In December 2021, India made a bet that looked audacious to many observers: the Union Cabinet approved ₹76,000 crore to build a domestic semiconductor ecosystem from the ground up. At the time, India imported virtually 100% of its chips. Three years later, the results are starting to show — three facilities are already in commercial production, India's first full-scale fabrication plant is under construction, and the Cabinet has just doubled down with ₹1,27,500 crore more in funding.
This is not a story about promises. Chips are coming off lines in Gujarat right now.
What is India's semiconductor mission?
India's semiconductor mission is a government-backed program to build a complete domestic chip ecosystem — from design and fabrication to packaging, testing, and talent development. It runs in two phases: Semicon 1.0 (approved December 2021, ₹76,000 crore) and Semicon 2.0 (approved July 15, 2026, ₹1,27,500 crore), both administered by the India Semiconductor Mission (ISM) under the Ministry of Electronics and IT.
As of July 2026, 12 manufacturing projects have been approved across six states with cumulative investments exceeding ₹1.64 lakh crore (~$19.5 billion). Three of those facilities are already commercially producing chips. The program covers everything from silicon wafer fabrication to compound semiconductors, display panels, and chip design startups.
The six strategic pillars of Semicon 2.0
Semicon 2.0, approved on July 15, 2026, with a fiscal outlay of ₹1,27,500 crore (~$13.3 billion), is built around six pillars that represent a shift from "attracting fabs" to "building an entire ecosystem":
Design — Deepening the chip design ecosystem. Semicon 1.0 already supported 24 design startups; 105 startups now have access to EDA (electronic design automation) tools. The focus shifts to full-stack Indian semiconductor IP.
Machines and Materials — The biggest structural gap exposed by Semicon 1.0: India still imports most of its equipment, specialty gases, photoresists, and chemicals. Semicon 2.0 incentivizes domestic manufacturing of these inputs to build a sustainable foundation.
Setting Up More Fabs — With the first silicon fab scheduled for commissioning in 2028, Semicon 2.0 attracts more manufacturers. Silicon fabs get 40% Capex support on a pari-passu basis; other fabs get 35%.
ATMP/OSAT Industry — Assembly, testing, marking, and packaging (ATMP) and outsourced semiconductor assembly and test (OSAT) facilities get 35% Capex support for advanced packaging, 25% for conventional packaging. The world is already looking at India as an alternative packaging hub.
Research and Development — The journey started at 28nm-110nm nodes. Semicon 2.0 pushes toward more advanced nodes and collaborates with leading R&D centers within and outside India. The long-term target: 3nm and 2nm manufacturing capability by 2035.
Talent Development — 320 universities are now training students on chip design using the latest EDA tools, with 70,000 students already trained. The count of universities where students can design, manufacture, and validate chips: 298 — more than the combined total of the US, China, Japan, Taiwan, and South Korea.
The 12 approved projects: what's actually being built
Gujarat — The semiconductor capital
Gujarat leads India's chip push with four of the 12 approved projects, three of them in Sanand alone. Sanand is becoming India's first true ATMP hub.
Tata-PSMC Dholera Fab — India's first commercial semiconductor fabrication plant. Investment: ₹91,000 crore (~$11 billion). Technology partner: Powerchip Semiconductor Manufacturing Corp (PSMC), Taiwan. Capability: 28nm-55nm logic chips, targeting 50,000 wafer starts per month. Status: approximately 50% construction complete as of April 2026, with first wafers targeted for late 2026 to early 2027. The project received SEZ status on April 9, 2026, and signed an MoU with ASML on May 16, 2026, for lithography equipment supply and talent development.
Micron Sanand ATMP — The first project approved under India Semiconductor Mission and the first to reach commercial production. Investment: ₹22,516 crore (~$2.75 billion). Inaugurated by PM Modi on February 28, 2026. Processes DRAM and NAND wafers into finished memory and storage products for global markets, with capacity of approximately 14 million units per week. Government covered roughly 40% of project cost through capital subsidies and incentives.
Kaynes Semicon OSAT — Investment: ₹3,300 crore. Inaugurated March 31, 2026. Reached commercial production in just 14 months after breaking ground — shipping India's first commercially produced multi-chip modules to Alpha & Omega Semiconductor in October 2025, then scaling to 6.3 million chips per day at full ramp.
CG Semi OSAT — Joint venture between CG Power (Murugappa Group, 92.3% stake), Japan's Renesas Electronics, and Thailand's Stars Microelectronics. Investment: ₹7,600 crore. G1 facility began commercial production on July 4, 2026, with first shipment dispatched June 19, 2026, to Renesas customers. Initial capacity: 200 million chips per year, scaling to G2 for up to 15 million chips per day at peak.
Assam — The northeast hub
- Tata Electronics Jagiroad — Assembly and testing facility in Morigaon district. Investment: over ₹27,000 crore. Expected capacity: 48 million chips per day for automotive, electronics, and telecom sectors. Pilot production expected mid-2026, with commercial production by end of 2026.
Uttar Pradesh — The NCR corridor
- HCL-Foxconn Jewar — OSAT facility near Noida International Airport. Investment: ₹3,700 crore. Will produce display driver chips with capacity of 20,000 wafers per month. Operations expected by 2028.
Andhra Pradesh and Odisha — The emerging clusters
ASIP (Andhra Pradesh) — Advanced System in Package Technologies. Investment: ₹480 crore. Capacity: ~96 million units per annum.
SiCSem (Odisha) — ATMP facility for silicon carbide diodes and MOSFETs. Investment: ₹2,066 crore. Backed by Archean Chemical Industries.
