India’s Semiconductor Push: How India Is Building Its Position in the Global Chip Industry

September 30, 2026

BREAKING NEWS

A decade ago, India barely featured on the world’s semiconductor map. It designed chips for global giants but did not manufacture a single one on its own soil. That story is changing fast. In September 2026, New Delhi’s Yashobhoomi convention centre hosted SEMICON India 2026, an event that pulled in more than 600 exhibiting companies, delegates from 52 countries, over 400 executives and 150-plus speakers under the theme “Silicon to Systems: Building the Ecosystem.” At the centre of the buzz was Applied Materials’ announcement of a $5 billion, decade-long “India Vision 2035” commitment – one of the clearest signals yet that global chip-equipment leaders see India as more than a spectator in the semiconductor race.

This is not an isolated headline. It sits on top of a five-year policy push, a dozen approved manufacturing projects worth well over ₹1.6 lakh crore, three facilities already producing commercially, and a domestic chip market that is projected to more than double by 2030. This article unpacks how India got here, what is actually being built on the ground, who the major players are, what jobs and economic value are at stake, and where the biggest risks and opportunities lie as India tries to carve out a lasting seat at the semiconductor table.

Latest News and Background: SEMICON India 2026 and the Applied Materials Moment

SEMICON India 2026, the fifth edition of the flagship conference jointly organised by the India Semiconductor Mission (ISM) and SEMI, ran from 17 to 19 September 2026 at Yashobhoomi in New Delhi. Prime Minister Narendra Modi inaugurated the event and used the platform to position India as a dependable, execution-focused partner for the global semiconductor industry, pointing to the shift from years of policy announcements to actual commercial chip production.

The scale of participation marked a jump from previous editions. Where SEMICON India 2025 drew around 350 exhibiting companies from 48 countries, the 2026 edition brought in more than 600 exhibitors, roughly 300 international participants, representatives from 52 countries, and over 51,000 total registrations. Six dedicated Country Pavilions represented Japan, South Korea, Malaysia, the Netherlands, Singapore and Sweden, alongside 12 state pavilions and dedicated spaces for start-ups, student hackathons and workforce development.

The single biggest announcement came from Applied Materials, the world’s largest semiconductor-equipment maker. Prabhu Raja, president of the company’s Semiconductor Products Group, unveiled “Applied Materials India Vision 2035” – a $5 billion investment over the next decade built around three pillars: deepening R&D in India, accelerating the domestic semiconductor ecosystem, and growing future talent. The plan includes a proposed 140-acre advanced semiconductor research park, an ambition to expand India-based supply-chain capacity roughly tenfold by 2035, and a commitment to double the company’s India R&D headforce, which already stands at more than 7,000 employees after quadrupling over the past decade. Applied Materials frames the move as a response to rising AI-driven demand for advanced chips and to a broader trend of equipment suppliers diversifying their research and procurement footprints beyond traditional hubs.

Applied Materials was not the only name making news. Lam Research outlined a roughly ₹10,000 crore plan for silicon components, Fujifilm announced an ₹800 crore materials facility, and Tata Electronics signed 16 supplier memorandums of understanding while flagging new production milestones at Mohali and Surat. Across the three days, the conference recorded 56 MoUs, announcements and strategic initiatives spanning design, fabrication, advanced packaging, equipment, materials, power electronics and AI. Modi also virtually inaugurated commercial production lines at CDIL Semiconductor in Mohali and Suchi Semicon in Surat – a sign that “Made in India” chips are no longer a slogan but a shipping reality for at least a handful of companies.

Also Read- UPI Gets a New Charge: 0.4% MDR on Large Merchant Payments from October 15

India’s Semiconductor Industry, Explained

Semiconductors – commonly called chips – are the tiny silicon components that power almost every piece of modern electronics, from smartphones and cars to defence systems, medical devices and AI data centres. The industry is generally divided into a few broad layers: chip design (creating the blueprint of a chip), fabrication or “fab” (manufacturing the actual silicon wafer, often called front-end manufacturing), and assembly, testing, marking and packaging (ATMP) or outsourced semiconductor assembly and test (OSAT), which is the back-end process of cutting wafers into individual chips, testing them and packaging them for use.

