The global semiconductor industry, valued at over $600 billion and underpinning virtually every dimension of modern economic and military power, has long been dominated by a remarkably concentrated geography: Taiwan, South Korea, the United States, Japan, and, increasingly, China. India, despite its formidable software engineering talent and its status as the world’s largest consumer of electronic goods, has remained conspicuously absent from the fabrication side of this critical value chain. That absence is now being addressed with a speed and scale that has captured the attention of the global chip industry.
The India Semiconductor Mission (ISM), operating under a ₹76,000 crore (approximately $9 billion) budgetary allocation, has approved twelve semiconductor manufacturing, assembly, testing, and packaging facilities across the country. The most recent approvals — Crystal Matrix Limited and Suchi Semicon, both in Gujarat — bring the total to a dozen projects spanning compound semiconductors, silicon carbide devices, gallium nitride power electronics, advanced OSAT (outsourced semiconductor assembly and test) operations, and, most ambitiously, silicon wafer fabrication.
Gujarat has emerged as the gravitational centre of India’s chip ambitions. The state’s Dholera Special Investment Region, conceived as a greenfield industrial city, now hosts the Tata Electronics-PSMC (Taiwan’s Powerchip Semiconductor Manufacturing Corporation) joint venture — India’s first large-scale silicon fab, targeting 28-nanometre process technology. While 28nm is not at the bleeding edge of Moore’s Law (TSMC and Samsung are manufacturing at 2nm and 3nm respectively), it represents the sweet spot for the vast majority of global chip demand: automotive microcontrollers, industrial IoT sensors, power management ICs, display drivers, and telecommunications infrastructure components. Approximately 60–70% of all chips manufactured globally use mature process nodes of 28nm and above.
The strategic logic is compelling. India imports over $80 billion worth of electronics annually, with semiconductors constituting a significant and growing fraction. Every electric vehicle, every 5G base station, every solar inverter, every defence system requires chips — and India’s dependence on foreign fabrication represents both an economic drain and a national security vulnerability. The semiconductor shortage of 2020–2023, which crippled automobile production and consumer electronics supply chains worldwide, provided a visceral demonstration of this risk.
Beyond fabrication, India’s chip ecosystem strategy encompasses the entire value chain. The design segment — where India already possesses significant strength, with over 20% of the world’s chip design engineers employed by firms such as Qualcomm India, Intel India, Texas Instruments, and a growing cohort of indigenous design houses — is being further catalysed through the Design-Linked Incentive (DLI) scheme. This programme provides financial support and mentorship to startups developing chips for AI inference, RISC-V processors, and domain-specific architectures.
The compound semiconductor segment deserves particular attention. Unlike traditional silicon, compound semiconductors based on gallium nitride (GaN) and silicon carbide (SiC) are essential for high-power, high-frequency applications: electric vehicle powertrains, 5G and 6G radio frequency components, renewable energy inverters, and defence radar systems. India’s approved projects in this segment position the country to participate in what analysts project will be a $100 billion compound semiconductor market by 2030.
Workforce development remains a critical enabler. The ISM has partnered with academic institutions — including IITs, NITs, and specialised centres such as the Indian Institute of Science — to train 85,000 semiconductor professionals over the next five years. Curricula spanning chip design (using EDA tools from Synopsys and Cadence), process engineering, cleanroom operations, and packaging technology are being deployed at scale.
Challenges persist. Semiconductor fabrication demands extraordinary precision in water supply, power reliability, chemical logistics, and intellectual property protection. India’s infrastructure, while improving rapidly, must meet the exacting standards of an industry where a single particle of dust can render a wafer worthless. The gestation period for fab construction is typically three to four years, meaning the first Indian-fabricated chips will likely emerge in 2027–2028.
Nevertheless, the trajectory is unmistakable. India is constructing not merely factories, but an ecosystem — design houses, fabrication facilities, packaging operations, testing laboratories, equipment suppliers, and a trained workforce — that collectively constitute the architecture of semiconductor sovereignty. In a world where chips are the new oil, India has decided it can no longer afford to be merely a consumer.
-Kalyan srinivas
