A few years ago, the idea of a semiconductor made in India belonged to the future tense. Today it is being built in the present. At Sanand in Gujarat, a Micron packaging plant is already operational; at Dholera, a full-scale fabrication unit is taking shape; and across seven states, factories that will assemble, test and package the chips of tomorrow are under construction. India’s push to become a global hub for semiconductor manufacturing has, in a remarkably short span, crossed the line from policy paper to poured concrete.
The scale of the shift is best measured against where the country began. When the India Semiconductor Mission (ISM) was launched in 2021 with an outlay of ₹76,000 crore, the country had no commercial chip fabrication to speak of and imported almost every semiconductor it used. In the years since, the Government has approved a cluster of projects that together represent committed investment of about ₹1.6 lakh crore, and in the 2026-27 Budget it launched ISM 2.0 — with an ₹8,000 crore single-year allocation, the largest since the programme began — to widen the effort into equipment, materials, design and skills. The question is no longer whether India will make chips, but how quickly and how deep the ecosystem can grow.
The timing gives the effort added weight. As the world rethinks concentrated chip supply chains and looks to diversify beyond a handful of geographies, a large, stable and skilled economy able to make semiconductors is an attractive proposition to global manufacturers. For India, a home-grown industry means more than jobs and exports: it means greater resilience against supply shocks, a stronger hand in electronics, automobiles and defence, and a firmer footing in the technologies that will define the coming decades. The mission, in that sense, is as much about strategic self-reliance as commerce.
STARTING WITH THE BACK-END
India’s strategy has sensibly begun where it can win first: in assembly, testing, marking and packaging, the ‘back-end’ of the chip industry. On February 28, the Prime Minister inaugurated Micron’s assembly and test facility at Sanand, backed by investment of over ₹22,500 crore — the first plant of the current mission cycle to become operational, and a milestone that put India firmly on the semiconductor map. It is being followed by a wave of similar units: a CG Power venture with Renesas and Stars Microelectronics, Kaynes Semicon in Gujarat, an HCL-Foxconn joint venture near Jewar in Uttar Pradesh making display-driver chips, and a ₹27,000 crore Tata facility at Jagiroad in Assam — the north-east’s first, expected to create some 27,000 jobs.
The logic is sound. Packaging and testing are less capital-intensive than fabrication, quicker to build, and play to India’s strengths in precision manufacturing and skilled labour. They give the country an early, viable foothold in the global supply chain, generate employment at scale, and build the industrial muscle and supplier relationships on which more advanced stages can later rest.
THE FABRICATION FRONTIER
The hardest and most prized stage is fabrication itself — the etching of circuits onto silicon wafers — and here too India has made a decisive move. At Dholera, Tata Electronics, in partnership with Taiwan’s Powerchip (PSMC), is building a fab with an investment of around ₹91,000 crore and a planned capacity of 50,000 wafers a month, targeting first silicon by late 2026. Notably, the plant is aimed at mature-to-advanced nodes of 28 nanometres and above, rather than the bleeding-edge chips of a few nanometres. This is a shrewd choice: such chips power cars, industrial machines, display drivers, power electronics and the internet of things — vast, growing markets where demand is durable and competition less punishing than at the frontier.
Building a fab is among the most demanding feats in modern industry, requiring ultra-pure water, uninterrupted power, exacting cleanliness and a deep bench of specialist engineers. India is learning these disciplines in real time. According to the Union electronics ministry, four plants are expected to be operational by the end of 2026 and two more in 2027, with the first full fabrication unit at Dholera maturing by 2028. To ease the path, several states have readied dedicated semiconductor parks with assured power, water and connectivity, while the Centre’s incentives cover a substantial share of project cost. Each step up this ladder brings the country closer to making, at home, the chips it has long imported.
INDIA’S ENDURING ADVANTAGE: DESIGN
If manufacturing is the newer chapter, chip design is India’s established strength — and its single greatest asset in this race. Indian engineers already account for close to a fifth of the world’s semiconductor design talent, quietly shaping chips used in devices across the globe. The Government’s Design Linked Incentive (DLI) scheme has begun converting that talent into home-grown products, supporting up to half of a firm’s design expenditure; DLI-backed entities have already completed 16 tape-outs, fabricated six ASIC chips and drawn in more than three times as much private investment as public support. The Chips-to-Startup programme, now spanning 113 academic institutions, and dedicated VLSI courses at IITs are widening the pipeline further. A country that can design chips is far better placed to eventually own the intellectual property behind them, not merely assemble them for others.
