India is on the cusp of a transformative journey in the global semiconductor industry, poised to shift from a consumer to a key manufacturer in the electronics value chain. As Prime Minister Narendra Modi aptly stated, “Today’s India inspires confidence in the world… When the chips are down, you can bet on India.” Launched in December 2021 with a financial outlay of ₹76,000 crore, the India Semiconductor Mission (ISM) is driving this revolution, fostering a robust ecosystem for semiconductor and display manufacturing. Coupled with initiatives like the SEMICON India Programme and global partnerships such as the Initiative on Critical and Emerging Technology (iCET), India is emerging as a trusted hub for semiconductor innovation and production. This article explores the strategic importance of semiconductors, India’s role in the global market, recent developments, and the path to becoming a semiconductor superpower by 2030.
The Strategic Importance of Semiconductors
Semiconductors are the backbone of modern technology, powering everything from smartphones and computers to electric vehicles, satellites, and defense systems like India’s Akash Teer missile. These tiny chips, made from materials like silicon with electrical conductivity between conductors and insulators, contain millions or billions of transistors, resistors, capacitors, and wiring. They store, process, and transfer information, enabling devices to perform complex tasks, such as the AI-driven decision-making in the Vikram lander during India’s Chandrayaan-3 mission.
The global semiconductor industry is driven by the rapid pace of digitization, the adoption of artificial intelligence (AI), machine learning, 5G, and the Internet of Things (IoT). These technologies demand high-performance, energy-efficient chips to handle real-time data processing. However, the industry’s concentration in a few countries—Taiwan (60% of global production, 90% of advanced chips), South Korea, Japan, China, and the US—has exposed vulnerabilities in global supply chains, as seen during the COVID-19 pandemic and geopolitical tensions. The chip shortage disrupted industries like automotive and consumer electronics, underscoring the need for diversified manufacturing. India is seizing this opportunity to build a resilient semiconductor ecosystem, aligning with global efforts to reduce reliance on single regions.
India’s Semiconductor Market: Growth and Potential
India’s semiconductor market, valued at $38 billion in 2023, is projected to reach $100–110 billion by 2030, growing at a compound annual growth rate (CAGR) of 13–17%. This growth is fueled by rising demand for consumer electronics, driven by a burgeoning middle class, increasing disposable incomes, and government initiatives like Make in India and Atmanirbhar Bharat. India’s electronics market, expected to hit $240 billion by 2030, relies heavily on semiconductors, with 65–70% of components currently imported. The India Semiconductor Mission (ISM) aims to reduce this dependency by fostering domestic manufacturing, design, and innovation.
India’s strengths include its vast talent pool, with 20% of the global semiconductor design workforce, and a robust education system producing over 1 million STEM graduates annually. The country also offers cost advantages in labor and infrastructure, making it an attractive destination for global companies. Strategic partnerships with nations like the US, Japan, and the EU, along with investments from firms like Micron, Tata, and Foxconn, are positioning India as a key player in the global semiconductor value chain, spanning equipment, materials, and services like R&D and logistics.
India Semiconductor Mission: A Strategic Framework
Launched in December 2021 under the Ministry of Electronics and Information Technology (MeitY), the ISM is a cornerstone of India’s semiconductor strategy, with a ₹76,000 crore ($9.2 billion) outlay. It aims to create a sustainable ecosystem for semiconductor and display manufacturing, focusing on fabrication, packaging, testing, and chip design. The mission’s objectives include:
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Establishing Manufacturing Facilities: Setting up semiconductor fabrication (fabs) and display manufacturing units to meet domestic and global demand.
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Promoting Chip Design: Supporting startups and MSMEs through the Design Linked Incentive (DLI) Scheme, offering up to ₹15 crore per company for R&D and access to Electronic Design Automation (EDA) tools.
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Skill Development: Training 85,000 engineers in advanced semiconductor technologies to build a skilled workforce.
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Global Partnerships: Fostering collaborations with international agencies and companies for technology transfer and supply chain resilience.
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Indigenous Innovation: Encouraging intellectual property (IP) generation and cutting-edge research through Centres of Excellence (CoEs).
The ISM operates through four key schemes:
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Semiconductor Fabs Scheme: Provides up to 50% fiscal support for establishing wafer fabrication units, targeting advanced (28nm or below) and mature technologies.
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Display Fabs Scheme: Offers 50% financial assistance for AMOLED and LCD display manufacturing to reduce import reliance.
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Compound Semiconductors and ATMP/OSAT Scheme: Supports units for compound semiconductors, silicon photonics, and chip packaging/testing, with 50% capital support.
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Design Linked Incentive (DLI) Scheme: Commits ₹234 crore to 22 startups for chip design projects worth ₹690 crore, targeting applications in CCTV, mobile networks, satellites, and automotive.
Recent Developments in India’s Semiconductor Ecosystem
India’s semiconductor journey has gained momentum with significant milestones in 2024–2025:
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New Manufacturing Units: Five production units are under construction, including:
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Micron Technology (Sanand, Gujarat, ₹22,516 crore): An ATMP facility for chip packaging and testing, with phased ramp-up.
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Tata Electronics with PSMC (Dholera, Gujarat, ₹91,000 crore): India’s first commercial fab, producing 50,000 wafers/month for automotive, AI, and wireless communication, set to begin in 2026.
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CG Power with Renesas & Stars (Sanand, Gujarat, ₹7,600 crore): An OSAT facility producing 15 million chips/day.