For most of its history, India’s role in this chain was concentrated almost entirely at the design end. The country is home to roughly one-fifth of the world’s semiconductor design engineers, working out of global R&D and engineering centres for companies such as Qualcomm, Intel, AMD, Nvidia, MediaTek and Texas Instruments. What India lacked was manufacturing: no commercial fabrication plant, and only a handful of small assembly and testing operations, meant that virtually every finished chip used in the country was imported, largely from Taiwan, which alone supplies around 90 percent of the advanced chips India consumes.

That gap is what the India Semiconductor Mission was built to close. The strategy has been to build out the full value chain in stages – starting with assembly, testing and packaging facilities that can come online relatively quickly, while simultaneously backing India’s first true wafer fabrication plant, and layering on design incentives, equipment and materials manufacturing, and R&D support. As of mid-to-late 2026, that strategy has produced 12 to 13 approved semiconductor manufacturing projects across six or seven states, with three already in commercial production and the flagship fabrication plant more than halfway built.

Government Initiatives Driving the Push

India Semiconductor Mission (ISM) 1.0

The foundation was laid in December 2021, when the Union Cabinet approved the Semicon India Programme with a financial outlay of roughly ₹76,000 crore (about $8.8–8.9 billion). Implemented through the India Semiconductor Mission, a specialised business division set up within the Ministry of Electronics and Information Technology (MeitY), ISM 1.0 covered the entire value chain: silicon fabs, compound semiconductor and display fabs, assembly and testing units, and chip design, with fiscal support of up to 50 percent of project cost for eligible manufacturing units, plus reimbursement of design costs under the Design Linked Incentive (DLI) scheme.

India Semiconductor Mission 2.0

Building on ISM 1.0’s early wins, the Union Cabinet approved a successor programme, Semicon 2.0 (ISM 2.0), in mid-July 2026, with a substantially larger outlay of ₹1,27,500 crore (roughly $13–14 billion). Where the first phase concentrated on creating manufacturing infrastructure – the fabs and ATMP units themselves – ISM 2.0 is designed to build out the wider ecosystem around them: semiconductor manufacturing equipment, specialty materials and chemicals, expanded design and indigenous IP capability, resilient supply chains, additional fabrication capacity, and dedicated R&D centres. The Union Budget for 2026–27 allocated ₹8,000 crore to the semiconductor mission for the year, the largest single-year allocation since the programme began, signalling that funding intensity is rising alongside ambition.

Supporting schemes

Several complementary schemes reinforce the mission. The Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS) and the Production Linked Incentive (PLI) scheme for large-scale electronics manufacturing both aim to deepen domestic value addition and pull in component-level investment. The Electronics Component Manufacturing Scheme (ECMS) has drawn 249 applications for components, base materials and capital equipment such as printed circuit boards, capacitors and laminates. On the talent side, the government has supplied chip-design tools from eight different companies to 315 universities free of cost, and the “Chips to Startup” programme has trained more than 68,000 students in advanced chip-design skills while extending Electronic Design Automation (EDA) tool access to over 320 academic institutions, with the Design Linked Incentive programme separately backing 24 semiconductor design projects and EDA support for 105 start-ups and MSMEs.

India has also stepped up its international positioning: in February 2026, the country joined the “Pax Silica” initiative launched at the India AI Impact Summit, aimed at fostering cooperation on secure and resilient technology supply chains covering semiconductors, critical inputs and AI infrastructure.

Major Investments Reshaping the Map

By mid-2026, the Cabinet had approved 12 semiconductor manufacturing projects across six states, with a cumulative investment of roughly ₹1.64 lakh crore, later rising further after two more projects worth over ₹3,900 crore were cleared in May 2026. The headline projects include:

