiconductor industry is expected to grow from $600 billion to $2 trillion by 2032: Cyient

The global semiconductor industry is expected to grow from $600 billion to $2 trillion in the next seven year says Krishna Bodanapu, Executive Vice Chairman and MD Cyient. He also said that India is quite ready in terms of semiconductor production capability, especially in design capability for chips, with about 20% of the share in the world coming from India. From a market perspective also, we're evolving. There's a lot of things that are happening in India. For example, the deployment of smart meters and smart grids. They will require a lot of chips in various places from home electricity to of course to the generation points, the prevalence of EVs, especially around two wheelers and three wheelers, which are a very unique market in India he added.

Speaking to Business Today at the launch of its fully owned semiconductor subsidiary, Cyient Semiconductors, Bodanapu said that they’ve established a separate subsidiary for their semiconductor business as the economics of the space differ significantly from those of a traditional technology services model of the company as Cyient is essentially a digital, engineering, and technology solutions company, He said, “Unlike services, semiconductor development requires substantial upfront investment in engineering, intellectual property creation, and capital expenditure for activities like design, prototyping, and testing. These early-stage costs are essential to ensure product quality and to safeguard shareholder value.” By carving out this business as an independent entity, company aims to structure its capitalization, appropriately, appoint a dedicated leadership team, and track its performance independently without impacting the financial dynamics of the parent company Cyient.

Cyient’s semiconductor business will serve a diverse set of clients across industries with strong demand for specialized chip solutions. These include automotive companies, industrial automation players, and data centres operators, infrastructure providers, those building servers and systems for large-scale data centres. Bodanapu said, “We've chosen to focus on specific horizontal capabilities such as power management, which is becoming increasingly critical across sectors. This focus allows us to work with a targeted group of clients where we can bring deep expertise and deliver high value.”

To support the growth of their semiconductor subsidiary, the Board of Cyient has approved an initial investment of up to $100 million, funded through internal accruals. In addition to this, the company has been authorized to explore external financing from strategic or financial investors. These two sources of capital, internal reserves and potential external investment are expected to provide us with a solid three- to five-year runway to scale the business and meet development milestones without requiring immediate further fundraising says Bodanapu.

On talking about IPO plans he said that currently their primary focus is on building a solid, scalable business that can deliver long-term value. The semiconductor sector is undergoing a major transformation, and India is uniquely positioned to play a strategic role in this global shift. He said, “We view this as a once-in-a-lifetime opportunity and are fully committed to seizing it by concentrating on operational execution, client partnerships, and technological innovation. Discussions about an IPO will only come at a later stage, once the business has matured and proven its value.”

He further added that the government’s focus on building core intellectual property and encouraging deep tech innovation adds further momentum to their business signalling a clear shift beyond consumer-facing startups to technology-driven manufacturing and design.

Lastly, on attracting the right talent propelling the tech businesses in India he said, India has some of the world’s finest engineers in electrical, semiconductor, and VLSI domains. The challenge now is to channel this talent into building globally relevant businesses from India—not just as service providers to multinational corporations, but as creators of end-to-end semiconductor solutions.