THE PIECES STILL TO PLACE
A semiconductor ecosystem is a chain, and India is still forging some of its links. The country continues to import much of what a fab consumes — silicon wafers, speciality gases and chemicals, photoresists, masks and the sophisticated equipment that lithography demands — and a domestic supplier base for these materials is only beginning to form. Fabrication also calls for a particular kind of talent, the process and equipment engineers who keep a plant’s yields high, and their numbers will need to grow rapidly as fabs come online. These are not obstacles so much as the natural agenda of a maturing industry, and they are precisely the areas ISM 2.0 has been designed to strengthen.
THE ROAD AHEAD
The prize is considerable. India’s own semiconductor market, worth around $45-52 billion today, is projected to cross $100-120 billion by 2030 and to keep climbing thereafter, while the global market marches towards a trillion dollars. To capture a lasting share, the country can build purposefully on the foundation it has laid: deepening the materials, gases and equipment supply chain so that fabs source more at home; scaling process-engineering talent through industry-linked training; sustaining stable, long-horizon incentives that give investors confidence; nurturing a base of domestic suppliers and startups around each plant; and securing steady access to the critical minerals and inputs the industry depends on.
The direction of travel is unmistakable, and it is forward. In the space of four years India has assembled the beginnings of an industry that many thought would take a decade — a working packaging plant, a rising fab, a thickening cluster of projects and a design workforce second to few. The task now is patient continuity: to keep building, link by link, until the chip stamped ‘Made in India’ is not a headline but a habit. On present evidence, that ambition is well within the country’s reach.
Sources: India Semiconductor Mission (ISM) / MeitY; PIB; Invest India; NITI Aayog; Union Budget 2026-27; company disclosures (Tata Electronics-PSMC, Micron, CG Power-Renesas, HCL-Foxconn)
Progress so far
From a standing start in 2021, India has built the beginnings of a semiconductor industry across the value chain. The headline milestones:
- Projects: Approximately 13 approved across 7 states under ISM & SPECS; committed investment of around ₹1.6 lakh crore.
- First plant live: Micron’s assembly-and-test facility at Sanand, Gujarat (>₹22,500 crore), inaugurated February 28, 2026.
- Flagship fab: Tata-PSMC at Dholera — around ₹91,000 crore, 50,000 wafers / month, 28nm & above; first silicon targeted late 2026.
- Packaging wave: CG Power-Renesas and Kaynes (Gujarat), HCL-Foxconn making display drivers (UP), and a ₹27,000-crore Tata OSAT at Jagiroad, Assam — the north-east’s first.
- Policy: ISM 2.0 launched in Budget 2026-27 with an ₹8,000-crore outlay — the largest single-year allocation yet.
- Timeline: 4 plants operational by end-2026, 2 more in 2027, first full fab at Dholera by 2028 (electronics ministry).
- Design edge: Indian engineers are around 20 per cent of the world’s chip-design talent; DLI has yielded 16 tape-outs and 6 ASICs.
- Market: domestic demand around $45-52 billion today, projected to cross $100-120 billion by 2030; 80,000+ direct jobs and several lakh indirect.
Strengtheningthe next phase
The mission’s second phase can convert a strong start into an enduring industry. Priorities that would most deepen the ecosystem:
- Grow the supply chain: Develop domestic sources of silicon wafers, speciality gases, chemicals, photoresists, masks and fab equipment, so that plants source ever more of their inputs at home rather than abroad.
- Scale the right talent: Expand industry-linked training for the process and equipment engineers and technicians who keep fab yields high, complementing the design talent India already has in abundance.
- Sustain stable incentives: Keep policy support long-horizon and predictable under ISM 2.0, giving investors the multi-year confidence that the economics of a fab require.
- Nurture suppliers & startups: Build clusters of domestic vendors and fabless design startups around each plant, anchored by the Chips-to-Startup pipeline across 113 institutions.
- Secure critical inputs: Ensure reliable, long-term access to the critical minerals, ultra-pure water and uninterrupted power on which fabrication depends.
- Leverage the design edge: Convert world-class design talent into home-owned intellectual property and finished products, moving India up the value chain from services to ownership.