Tata Electronics-PSMC fab, Dholera, Gujarat: India’s first commercial-scale semiconductor fabrication plant, a joint venture between Tata Electronics and Taiwan’s Powerchip Semiconductor Manufacturing Corporation (PSMC). The project carries an investment of around ₹91,000 crore (roughly $10-11 billion) and is designed for capacity of up to 50,000 wafers a month, starting with 28-nanometre chips for power management ICs, display drivers, microcontrollers and high-performance computing, with a technology roadmap extending toward 22nm. As of mid-2026, construction had crossed the halfway mark, with foundations complete and cleanroom work and equipment calibration under way; trial production is targeted for December 2026, with commercial-scale output ramping through 2027-28. Tata Electronics has signed deals with Dutch lithography leader ASML for advanced lithography systems and separately entered agreements with Intel and Japan’s ROHM to deepen the surrounding silicon and compute ecosystem.
Tata Semiconductor Assembly and Test (TSAT), Jagiroad, Assam: A roughly ₹27,000 crore assembly and packaging facility using indigenous packaging technology, with a planned capacity of around 48 million units a day and an expected 27,000-plus direct and indirect jobs in the region.
Micron Technology ATMP facility, Sanand, Gujarat: A U.S.-based memory major’s assembly, test and packaging plant, with a project cost (including incentives) of about $2.75 billion and central-government investment of roughly ₹22,516 crore. Inaugurated in February 2026, it produces DRAM and NAND flash chips for mobile devices, data centres and automotive uses, and is expected to generate around 5,000 direct jobs plus 15,000 community employment opportunities.
CG Power-Renesas-Stars Microelectronics OSAT facility, Sanand, Gujarat: A joint venture between CG Power and Industrial Solutions, Japan’s Renesas Electronics and Thailand’s Stars Microelectronics, worth around ₹7,584 crore (roughly $900 million), targeting defence, space, EV and high-speed rail applications with a daily capacity in the range of 14–15 million chips at full scale. Its G1 pilot line was inaugurated in August 2025, and the G2 facility is expected to create over 5,000 jobs.
Kaynes Semicon OSAT facility, Sanand, Gujarat: Approved at roughly $394 million (about ₹3,300 crore), this plant reached commercial production in March 2026, just 14 months after breaking ground, and focuses on chip testing and packaging with capacity of around 6 million chips a day. Reports around SEMICON India 2026 suggested Kaynes could triple its investment under ISM 2.0 as export orders grow.
HCL–Foxconn joint venture (“India Chip”), Jewar, Uttar Pradesh: A newer OSAT project whose groundbreaking took place at the Yamuna Expressway Industrial Development Authority (YEIDA) site near the upcoming Jewar airport, extending the semiconductor map beyond Gujarat and Assam into North India.

Taken together, Gujarat has emerged as India’s clearest semiconductor hub, hosting four of the twelve approved projects – three of them clustered in Sanand alone – while Assam, Uttar Pradesh, Odisha, Punjab and Andhra Pradesh host the remaining facilities, each backed by state-level incentives such as capital subsidies, land support, power-tariff benefits and training subsidies layered on top of central funding.

Global Companies Betting on India

Beyond the Applied Materials commitment, a widening circle of global equipment, materials and foundry companies has entered or deepened its India engagement:

Powerchip Semiconductor Manufacturing Corporation (PSMC): The world’s seventh-largest pure-play foundry, and Tata Electronics’ technology partner for the Dholera fab, contributing process technology across 28nm, 40nm, 55nm, 90nm and 110nm nodes.
ASML: The Dutch lithography giant, whose extreme ultra-violet and deep ultra-violet scanners are essential to advanced chipmaking, has agreed to supply lithography systems for the Dholera fab, a deal signed given typical 18–24 month lead times for such equipment.
Lam Research and Fujifilm: Announced fresh India investments around SEMICON India 2026 covering silicon components and specialty materials respectively.
Renesas Electronics (Japan) and Stars Microelectronics (Thailand): Joint-venture partners in the CG Power OSAT facility.
Intel and ROHM: Signed cooperation agreements with Tata Electronics in late 2025 to build out the silicon and compute ecosystem around Dholera.
Qualcomm, Nvidia, AMD, Intel, Texas Instruments and MediaTek: While these companies do not manufacture in India, their large India-based design and engineering centres form the backbone of the country’s fabless design ecosystem and are frequently cited as the reason India already holds a large share of global chip-design talent.

For India, the significance of these commitments goes beyond capital. Equipment and materials suppliers bring detailed technical know-how, help train the local workforce, and build the ancillary supply chains – specialty gases, ultra-pure chemicals, precision components – without which a fab cannot run. Applied Materials’ plan to expand its India-based supply chain roughly tenfold by 2035, for instance, is explicitly framed as a way to pull in more local vendors and global suppliers alike.

Manufacturing and Chip Design: Building Both Ends of the Chain

India’s approach has deliberately targeted both ends of the semiconductor value chain simultaneously.

