Guest Column Author
Suhasini Kirloskar, Founder of B2B Growth Essentials from MarketAxis Consulting
Semiconductors have moved from invisible enablers to frontline instruments of economic security
and geopolitical power. As global supply chains fracture and chips become central to growth, defence,
and AI, India is stepping decisively into a once-exclusive club of semiconductor-building nations.
For decades, semiconductors have been the quiet enablers of economic growth, embedded in devices,
machinery, and networks but rarely noticed. What has changed in recent years is the way governments now view them: as strategic assets whose control shapes economic resilience and geopolitical power. Chips are vital for advanced manufacturing, AI, defence systems, telecommunications, and energy transition. This makes their availability and control an instrument of global power.
This shift is driven by two realities. Firstly, advanced semiconductor production is extraordinarily concentrated: Taiwan accounts for the majority of global foundry capacity, while a handful of firms in the U.S., South Korea, Japan, and the Netherlands control critical design software, manufacturing tools, and materials. Secondly, geopolitical tensions, most visibly between the U.S. and China, have exposed how vulnerable global supply chains are to controls, sanctions, or conflict. As a result, chips have moved to the centre of industrial policy, with governments deploying subsidies, trade restrictions, and diplomatic coordination to secure supply and deny adversaries’ access.
In China, access to advanced semiconductors has become increasingly constrained because US-led export controls now limit both the import of AI chips and China’s ability to manufacture similar chips. Shortages are so acute that the government has directed how output from its largest contract chipmaker, Semiconductor Manufacturing International Corp, is allocated. Some AI developers, including DeepSeek, have been forced to delay releases, while companies such as Huawei are relying on workarounds to compensate for limited access.
India’s Place in the Global Semiconductor Landscape
India has a substantial industrial foundation already in place. The economy combines a large domestic market with globally competitive capabilities in automotive, pharmaceuticals, engineering goods, electronics assembly, and process industries, alongside a strong services and software base.
Building on this, certain specific priorities define the next phase as we aim to sustain high growth and move toward the USD 5-trillion mark. Some of our priorities include expanding electronics, advanced manufacturing, EVs, industrial automation, and defence production. Each of these requires electronic systems embedded across products, factories, and infrastructure.
To translate ambition into industrial capability, the government established the India Semiconductor Mission (ISM) as a nodal agency for a comprehensive semiconductor ecosystem. The mission’s objective is to reduce dependency on imports and anchor India in the global semiconductor value chain by promoting fabrication, advanced packaging, testing, and design capabilities. The government committed
a ₹76,000 cr or about USD 9 bn semiconductor and display manufacturing incentive package to attract large-scale investments.
The ISM offers fiscal support of up to 50% of the project cost for setting up semiconductor fabs and display fabs, and additional incentives for compound semiconductors, sensors, and packaging units. It also includes a Design Linked Incentive scheme to promote chip design and infrastructure, alongside skill-development initiatives within the ecosystem.
What makes this moment exceptional is that only a handful of nations globally are even attempting to build semiconductor capability at this scale, and India is now firmly among them.
India now has 10 approved projects under the India Semiconductor Mission, spanning semiconductor
fabs, advanced packaging and testing, and compound semiconductors.
- Micron Technology Inc. is setting up an Assembly, Testing, Marking and Packaging (ATMP) facility
for Dynamic Random-Access Memory (DRAM) and NAND memory at Sanand, Gujarat, with an
investment of ₹22,516 crore (USD 2.75 bn). - Tata Electronics, in partnership with Powerchip Semiconductor Manufacturing Corp (Taiwan),
is establishing a greenfield logic and power semiconductor fab at Dholera SIR, Gujarat, with an
investment of ₹91,526 crore (about USD 10.1 bn). - Tata Semiconductor Assembly and Test Pvt Ltd (TSAT) are building an Outsourced Semiconductor
Assembly and Test (OSAT) facility at Jagiroad, Morigaon, Assam, backed by an investment of
₹27,000 crore (about USD 3.2 bn). - CG Power & Industrial Solutions, together with Renesas (Japan) and Stars Microelectronics (Thailand), is setting up an advanced OSAT and packaging unit at Sanand, Gujarat, with an investmentof ₹7,600 crore (USD 0.9 bn).
- Kaynes Semicon Pvt Ltd, a subsidiary of Kaynes Technology, is establishing an OSAT/ATMP facility at Sanand, Gujarat, and is among the earliest ISM- linked projects to begin commercial deliveries.
- HCL Group–Foxconn JV (Vama Sundari Investments)is setting up an OSAT facility focused on display driver chips near Jewar Airport, Uttar Pradesh.
- SiCSem Pvt Ltd is developing India’s first commercial Silicon Carbide fab with ATMP capabilities at Info Valley, Bhubaneswar, Odisha.
- 3D Glass Solutions Inc. (3DGS) is setting up a glass substrate and ATMP facility at Info Valley, Bhubaneswar, Odisha, adding critical advanced packaging materials capability.
- Continental Device India Ltd (CDIL) is expanding its discrete and legacy semiconductor manufacturing and packaging operations at Mohali, Punjab, to augment capacity for power and legacy devices.
- Advanced System in Package (ASIP) Technologies is establishing an advanced SiP and system-in-package facility in Andhra Pradesh, focused on high-density modules for communications and electronics.
In addition, the government has approved the modernisation of the Semiconductor Laboratory (SCL) in
Mohali, with Tata Semiconductor Manufacturing, Cyient, and Applied Materials selected for different phases of the upgrade. While SCL is not a commercial high-volume fab, its upgrade is intended to support strategic, defence, and research-oriented semiconductor needs.
Semiconductor Skills and Capability Development
Alongside manufacturing and packaging, India is also building capability at the design layer, where talent, tools, and learning curves determine long-term competitiveness.
In just one year, Indian universities and startups have completed more than 120 chip design tape-outs; something that until recently was unthinkable outside a handful of global technology hubs. Through the Chips to Start-up (C2S) programme, institutions across the country now have access to industry-grade Electronic Design Automation (EDA) tools and fabrication via the ChipIN Centre at C-DAC Bengaluru.
Over the past year, 46 academic institutions completed 122 tape-outs across five multi-Project Wafer shuttle runs, resulting in 56 student-designed chips fabricated and delivered from the Semiconductor Laboratory, Mohali. More than 380 organisations, including over 90 startups, have collectively logged over 175 lakh hours of EDA usage, creating one of the world’s largest centralised chip-design infrastructures.
For students, engineers, and startups, this marks the beginning of a new era of high-tech opportunities.
A Moment of Opportunity
Taken together, these developments mark a rare moment of alignment for Indian industry. Manufacturing firms, suppliers, design houses, universities, and startups now have an opening to plug into a semiconductor ecosystem that is being built simultaneously across design, fabrication, packaging, and applications. The opportunity is not limited to fabs alone: it spans process engineering, equipment
maintenance, materials, electronics manufacturing services, industrial automation, quality and reliability engineering, and system integration. For Indian companies and professionals, this creates demand for new skills in chip design, packaging, testing, manufacturing operations, and applied electronics, as
well as for deeper collaboration between industry, academia, and global technology partners.
Seized with confidence, this moment can embed semiconductor capability into the fabric of Indian manufacturing, strengthening competitiveness and resilience for the long term.
