In the age of digital dominance, semiconductors have become the backbone of modern technology, powering everything from smartphones and electric vehicles to satellites and artificial intelligence systems. As global demand for microchips surges, countries are striving to secure their place in the global semiconductor supply chain. Among them, India is emerging as a significant player in the international semiconductor race, driven by its strategic initiatives, rising domestic demand, and the push for technological self-reliance.
In this comprehensive guide, we explore how India is positioning itself in the global chip-making ecosystem and what the future holds for its semiconductor ambitions.
Why Semiconductors Matter in Today’s Economy
To begin with, semiconductors are essential for all modern electronic devices. They enable computing, connectivity, automation, and innovation in almost every industry. From healthcare to defense, the semiconductor industry plays a crucial role in shaping the global economy.
However, the world has witnessed supply chain disruptions, especially during the COVID-19 pandemic, which exposed the vulnerability of over-reliance on a few countries, mainly Taiwan, South Korea, and China, for chip production. Consequently, nations are now diversifying their manufacturing hubs and investing in semiconductor self-sufficiency.
India’s Entry into the Semiconductor Race
India, with its robust IT sector, abundant engineering talent, and growing electronics market, is stepping into the semiconductor manufacturing arena. While the country has long been a leader in software development and design, it is now focusing on establishing chip fabrication (fab) plants, developing supply chain capabilities, and attracting foreign investment.
Key Government Initiatives Driving Growth
To support its semiconductor ambitions, the Indian government has introduced the Semicon India Programme, backed by an investment of over $10 billion. This policy aims to:
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Set up semiconductor fabrication and display fabs in India
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Support the design and packaging units
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Offer fiscal support to private players
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Create an ecosystem of skilled talent and R&D
Additionally, the Production Linked Incentive (PLI) Scheme has extended incentives to attract global players to set up chip manufacturing units in India.
Partnerships with Global Tech Giants
India is also leveraging international partnerships to fuel its semiconductor growth. Major global semiconductor companies such as Intel, TSMC, Foxconn, and Micron have shown interest in collaborating with Indian firms or setting up facilities in the country.
For instance, Micron Technology announced plans in 2023 to build a semiconductor assembly and test facility in Gujarat, marking one of the largest investments in India’s electronics sector.
Rising Demand from Domestic Industries
One of the biggest advantages India has is its booming electronics and automotive industries. With an increasing appetite for smartphones, electric vehicles, consumer electronics, and IoT devices, India’s internal demand for semiconductors is projected to exceed $100 billion by 2030.
This demand serves as a strong foundation for developing a domestic semiconductor manufacturing base, reducing import dependency, and enhancing national security.
Challenges on the Path Ahead
While the ambitions are bold, India faces several challenges in catching up with established semiconductor giants. These include:
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Lack of existing infrastructure for fabrication
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High capital investment and long gestation periods
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Limited water and power supply reliability (critical for fabs)
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Need for an advanced, skilled workforce
Strength in Chip Design Talent
India already plays a vital role in semiconductor chip design, with over 20% of the world’s semiconductor design engineers based in the country. Companies like Qualcomm, Broadcom, AMD, and NVIDIA operate design centers in cities such as Bengaluru, Hyderabad, and Noida.
This talent pool is critical for R&D innovation, enabling India to climb the value chain from design to manufacturing.
Role of Startups and Academia
India’s vibrant startup ecosystem is contributing to semiconductor innovation. Startups like InCore Semiconductors and Mindgrove Technologies are working on indigenous chipsets and RISC-V-based processors.
Moreover, academic institutions such as IITs and IISc are partnering with the government to develop research centers, train semiconductor professionals, and build homegrown IP.
Semiconductor Ecosystem: Building the Value Chain
Developing a successful semiconductor industry requires more than fabs. It includes:
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Raw material supply chains (like silicon wafers, chemicals)
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Equipment and machinery
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Testing, packaging, and assembly units
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Export and logistics support
India is working to create specialized semiconductor clusters with plug-and-play infrastructure, logistics connectivity, and clean energy sources to attract global players.
Geopolitical Advantage and Strategic Location
India’s geopolitical neutrality and strategic alliances with the United States, Japan, and the EU make it a favorable destination for semiconductor investment. As tensions grow in the Asia-Pacific region, especially around Taiwan, global companies are looking for alternate manufacturing hubs, and India stands out.
The Road Ahead: Future Prospects
India’s vision for the semiconductor industry is both ambitious and achievable. With a growing digital economy, government support, and increasing global interest, the country is well-positioned to become:
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A design and R&D hub for chips
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A leading destination for semiconductor testing and packaging
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A long-term player in advanced chip manufacturing
While building fabs will take time and sustained investment, India’s presence in the global chip race is now a reality.
Conclusion: India’s Semiconductor Journey Has Just Begun
In conclusion, India’s role in the international semiconductor race is rapidly evolving. By focusing on chip design, fostering global partnerships, encouraging local innovation, and investing in infrastructure, India is building the foundation for a future-ready semiconductor industry.