On the manufacturing side, the country now has, for the first time, a genuine wafer fabrication plant under construction (Tata–PSMC at Dholera) alongside multiple ATMP/OSAT facilities that handle the back-end packaging and testing of chips. ATMP and OSAT plants are typically the fastest layer of the ecosystem to stand up – Kaynes Semicon’s Sanand facility went from groundbreaking to commercial production in just 14 months – which is why India’s earliest commercial wins (Micron, Kaynes, CG Semi) have all come from this segment rather than from fabrication. As of mid-2026, three of the twelve approved facilities were already producing commercially, giving the mission concrete proof points to point to even while the more complex fab project in Dholera continues its multi-year build.

On the design side, India’s strength is longer-standing. Roughly one-fifth of the world’s semiconductor design engineers work in India, largely inside global captive R&D centres, supporting the design of chips that are then fabricated elsewhere. The government’s Design Linked Incentive scheme, along with free EDA tool access extended to over 300 universities and more than 100 start-ups and MSMEs, is aimed at converting some of that engineering talent into India-headquartered, IP-owning fabless design companies rather than purely service-oriented design centres. Institutions such as IISc Bangalore, IIT Bombay and the government’s own Semiconductor Laboratory (SCL) support chip research, alongside newer initiatives like the Semiconductor Fabless Accelerator Lab.

The strategic logic is straightforward: fabrication capacity gives India a physical stake in the global chip supply chain and reduces import dependence, while a stronger design ecosystem lets India capture more value from the segment where it is already competitive, rather than remaining purely an engineering back-office for chips designed and owned elsewhere.

The AI and Semiconductor Connection

Artificial intelligence has become one of the biggest forces reshaping semiconductor demand and investment patterns worldwide, and India’s push is explicitly riding that wave. Applied Materials’ own announcement linked its $5 billion India commitment directly to rising AI-driven demand for advanced chips and for the equipment used to manufacture them. More broadly, AI workloads — training and running large models, powering data centres, and enabling AI features in everyday devices — require enormous volumes of advanced logic and memory chips, high-bandwidth memory, and increasingly sophisticated packaging technologies such as chip-on-wafer-on-substrate (CoWoS) integration.

This has two implications for India. First, the chips being planned for Indian ATMP and OSAT facilities – from CG Semi’s output for defence and high-performance computing to Tata’s Assam facility – are increasingly being framed around AI, high-performance computing and data-centre applications rather than only legacy consumer electronics. Second, India’s semiconductor design workforce is itself shifting toward AI-adjacent skills: employers are now recruiting more AI/ML engineers, data scientists and chip designers who can work on AI-optimised silicon, and semiconductor hiring reports note that roles blending hardware engineering with AI-driven automation are seeing the strongest demand growth. At the same time, global export-control regimes are increasingly targeting AI-specific chips and packaging – Taiwan itself began consultations in mid-2026 on restricting advanced AI accelerator exports to China – which adds a further geopolitical dimension to where AI-chip capacity gets built and by whom.

Employment Opportunities: A Emerging Jobs Engine

Semiconductor manufacturing is capital-intensive but also has a substantial multiplier effect on employment across the wider supply chain. Individual project-level job estimates give a sense of scale: Micron’s Sanand facility is expected to create around 5,000 direct jobs and 15,000 community employment opportunities; Tata’s Assam ATMP plant is projected to generate over 27,000 direct and indirect jobs; CG Power’s fully scaled G2 facility is expected to create more than 5,000 jobs; and the Tata–PSMC Dholera fab, along with Tata’s broader multi-fab vision for the site, has been projected to eventually support over 100,000 skilled jobs.

At a sector-wide level, industry estimates suggest the localisation of semiconductor production could create over 300,000 new jobs in supply chain, procurement, materials management and quality control roles by FY2026, while broader projections point to around 1 million semiconductor-linked jobs by FY2026–27 – split roughly into 300,000 in fabrication, 200,000 in ATMP, and the remainder across chip design, software, supply-chain management and quality assurance. Looking further out, some industry estimates put total sector employment potential – including semi-skilled roles – at well over 6 million people within a few years, comprising both roughly 1.5 million skilled engineers and a much larger base of semi-skilled workers across fabrication, ATMP, design and downstream supply chains.

