We’re now on Part 8 of our Semiconductor Series, at the last step before wrapping it up. Today, we will discuss India’s efforts in the global semiconductor value chain. For decades, India has watched from the sidelines as Taiwan, South Korea, and the U.S. have turned silicon into a source of sovereignty. But now, a quiet yet determined shift is underway. With billions in government support, foreign tech partnerships, and a growing talent base, India is laying the foundation for a semiconductor future. The steps that India is taking today are very similar to how Taiwan built TSMC from scratch in the 1980s. This isn’t a sprint. It’s a long relay. While the fabs aren’t humming yet, the direction is clear: India doesn’t just want to keep assembling devices anymore. It wants to power them as well.
But first, a quick recap of our journey so far:
Semiconductor Series Letter 1: History of the Semiconductor Industry
Semiconductor Series Letter 2: The Semiconductor Value Chain
Semiconductor Series Letter 3: Key Players Across the Value Chain
Semiconductor Series Letter 4: The Rise and Fall of Intel
Semiconductor Series Letter 5: TSMC: The Global Semiconductor Giant
Semiconductor Series Letter 6: ARM:The blueprint of modern portable computing
Semiconductor Series Letter 7: Fabless Companies and why are they so Valuable?
Before we delve into India’s strides towards becoming a semiconductor manufacturing powerhouse, let’s revisit the fundamentals and take a quick look at the semiconductor value chain from ‘Semiconductor Series Letter 2’.
The Semiconductor Value Chain – FOUR Key Steps
Where India Stands? – Semiconductor Design
As discussed earlier, designing a semiconductor is very much similar to building a house. Before you lay a single brick, you hire an architect to design it. They decide things like, How many rooms you need, Where the doors and windows go, How the plumbing and electricity will run, etc… etc…
India plays an important role…
India is already an important piece in the global semiconductor design. You may be surprised to know that ~20% of the world’s chip design engineers are based here. Big players like Qualcomm, Intel, Nvidia, Broadcom, and MediaTek have large R&D and design centers in Bengaluru, Hyderabad, and Noida.
…However, cutting edge R&D (mostly) takes place in the USA
If we try to breakdown the division of semiconductor design work between India and the USA (where fabless giants like Nvidia, Qualcomm, Apple, etc are domiciled), this is how the summary looks like:
Engineers in the USA answers questions like, What kind of chip to build?, Who will use it, a smartphone, a server, or a self-driving car?, What features to include?, What performance and power targets to aim for?, how to make it better and faster than the previous model?, etc. Basically, they sketch out the high-level architecture. In addition to technical questions, they also decide the product strategy (when to launch?, whom to sell to?, how to stay ahead of competition?, etc).
On the other hand engineers in India step in once the high level technical and architectural questions are answered. India’s engineering teams take over a huge part of the actual building process. Here’s what Indian engineers do: Translate the architecture into working logic, Simulate and test the chips, Optimize it for speed and power, Write drivers and firmware to make it work with real devices, Support and fine-tune EDA tools that the entire industry uses.
Though it’s not a “boss vs worker” setup but USA defines the “what” and “why” and India executes the “how” with precision and scale.
Chip Manufacturing Giants have bases in India
To get this work done, global fabless companies (like Nvidia) as well as integrated chip majors (like Intel) have established their design centers in India. They do chip design directly (mostly) through their own teams, not through Indian vendors. These are GCCs (Global Capability Centers) which are massive R&D centers, not just back offices. Here’s a list of major players with design centers (GCCs) in India:
These GCCs Employ 100s to 1000s of engineers who do real design work, especially RTL design (writing the blueprint of the chip), verification, physical design and sometimes contribute to core IP (like modem blocks or AI accelerators) as well. However, the final architecture decisions and strategic IP are still controlled from HQs, typically in the USA or other countries.
Signs of Upward Movement
Encouragingly, things are gradually changing slowly but surely. India is no longer just a “backend verification shop.” The directional shift suggests that things are moving toward higher-end architectural design and innovation. Here are some examples:
- Apple India (Bengaluru) is reportedly involved in custom silicon design for camera and connectivity modules.
