India has moved beyond just talking about plans to manufacture semiconductors and is starting to show results. The Minister of Electronics and Information Technology, Ashwini Vaishnaw, has announced that the country now has 12 semiconductor manufacturing projects mobilizing around 20 billion dollars in investments, of which three are already producing chips commercially. The announcement coincides with the approval of Semicon 2.0, the new phase of the industrial strategy through which New Delhi aims to establish itself as a significant player in the global semiconductor supply chain.
The key points of India’s semiconductor plan in 20 seconds
- India has approved 12 industrial projects related to semiconductor manufacturing.
- Three facilities are already producing chips commercially, and others are progressing toward operational status.
- The government has approved Semicon 2.0 to expand manufacturing, design, and the supply chain.
- The goal is to reduce reliance on foreign sources and attract new international investments.
Just four years ago, India lacked almost any industrial capacity to produce chips. Today, the country is trying to replicate the model it previously followed in the electronics and smartphone industries: attracting foreign investment, developing local vendors, and creating an ecosystem capable of competing internationally.
From announcements to production
The Semicon India program, launched in 2022, was created with a clear mission: to turn India into a new global hub for the semiconductor industry.
According to the Indian government, the program has already approved 12 industrial projects with investments exceeding 164 billion rupees (about 20 billion dollars), spread across wafer factories, advanced packaging (OSAT), power semiconductors, and new technologies like silicon carbide (SiC) or gallium nitride (GaN).
The three earliest plants already producing commercially include:
| Company | Type of Facility | Status |
|---|---|---|
| Micron Technology | Memory Assembly and Testing | Commercial Production |
| Kaynes Semicon | Packaging and Testing (OSAT) | Commercial Production |
| CG Semi | Packaging and Testing (OSAT) | Commercial Production |
Additionally, other facilities promoted by Tata Electronics, HCL-Foxconn, SicSem, Crystal Matrix, and Suchi Semicon continue progressing within the national program.
Semicon 2.0 broadens the ambition
The next phase is already underway.
The government officially approved Semicon 2.0 in July with a budget of 1.27 trillion rupees, significantly higher than the initial program. Unlike the first phase, which focused mainly on attracting manufacturers, this new strategy aims to develop the entire semiconductor value chain.
The six main pillars of the new program include:
- Chip design.
- Manufacturing equipment for semiconductors.
- Materials production.
- Development of national intellectual property.
- Strengthening the supply chain.
- Training specialized talent.
The aim is to address one of India’s key weaknesses: its heavy dependence on foreign suppliers for critical materials, machinery, and technologies.
A geopolitical as well as industrial bet
India’s semiconductor race is driven by more than economic motives.
Tensions between the United States and China, export restrictions on advanced technologies, and disruptions during the pandemic have convinced many economies that relying on a single country for chip manufacturing poses a strategic risk.
The US has advanced the CHIPS and Science Act, the European Union is developing the European Chips Act, Japan is funding projects like Rapidus, and South Korea continues to expand its leadership in memory chips.
India now aims to carve out its own space within this new industrial landscape.
Its competitive advantage is not solely based on public incentives. It also boasts a large base of engineers, an expanding domestic market, and an increasingly significant role in global electronics manufacturing.
The challenge now is moving from packaging to cutting-edge fabs
Although progress is notable, it’s important to put these achievements into context.
Most of the currently operational projects belong to the OSAT (Outsourced Semiconductor Assembly and Test) segment, focused on chip assembly, packaging, and testing.
Manufacturing advanced wafers remains considerably more complex.
The most ambitious project is led by Tata Electronics, which is developing a wafer fabrication plant in Gujarat in partnership with Taiwanese firm PSMC, with a capacity of 50,000 wafers per month. Also notable is Tata’s packaging plant in Assam, designed to produce up to 48 million chips per day once it reaches full capacity.
Building a competitive industry will still take several more years of investments, training, and building local suppliers.
Next challenge: attracting design and AI talent
Another shift compared to the initial program is the growing focus on chip design.
The government reports that more than a hundred startups are already using professional electronic design automation (EDA) tools within the national program, with several developing processors for communications, satellites, IoT, artificial intelligence, drones, or automotive applications.
The goal is for India not only to assemble or manufacture but also to participate in the development of intellectual property—one of the most high-value segments of the entire industry.
Frequently Asked Questions
How many semiconductor factories has India approved?
Currently, there are 12 approved industrial projects under the Semicon India program, with investments nearing 20 billion dollars.
How many are already producing chips?
According to the Indian government, Micron, Kaynes Semicon, and CG Semi have already begun commercial production.
What is Semicon 2.0?
It is the second phase of India’s national semiconductor strategy, focused on expanding manufacturing, developing suppliers, promoting chip design, and strengthening the entire supply chain.
Can India compete with Taiwan or South Korea?
In the short term, likely not. India is still in an early stage, and most projects currently focus on packaging and testing. However, the country aspires to become one of the leading global centers for semiconductor manufacturing and design within the next decade.