However, industry voices caution that this growth will not be evenly distributed. Hiring reports note a measurable dip in active job openings at semiconductor design global capability centres due to geopolitical tensions and supply-chain disruption, alongside persistent shortages of fab-ready, packaging-ready and test-engineering talent – meaning the jobs boom depends heavily on how fast India can train workers for genuinely specialised, fab-floor roles rather than only expanding existing design-centre headcounts.

Economic Impact: From Import Dependence to Export Ambition

India’s domestic semiconductor market has grown rapidly and is projected to keep doing so. Industry estimates put the market at around $38 billion in 2023, climbing to roughly $45–50 billion in 2024–25, an estimated $63 billion in 2026, and a commonly cited target of $100–110 billion by 2030 – at which point India would represent roughly 10 percent of a global semiconductor market expected to cross $1 trillion. Some private-sector forecasts are even more bullish: a widely cited UBS estimate projected a 15 percent compound annual growth rate that would roughly double the market from about $54 billion in 2025 to $108 billion by 2030, while other market-research estimates place 2030 values as high as $175 billion depending on methodology and scope.

This growth sits inside a much larger electronics manufacturing story. India is already the world’s second-largest producer of mobile phones by volume, with handset output rising from about ₹18,900 crore in 2014–15 to roughly ₹6.27 lakh crore (about $65 billion) in 2025–26. Electronics has become India’s third-largest export category, with exports of about ₹4.2 lakh crore (roughly $44 billion) in 2025–26. Semiconductor demand specifically is projected to rise from around $44 billion in 2025–26 to about $90 billion by 2029–30, driven by mobile devices, telecom networks, IT infrastructure, automobiles, industrial automation and AI — a demand base large enough, in principle, to anchor a genuinely domestic fabrication and packaging industry rather than one dependent purely on exports.

The economic case is reinforced by risk-reduction logic. India currently imports roughly 90 percent of its advanced chips from Taiwan, a dependence that becomes a strategic vulnerability whenever regional tensions rise or natural disasters strike – as seen when a 7.4-magnitude earthquake in Taiwan in April 2024 briefly halted TSMC’s most advanced fabs and cost the company over $92 million even after insurance. Every additional unit of domestic ATMP and fabrication capacity – such as the new plants in Punjab and Andhra Pradesh approved for MOSFETs, IGBTs and advanced chip packaging – is explicitly framed by policymakers as reducing that exposure while building a more resilient national supply chain for telecom, EV, and defence-related electronics.

Challenges on the Road Ahead

Despite the momentum, India’s semiconductor ambitions face several structural hurdles that industry leaders and analysts flag consistently:

High capital intensity: Semiconductor fabs are extraordinarily expensive to build – advanced facilities can cost upward of $20 billion globally – and returns depend on achieving scale, efficiency and sustained demand, a difficult combination for a market still building its ecosystem from scratch.
Infrastructure gaps: Chip fabrication needs uninterrupted, stable electricity, extremely high-purity water in large volumes, cleanroom-grade facilities and efficient logistics. Gaps in any of these can raise costs, delay timelines, and affect yields, and several industry commentators flag power and water reliability as recurring concerns for India’s fab and ATMP sites.
Talent readiness: While India has deep bench strength in chip design, fab-floor roles – process engineering, yield optimisation, cleanroom operations, advanced testing – require a different, more specialised skill set that the country is still building. Reports note a continuing shortfall in fab-ready, packaging-ready and test-engineering talent even as government and corporate training programmes scale up; some hiring data even shows a temporary dip in design-centre job openings due to geopolitical and supply-chain disruption.
Technology and equipment dependence: Advanced manufacturing equipment, process technology and much of the underlying intellectual property remain concentrated among a small number of global suppliers (equipment makers like ASML, Applied Materials and Lam Research, and foundry-technology partners like PSMC), meaning India’s fabs depend heavily on continued cooperation from a handful of overseas players.
Quality and yield maturity: Industry participants have pointed to a “quality gap” as India’s semiconductor sector remains in a comparatively early developmental stage, with factories still ramping up and process discipline still being established relative to mature hubs like Taiwan and South Korea, which together account for a large majority of global advanced-chip output.
Global competition: India is not the only country chasing diversification. The United States, backed by more than $52 billion in disbursed CHIPS Act grants and loan guarantees, has pulled TSMC, Samsung and Intel into building advanced fabs on American soil; Japan’s Rapidus consortium, backed by roughly $35 billion in government support, is already producing 2-nanometre-class chips; and the EU Chips Act has catalysed fabs from TSMC, Intel and STMicroelectronics. India is competing for the same pool of global capital and technology partnerships as these better-resourced, more experienced ecosystems.