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Tata Semiconductor Assembly and Test (Morigaon, Assam, ₹27,000 crore): A facility producing 48 million chips/day.
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Kaynes Semicon (Sanand, Gujarat, ₹3,307 crore): An OSAT facility with a capacity of 6.33 million chips/day.
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HCL-Foxconn JV (Jewar, Uttar Pradesh, ₹3,700 crore): A display driver chip plant producing 20,000 wafers/month (36 million units/year) for mobile phones, laptops, and automotive displays, approved in May 2025.
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Indigenous Chip Production: At the Global Investors Summit 2025, it was announced that India’s first indigenous semiconductor chip would be ready for production in 2025, marking a historic milestone.
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Advanced Design Facilities: In May 2025, Union Minister Ashwini Vaishnaw inaugurated two state-of-the-art 3-nanometer chip design centers in Noida and Bengaluru, positioning India at the forefront of next-generation chip innovation.
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Startup Ecosystem: Startups like Netrasemi, supported by the DLI Scheme, secured ₹107 crore in venture capital in July 2025 for chips used in smart vision, CCTV, and IoT applications. Over 100 semiconductor startups are driving innovation in AI, IoT, and 5G.
SEMICON India: A Global Platform
The SEMICON India Programme, a flagship event under the ISM, fosters collaboration among industry leaders, policymakers, academia, and startups. The 4th edition, scheduled for September 2–4, 2025, at Yashobhoomi, New Delhi, will feature:
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Global Participation: Over 300 exhibitors from 18 countries, including four international pavilions from Japan, South Korea, Singapore, and Malaysia.
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Country Roundtables: Eight high-level discussions to foster bilateral collaborations.
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Workforce Development Pavilion: Focused on training and upskilling to meet the industry’s need for 1 million skilled workers by 2030.
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Semiconductor Design Startup Pavilion: Showcasing innovation-led chip design enterprises.
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State Government Pavilions: Nine states, up from six, highlighting regional contributions to the semiconductor ecosystem.
SEMICON India 2025 will underscore India’s growing role in the global semiconductor value chain, promoting technology transfer, investment, and skill development.
Strategic Global Partnerships
India’s semiconductor ambitions are bolstered by strategic collaborations:
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India-US iCET: Enhances technology transfer and skill development through partnerships like the MoU between ISM and Purdue University for R&D and workforce training.
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India-Japan MoU: Focuses on semiconductor design, manufacturing, and supply chain resilience, with an implementation organization fostering government and industry collaboration.
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India-EU Trade and Technology Council: Strengthens semiconductor ecosystems through joint research and innovation.
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Industry Collaborations: Partnerships with global leaders like Lam Research, IBM, Micron, and Applied Materials support infrastructure, R&D, and training. For example, Lam Research’s MoU with IISc aims to train 60,000 engineers over a decade.
Talent Development and Skill Enhancement
Addressing the industry’s need for 1 million skilled workers by 2030, the ISM has launched several initiatives:
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AICTE Curriculum: New courses in VLSI Design & Technology and IC manufacturing, with over 45,000 students enrolled across 100 institutions.
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SMART Lab at NIELIT Calicut: Trained 44,000 engineers, aiming for 1 lakh nationwide.
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Future Skills Program: Training 20,000 engineers in Madhya Pradesh.
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Industry-Academia Partnerships: Collaborations with Lam Research, IBM, Micron, and Purdue University provide hands-on learning and access to advanced labs.
These efforts leverage India’s 20% share of the global semiconductor design workforce, positioning it as a leader in chip design innovation.
Challenges and Opportunities
Despite its progress, India faces challenges:
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R&D Investment: India’s R&D spending is 0.65% of GDP, compared to 4.8% in South Korea, limiting indigenous chip development.
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Infrastructure: Semiconductor manufacturing requires ultra-clean water, reliable power, and specialized equipment, which are costly to establish.
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Import Dependence: Over 75% of semiconductor production is concentrated in East Asia, and India imports 65–70% of its components.
However, opportunities abound:
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Global Supply Chain Shift: Geopolitical tensions and pandemic disruptions have prompted companies to diversify away from East Asia, with India as a preferred destination.
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Domestic Demand: India’s growing electronics market, projected at $240 billion by 2030, supports local production.
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Policy Support: Incentives like the PLI Scheme, DLI Scheme, and state-level policies (e.g., Uttar Pradesh’s Semiconductor Policy 2024) attract investment.
Economic and Strategic Impact
The semiconductor industry is expected to generate 1 million jobs by 2030, including 35,000 high-quality direct jobs and 100,000 indirect jobs. It will boost India’s GDP, support MSMEs, and enhance startups in hardware development. By reducing import reliance, India strengthens its national security and technological sovereignty, aligning with Atmanirbhar Bharat. The industry’s growth also supports downstream sectors like automotive, telecom, and healthcare, driving economic resilience.
Conclusion
India’s semiconductor revolution, driven by the India Semiconductor Mission, SEMICON India Programme, and global partnerships like iCET, is transforming the nation into a global hub for electronics manufacturing and design. With state-of-the-art facilities, a focus on advanced chip design, and a robust talent pipeline, India is addressing global supply chain vulnerabilities while meeting domestic demand. As Prime Minister Modi’s vision unfolds, India is poised to capture a 10% share of the $1 trillion global semiconductor market by 2030, ensuring economic growth, technological self-reliance, and a pivotal role in the global tech landscape. The chip revolution is indeed happening “right here, right now in Bharat.”
