semiconductors newsletter rewiring indias electronics ambition - COE Chakra

The Boards That Connect: Rewiring India's Electronics Ambition

In factories across Hosur and Nanjangud rows of green boards move through etching, drilling, plating and lamination lines. These are not the finished smartphones or electric vehicles that dominate headlines about India’s manufacturing rise. These are bare printed circuit boards, the system that physically supports and electronically link every chip, sensor, connector and power rail inside modern devices.

The Missing Middle: What Component Manufacturing Actually Means

Component manufacturing involves producing these fundamental building blocks that sit between raw silicon chips and the final assembled product. This includes printed circuit boards (PCBs), camera sensors and modules, discrete semiconductors (diodes, transistors etc), passive components (resistors, capacitors, inductors), connectors, relays, antennas and many other similar parts.

The printed circuit board is the most foundational among them. It serves as both the physical chassis and the multi-layered electronic highway system of a device. Chips, sensors and connectors are mounted onto the board, while intricate copper traces, sometimes spread across 10 or more layers in advanced designs, allow high-speed signals and power to flow between them. A modern smartphone or electric vehicle can contain several PCBs of varying complexity, from simple single-layer boards in peripherals to sophisticated High-Density Interconnect (HDI) boards in the main system.

The component segment sits within the larger semiconductor value chain, a multi-stage journey from raw materials and chip design to final product assembly.

Semiconductor Value Chain

The semiconductor value chain is often described as a multi-stage journey that begins with raw materials and ends with finished electronic products. At one end lies semiconductor design and fabrication, the creation of chips through complex processes involving silicon wafers, photolithography, and advanced packaging. At the other end is final assembly of consumer and industrial devices. Between these two extremes lies the critical intermediate stage of electronic components and substrates, which includes printed circuit boards, passive components, connectors, sensors, and discrete semiconductors.

India has made visible progress in final assembly of products like mobile phones. It is also investing heavily in chip fabrication and advanced packaging through the India Semiconductor Mission. However, the components and substrates segment remains relatively underdeveloped.

Within this broader value chain, the printed circuit board emerges as the single most foundational and strategically important component, the critical link between advanced chips and functional electronic systems.

To understand why it holds such leverage, it helps to first understand what a PCB actually is and how it works.

What is PCB?

Have you ever opened up a broken electronic device and seen a flat green board with silver lines and tiny components? That is a Printed Circuit Board, or PCB, the foundation of nearly every electronic product today.

How PCB Works

Before PCBs, manufacturers connected every component using physical wires. This made electronics bulky, heavy, fragile, and expensive. A PCB solved this problem. It is a laminated sandwich of non-conductive layers and conductive copper. Microscopic tracks are chemically etched into the copper, connecting components neatly and reliably on a single surface.

The History Behind PCBs

Rise to Global Prominence

Types of PCBs Used Today

Modern devices require different types of PCBs depending on performance needs:

• Single and Double-sided PCBs: The simplest and lowest-cost types, with copper on one or both sides.
• Multi-layer PCBs: Multiple copper layers stacked together, enabling complex circuits in a compact space. Essential for high-performance devices.
• High-Density Interconnect (HDI) PCBs: Use finer traces and microvias to pack more functionality into smaller areas. Critical for smartphones, 5G equipment, and electric vehicles. A microvia is a very small vertical electrical connection (plated hole) that creates an electrical connection between different layers of a PCB.
• Flexible PCBs (FPCBs): Made from bendable materials for space-constrained or movable applications such as smartphones, wearables, and medical devices. Rigid-Flex boards combine rigid and flexible sections for greater reliability.

Why PCB Types Matter for India India’s manufacturing push is now targeting higher-value segments. Companies such as Kaynes Technology, Syrma SGS, and Ascent Circuits are investing in advanced multi-layer and HDI capacity, with some also adding flexible PCB lines. These investments focus on areas where India has historically been heavily import-dependent.

For years, India’s electronics success was built on final product assembly. However, the boards inside most phones, laptops, cars, 5G equipment, and defence systems were almost entirely imported. This gap has now become one of the most important tests of whether India can move beyond “assembled in India” to a more resilient position in global supply chains.

The urgency of bridging this component manufacturing gap becomes starkly clear when examining the fragile, low-margin economics of relying solely on final product assembly.

The Assembly Trap

Dixon Technologies’ CFO laid out the economics plainly in a recent earnings call. Mobile phone assembly business margins, he said, are closer to 3.5%. On top of that, the Production Linked Incentives (PLI) benefit adds about 5-6%, which gets consolidated into the reported margin. Take away the government incentive, and what remains is a thin-margin business that depends on unpredictable customer demand and on component prices.

Without incentives, the model is structurally weak. Dixon’s management has therefore set an ambitious internal target: almost 70-80% of its business should be integrated into the component landscape by FY28, which would deliver margin expansion even without PLI support.

The Multiplier Effect: Why PCBs Punch Above Their Weight

Among all components, printed circuit boards stand out for their leverage. Kaynes Technology’s CFO explained the multiplier effect with clarity. An investment of roughly ₹1,500 crore in HDI PCB manufacturing, he noted, could generate a business potential of about ₹15,000 crore for the group, assuming the general industry thumb rule that PCB content represents around 10% of PCBA* value. From the same set of clients, ₹1,500 crore of PCB revenues could pull in ₹13,500 crore of EMS revenues.