3D Glass Solutions (Odisha) — India's first advanced 3D chip packaging unit. Intel-backed. Groundbreaking in Bhubaneswar, April 2026.
Crystal Matrix (Gujarat) — Compound semiconductor fab based on GaN technology for Mini/Micro-LED display modules. Investment: ₹3,068 crore. India's first display assembly facility.
Suchi Semicon (Gujarat) — OSAT facility in Surat for discrete semiconductors. Investment: ₹868 crore.
Why does this matter right now?
Three forces converge to make India's semiconductor push timely:
Global demand is exploding. The global semiconductor market, valued at approximately $600 billion in 2024, is projected to reach $1.1 trillion by 2030. AI workloads, data center expansion (1.5 GW to 9 GW in India alone), electric vehicles, and 5G/6G deployment are driving unprecedented demand. India's own semiconductor consumption grows from $45 billion in 2025 to $100-103 billion by 2030 — a 13% CAGR.
Supply chains are being rerouted. US export controls on China, the China+1 corporate strategy, and the concentrated risk of Taiwan's 90%+ share of advanced chip production have created a once-in-a-generation opportunity. Every major economy — the US (CHIPS Act), EU, Japan (Rapidus), and India — is subsidizing new capacity.
India has the design talent. Approximately 20% of the world's chip design engineers are in India, working out of Global Capability Centers in Bengaluru, Hyderabad, Pune, and Delhi-NCR. The challenge has been turning this design workforce into domestic manufacturing capability. That bridge is now being built.
What about the design ecosystem?
India's immediate competitive edge is not in fabrication — it is in chip design. The Design Linked Incentive (DLI) scheme supports startups and MSMEs with EDA tool access, seed funding, and deployment-linked incentives of up to ₹15 crore per company.
Results so far:
- 24 semiconductor design projects approved for financial support
- 105 startups and MSMEs given access to EDA tools
- 16 tape-outs completed, resulting in 6 chips fabricated at advanced foundry nodes, including technologies as advanced as 12nm
- 75 patents filed by academic institutions, 10 by startups
- Products in development span satellite communications, drones, surveillance cameras, IoT devices, LED drivers, AI systems, telecom equipment, and smart meters
Notable indigenous IP includes the DHRUV64 microprocessor architecture and the DHANUSH and DHANUSH+ System-on-Chips (SoCs), built for domestic defense grids, smart utilities, and secure government infrastructure.
How long will it take to see results?
India's semiconductor strategy is explicitly a 30-year play, but meaningful milestones are arriving now:
| Timeline | Milestone |
|---|---|
| December 2021 | Semicon 1.0 approved — ₹76,000 crore |
| September 2023 | Micron Sanand groundbreaking |
| February 2024 | Cabinet approves Tata-PSMC Dholera fab |
| March 2024 | PM Modi lays foundation stone at Dholera |
| August 2025 | CG Semi G1 pilot line inaugurated |
| October 2025 | Kaynes ships first Made-in-India multi-chip modules |
| February 2026 | Micron Sanand reaches commercial production |
| March 2026 | Kaynes Semicon OSAT commercial production begins |
| May 2026 | Tata-ASML partnership signed |
| July 4, 2026 | CG Semi G1 commercial production begins |
| July 15, 2026 | Cabinet approves Semcon 2.0 — ₹1,27,500 crore |
| Late 2026 — early 2027 | Tata-PSMC Dholera fab: first wafers |
| 2028 | First full-fledged fab commissioned |
| 2030 | India semiconductor market hits $100 billion |
| 2032 | India among top 4 semiconductor manufacturing nations |
| 2035 | India "among the best" in semiconductor manufacturing |
The targets for 2032 and 2035 come directly from Union Minister Ashwini Vaishnaw, stated on January 2, 2026. The market projections align with multiple analyst estimates (Economic Times, MarkNtel, IESA).
What could go wrong?
No semiconductor journey is frictionless. The challenges are real:
Supply chain dependencies. Cleanroom garments, high-purity gases, precision quartz components, and specialized shipping containers still require imports. The long-term profitability of India's semiconductor industry depends on how quickly local SMEs can scale to provide these inputs domestically.
Workforce gap. ISM estimates the domestic chip sector will need over 100,000 specialized engineers and cleanroom technicians in the next five years. While 298 universities now teach chip design, bridging the gap between classroom theory and hands-on cleanroom operations remains urgent.
Capital intensity. A fab is orders of magnitude more complex than a packaging plant. The Tata-PSMC Dholera fab requires mastering thousands of manufacturing steps. If it succeeds, it changes India's position fundamentally. If it stumbles, confidence wavers.
Geopolitical risk. Technology partnerships with Taiwan's PSMC and Japan's Renesas are productive now, but semiconductor geopolitics shifts quickly. Export controls, bilateral agreements, and trade policies can alter the calculus at any time.
What this means for the world
India is not trying to build a 3nm fab overnight. That would be unrealistic. Instead, the strategy is layered: start with packaging and testing (ATMP/OSAT) where you can build capability and train workers, layer in mature-node fabrication (28nm-55nm) for automotive and IoT, invest in design IP where you already have talent, and only then push toward advanced nodes.
This is exactly how South Korea, Taiwan, and China built their semiconductor industries — step by step, over decades, government and industry working together.
The difference is that India is starting from a larger domestic market, a bigger talent base, and a more favorable geopolitical moment. If three facilities can reach commercial production within 14-27 months of groundbreaking, and if the Dholera fab produces its first wafer in 2027, India will have done in five years what took others twenty.
The next 18 months will be decisive. Watch Dholera.
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