- AMD’s biggest global design center is now in India. They’re expanding leadership roles.
- Intel India has played a role in the development of its Xeon and client CPUs.
- Google and ARM have expanded local silicon teams with senior leadership presence.
Home Grown Names
In addition to the above, Though India does’nt have a fabless player with similar likes of Qualcomm or Nvidia, there are definately a handful of local early-stage fabless players. Following is the list:
In addition to the above companies, there are also companies like Trident Techlabs that offer services like ASIC design, PCB/signal-integrity, simulation, and EDA tool support, targeting sectors like defense and telecom. Together, they illuminate how India is progressively building IP, platforms, and services, laying the foundation for a credible domestic semiconductor ecosystem.
Where India Stands? – Semiconductor Manufacturing
This is the stage of actual chip construction. Chip manufacturing happens in an ultra-clean, high-tech factory which in technical terms is called a “foundry”. This is the hardest and the most capital-intensive part of the value chain. Though India has never manufactured chips at commercial scale, but for the first time ever, it is now laying the groundwork to build that capability from scratch.
Government Push
In 2021, the Indian government launched the Semicon India Programme (also referred to as Indian Semiconductor Mission (ISM) 1.0) with ~Rs. 76,000 Cr in incentives to attract global manufacturers, build fabs, packaging units (OSAT & ATMP, discussed later in detail), and a local supply chain to reduce reliance on imports. The intial focus is on mature-node fabs (28nm to 65nm), not bleeding-edge nodes like 5nm or 3nm, which are dominated by TSMC and Samsung.
India’s First Commercial Fab – Loading…
TATA Electronics + Powerchip Semiconductor Manufacturing (PSMC, Taiwan)
This is expected to be India’s first truly commercial foundry (fab) targetted towards making chips for EVs, telecom, industrial, etc uses.
Node: Starting with 28nm and above (mature analog/power chips)
Expected Investment: ~Rs. 91,000 Cr
Status (2025): Construction started; target production in 2026
Though today there is not much to share as far as India’s progress in establisihing semicinductor fab is concerned, one thing is clear, India’s semiconductor ambitions are taking shape with a strategic focus on mature-node manufacturing, a smart move considering the vast demand for 28nm–65nm chips in sectors like automotive, telecom, industrial electronics, etc. While global giants dominate the cutting-edge node space, India is wisely positioning itself to manufacture mature nodes and filling a big gap.
Where India Stands? – Semiconductor Assembly and Testing
After the silicon wafer comes out of the foundry, it now has a lot of miniature brains on a wafer. But you can’t plug a wafer into your phone, you need to slice, wrap, and test them before starting to use them.
Building OSAT and Other Capabilities
Though India may not yet boast the presence of large-scale fabs like Taiwan or South Korea, but it’s carving out a significant presence in semiconductor assembly and testing (OSAT and ATMP) and other vital supporting materials like chemicals.
Government Push
Establishing OSAT and ATMP facilities is a key component of the GoI’s ISM 1.0 program, which offers up to 50% funding for CAPEX. This initiative is designed to make applicant companies highly attractive to investors in OSAT or packaging units. In addition to central government incentives, state governments are offering their own subsidies and incentives to attract investments in semiconductor infrastructure. These policies and incentives vary from state to state.
Some Upcoming OSAT & ATMP Projects
Micron Technology (USA)
Facility: ATMP (Assembly, Testing, Marking and Packing, subset of OSAT) facility in Sanand, Gujarat.
Focus: Import wafers from overseas fabs and package them in India.
Expected Investment: ~Rs. 22,500 Cr (50% from Micron and 50% from Govt)
Status (2025): Construction well underway; expected to start packaging DRAM (Dynamic Random Access Memory) and NAND (Not AND) chips by 2026.
CG Power + Renesas (Japan) + Stars Microelectronics (Thailand)
Facility: OSAT (Outsourced Semiconductor Assembly & Testing) facility near Hyderabad.
Focus: Assembly and testing of microcontrollers and analog/power chips.
Expected Investment: ~Rs. 7,600 Cr
Status (2025): Project recently approved (2024); construction expected to start soon
TATA Electronics
Facility: ATMP (Advanced Packing) facility in Tamil Nadu and Assam.