The logic is insightful: if you make the PCB, you dramatically improve your chances of winning the contract to assemble the full product. It is not just the margin on the board itself; it is the much larger EMS business that follows.

Syrma’s MD echoed the same with conviction while discussing the company’s PCB expansion.

*PCBA (PCB Assembly) includes the PCB + all the soldered components (resistors, capacitors, integrated circuits/chips, connectors, etc.). PCB is the bare laminated board with copper tracks.

The Economics of Moving Up

Not all PCBs are created equal. A basic single-sided board sells for around US$30 per square metre. But demand is surging for complex, multi-layered and High-Density Interconnect (HDI) boards used in smartphones, EVs and aerospace. These advanced boards can command around US$500 per square metre, a roughly 17x price premium. Because they are difficult to manufacture and have lengthy, stringent customer approval cycles, they create a natural barrier against cheap, low-tech imports.

Policy Support and Protection

The government introduced the Electronics Components Manufacturing Scheme (ECMS) to build a self-reliant and globally competitive component manufacturing base. Approved in May 2025 with an initial outlay of ₹22,919 crore, the scheme’s financial support was later enhanced to around ₹40,000 crore in response to strong industry interest.

The scheme has received an overwhelming response, with 249 applications projecting a total investment commitment of over ₹1,15,000 crore, which is nearly double the initial target. The government has so far approved 75 projects under the scheme, with a committed investment of approximately ₹61,671 crore, expected to generate direct employment for over 65,000 people.

A significant portion of the early approvals has gone towards Printed Circuit Board (PCB) manufacturing. In the first tranche of approvals (worth ₹5,532 crore), major commitments were received from Kaynes Circuits India, Syrma Strategic Electronics, and Ascent Circuits for multi-layer and HDI PCBs. Subsequent approvals have also included projects for Flexible PCBs and Copper Clad Laminates.

Complementing the financial incentives under ECMS are protective measures such as a 30% anti-dumping duty on certain categories of imported PCBs and increasing local content requirements in government procurement, particularly in telecom and defence. Global OEMs including Apple, Samsung, Lenovo, HP, and Dell are also actively encouraging their suppliers to source 20–30% of components from India as part of their supply chain diversification strategies.

The Capital being deployed in India

These policy incentives are now translating into concrete investments on the ground.

• Amber Enterprises is investing roughly ₹4,200 crore to build multi-layer and HDI capacity; this includes the ₹1,100 crore project being executed by Ascent Circuits in Hosur, Tamil Nadu.
• Kaynes Technology is committing around ₹1,400 crore to PCB manufacturing, alongside large investments in OSAT and camera modules.
• Syrma SGS is spending ₹360–400 crore in the first phase of its PCB plant.

• AT&S India in Nanjangud, Karnataka remains the quality benchmark for high-end multilayer boards used in automotive, industrial and medical applications.

Established names such as Genus Electrotech, Epitome Components and Shogini Technoarts continue to expand in segments where reliability requirements are rising.

The Hard Constraints

While policy support has successfully attracted investment, translating that capital into sustainable manufacturing capability remains a significant challenge.

Over 90% of copper-clad laminates, the foundational substrate for PCBs is still imported. Specialty laminates required for high-frequency 5G, high-speed digital or high-reliability automotive applications are even more import-dependent. Technology and yields for advanced HDI and substrate-like boards require years of process learning. Most equipment still comes from Japan, Europe and Taiwan. Environmental compliance adds cost and complexity.

Talent remains another constraint. India has strong PCB design services and capable process engineers, but experienced fab talent for high-layer-count, high-reliability manufacturing is limited. Scaling too fast risks quality issues that can disqualify suppliers from automotive or defence programmes. Most of these new component investments are expected to deliver meaningful margin contribution only in FY28, after capacity stabilises and integration deepens.

Conclusion: The Real Test Has Just Begun

India has spent years becoming good at assembling products. The next phase is harder — making the parts that go inside those products.

The printed circuit board is the most basic but most critical part of any electronic device. It is the platform that holds chips and other components together and allows them to work. Without strong domestic capability in these boards, India will continue to depend on other countries for the real building blocks of modern electronics.

The government has offered support. Companies have started investing. But support and money alone will not be enough. Success will depend on whether Indian companies can build the capability to make advanced boards at scale, with consistent quality.

Those who manage to do this will move up in the global electronics chain. Those who don’t will remain stuck at the lower end.

The boards we make in India will decide whether we become serious players in global electronics or remain assemblers of other people’s designs.

Authored by
Jagadish Kumar P Soman (Credit Analyst)
SBI CHAKRA Centre of Excellence

Source: The figures related to the Electronics Components Manufacturing Scheme (ECMS) are based on publicly available Press Information Bureau (PIB) releases. PCB pricing references are drawn from the publicly available Avendus Capital report titled Building India’s Electronics Backbone. Other company-specific figures and project investment details are based on management commentary and reports published in general business news channels/reports, as available in the public domain.