China, Taiwan and the Global Supply-Chain Context

India’s push cannot be understood in isolation from the geopolitics reshaping the wider chip industry. Taiwan still produces around 90 percent of the world’s most advanced semiconductors, a concentration that both underpins its economic importance and exposes the entire global electronics industry to a single point of failure – a vulnerability starkly illustrated by the 2024 Taiwan earthquake, which briefly disrupted 3-nanometre and 5-nanometre production at TSMC. Rising military tension across the Taiwan Strait, alongside a broader wave of “friendly shoring” – the concentration of critical chip manufacturing within allied nations with aligned export-control regimes – has accelerated efforts by the United States, Japan, South Korea, the European Union and India to build fabrication capacity outside the island.

On the other side of the ledger, the United States has steadily tightened export controls on advanced chips, chipmaking equipment and design tools bound for China since 2022, aiming to slow Beijing’s ability to build cutting-edge AI and supercomputing capability, while China has responded in part by restricting exports of critical minerals such as gallium, germanium and antimony that feed into compound-semiconductor manufacturing — a dynamic that directly informed India’s own October 2025 National Critical Mineral Stockpile announcement. Even Taiwan itself began exploring, in mid-2026, new controls on advanced AI-chip and packaging exports to China, underscoring how tightly national security concerns are now woven into ordinary semiconductor trade.

For India, this environment is simultaneously an opportunity and a caution. The opportunity lies in being courted as a “trusted” node for supply-chain diversification – a role explicitly referenced in initiatives like Pax Silica and in Applied Materials’ framing of India as a hub for research, procurement and engineering talent outside traditional centres. The caution is that India is entering a race in which the United States, Japan, South Korea and the EU already have years of subsidy programmes, deeper technology bases and, in several cases, tens of billions of dollars more in committed public funding – meaning India’s window to establish a durable niche, most likely in mature-node fabrication, ATMP/OSAT, and design rather than at the bleeding edge, is real but narrower than headlines might suggest.

Future Outlook: Where India’s Chip Story Goes Next

Government officials have set an explicit ambition for India to rank among the world’s top five semiconductor ecosystems by 2029, built on a foundation of steadily scaling manufacturing capacity, a rapidly growing design base, and deepening international partnerships. Several concrete milestones will determine whether that ambition is met:

The Tata–PSMC Dholera fab reaching trial production around December 2026 and ramping toward stable commercial output through 2027–28 will be the single most closely watched proof point, since it represents India’s first genuine wafer fabrication capability.
ISM 2.0’s ₹1,27,500 crore outlay is expected to catalyse a new wave of investment in equipment, materials, indigenous design IP and additional fabrication capacity, potentially including further fabs beyond Dholera as Tata has spoken of a “multi-fab vision” for the site.
Existing ATMP/OSAT players such as Kaynes, CG Power, Micron, CDIL and Suchi Semicon are reportedly already exporting finished chips while supplying the domestic market, and some, including Kaynes, are considering tripling their investment under ISM 2.0 as order books fill up – a sign the sector may be moving from subsidised capacity-building toward genuine commercial demand.
Continued diversification of geography, with Uttar Pradesh, Odisha, Punjab and Andhra Pradesh joining Gujarat and Assam as manufacturing sites, should widen the base of state-level competition and infrastructure investment supporting the industry.
On the talent side, sustained investment in training – from the 68,000-plus students already trained under Chips to Startup to continued corporate partnerships with global firms like Intel, Micron and Applied Materials – will determine whether India can staff fabs and packaging plants fast enough to match its construction timeline.

Realistically, most analysts see India carving out a meaningful – but not dominant – share of the global semiconductor map over the next decade: strong in chip design, increasingly competitive in mature-node fabrication and back-end packaging, and a genuine alternative sourcing hub for companies looking to de-risk their supply chains away from a small number of East Asian centres, rather than an immediate challenger to Taiwan or South Korea at the most advanced process nodes.