Focus: Chips for automotive, telecom, and defence
Expected Investment: ~Rs. 7,600 Cr
Status (2025): Pre-construction / under development
Kaynes Technology
Facility: OSAT facility in Sanand, Gujarat.
Focus: Export business
Expected Investment: ~Rs. 3,400 Cr (70-75% funded by Govt – Center + State)
Status (2025): Construction underway. To be ready by the end of 2025
Building Support – Semiconductor Chemicals
You might or might not be aware but indian chemical companies are also taking notable strides in developing a comprehensive ecosystem to support semiconductor manufacturing. Semiconductor manufacturing requires a wide range of specialized chemicals for processes like etching, cleaning and other purposes during the fabrication of chips. India is focusing on the domestic production of semiconductor-grade chemicals to reduce dependency on imports, particularly from countries like Japan and the U.S.
India has several companies that are stepping up to support the semiconductor chemicals manufacturing ecosystem. Some key players include:
These foundational efforts in OSAT, ATMP and Chemical Manufacturing are laying the groundwork for a robust semiconductor ecosystem which will equip India to manage and scale fabs when they are established at a larger scale. In the long run, these initiatives will empower India to become a crucial node in the global semiconductor value chain.
Following the footsteps of Taiwan and South Korea
India’s semiconductor ambition today is quite similar to where Taiwan and South Korea were in the 1970s–1990s. If we compare India’s early efforts today with the early days of Taiwan and South Korea, we find the following similarities:
India today is where Taiwan was in the 1980s and South Korea was in the early 1990s. The intent, partnerships, and capital are finally in place. Now, it comes down to patience, policy continuity, and execution.
Where India Stands? – System Integration
India’s role in system integration within the semiconductor value chain is rapidly evolving, positioning the country at the forefront of global capabilities. With a deep pool of talent and a robust ecosystem, India excels in integrating semiconductor components into high-tech systems for sectors like automotive electronics, telecommunications, consumer devices, and medical technologies. India is already delivering world-class, high-quality integration services. What sets India apart is its ability to match global standards, both in capability and talent, and its swift progression towards scaling these operations to meet the growing demand for advanced semiconductor-based solutions. The following data shows how the global EMS industry is expected to progress, particularly, India:
The China +1 strategy has become a powerful global trend, pushing companies to diversify their supply chains and look for alternatives to China. This has fueled India’s growth in system integration, as the country is increasingly seen as a reliable and cost-effective partner in the global supply chain. While China will likely continue to dominate the global system integration market for the foreseeable future, India’s significance is only increasing. With its growing infrastructure, talent pool, and competitive advantage, India is well poised to capture a larger share of the global market, positioning itself as a key player in the years to come. Promenent companies include:
Consumer Sector: Dixon Technologies, VVDN Technologies, Foxconn India, Micromax, PG Electroplast, etc.
Industrial, Automotive and Other Complex Applications: Siemens India, Cyient DLM, Kaynes Technology, DCX Systems, Avalon Technologies, etc
Medical: GE Healthcare India, Siemens Healthineers India, BPL Medical Technologies, Philips India, Syrma SGS Tech, etc.
Conclusion
As India continues to carve out its niche in the global semiconductor value chain, its journey is going to be nothing short of remarkable. From designing cutting-edge semiconductor technologies to manufacturing key chemicals, building OSAT capabilities, and scaling up system integration across diverse sectors like automotive, telecommunications, and consumer electronics, India’s role is growing stronger each day. With increasing global shifts like China +1, the country is not just catching up but is well on its way to becoming a critical player in the global semiconductor ecosystem. While India may not yet be home to the world’s largest semiconductor fabs, its foundational steps in OSAT, chemical manufacturing, and developing a skilled workforce positions it as a hub of innovation, offering both high-quality solutions and cost-effective alternatives. The future looks promising, and India’s semiconductor ambitions are set to thrive with global partnerships, a robust ecosystem, and a highly skilled workforce.
We hope this Semiconductor Series has been a valuable, easy-to-understand, and insightful journey for you, and that the edition today provided clarity on India’s growing influence in the global semiconductor value chain.
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