Frequently Asked Questions (FAQs)

Q1. Does India manufacture semiconductor chips yet?

Yes, but selectively. As of 2026, three ATMP/OSAT facilities – Micron, Kaynes Semicon and CG Semi — are in commercial production, mostly handling assembly, testing and packaging rather than manufacturing raw silicon wafers. India’s first true wafer fabrication plant, the Tata–PSMC facility in Dholera, is targeting trial production around December 2026.

Q2. What is the India Semiconductor Mission (ISM)?

It is the government’s dedicated programme, run through MeitY, to build a domestic semiconductor and display manufacturing ecosystem. ISM 1.0 launched in December 2021 with a ₹76,000 crore outlay; ISM 2.0 was approved in July 2026 with a larger ₹1,27,500 crore outlay focused on equipment, materials, design IP and supply-chain resilience.

Q3. Why did Applied Materials commit $5 billion to India?

The company frames its “India Vision 2035” plan as a response to rising AI-driven chip demand and a broader industry trend of diversifying research, supply-chain and talent footprints. The plan covers a new research park, a tenfold expansion of India-based supply-chain capacity, and doubling its India R&D workforce.

Q4. Which are the biggest semiconductor projects in India right now?

The flagship projects include the Tata Electronics–PSMC fab in Dholera (Gujarat), Tata’s assembly and test facility in Jagiroad (Assam), Micron’s ATMP plant in Sanand (Gujarat), the CG Power–Renesas–Stars Microelectronics OSAT facility in Sanand, Kaynes Semicon’s OSAT unit in Sanand, and the HCL–Foxconn joint venture in Jewar (Uttar Pradesh).

Q5. How big is India’s semiconductor market expected to become?

Estimates commonly cite a domestic market of around $100–110 billion by 2030, up from roughly $45–50 billion in 2024–25, representing about 10 percent of a global semiconductor market projected to cross $1 trillion by the same year.

Q6. How many jobs could India’s semiconductor push create?

Project-level estimates range from a few thousand to tens of thousands of direct jobs per facility, while sector-wide projections point to roughly a million semiconductor-linked jobs by FY2026–27 and considerably more, including semi-skilled roles, over the following years.

Q7. What are the biggest risks to India’s semiconductor ambitions?

High capital costs, infrastructure gaps in power and ultra-pure water supply, a shortage of fab-ready and packaging-ready talent, continued dependence on foreign equipment and process technology, and intense competition from better-funded programmes in the United States, Japan, South Korea and the European Union.

Q8. Why does Taiwan matter so much to this story?

Taiwan currently produces around 90 percent of the world’s most advanced chips, and India (like most countries) imports the bulk of its advanced-chip needs from there. Rising geopolitical tension around Taiwan is one of the key reasons India, along with the U.S., Japan, South Korea and the EU, is racing to build domestic and allied semiconductor capacity.

Key Takeaways

SEMICON India 2026 marked a turning point, drawing 600-plus companies from 52 countries and headlined by Applied Materials’ $5 billion “India Vision 2035” commitment.
India’s semiconductor strategy runs on two tracks: building genuine manufacturing capacity (fabs and ATMP/OSAT plants) while reinforcing its existing strength in chip design.
Twelve to thirteen projects worth over ₹1.6 lakh crore have been approved under the India Semiconductor Mission, with three already in commercial production and the flagship Tata–PSMC fab in Dholera over halfway built.
ISM 2.0’s ₹1,27,500 crore outlay shifts focus toward equipment, materials, design IP and supply-chain resilience, building on ISM 1.0’s manufacturing-infrastructure push.
The domestic chip market, valued at roughly $45–50 billion in 2024–25, is widely projected to reach $100–110 billion by 2030.
Job creation estimates range from a few thousand per project to roughly a million sector-wide by FY2026–27, though talent readiness for fab-floor roles remains a genuine constraint.
Structural challenges – capital intensity, infrastructure gaps, talent shortages, equipment dependence and global competition – mean India’s near-term niche is likely to be mature-node fabrication, back-end packaging and design rather than leading-edge manufacturing.
Geopolitical tension around Taiwan and tightening China-focused export controls are actively accelerating global interest in India as a “trusted” alternative node in the semiconductor supply chain.