How India Can Become a Key Player in the Global Semiconductor Industry

Introduction

In today’s tech-driven world, semiconductors are the backbone of everything digital — from smartphones and electric vehicles to data centers and defense systems. The global semiconductor market, valued at over $600 billion, is projected to grow exponentially as the world moves toward automation, AI, and Internet of Things (IoT).

For India, this presents a once-in-a-generation opportunity. With its massive talent pool, growing digital infrastructure, and supportive government policies, India is poised to emerge as a major player in the global semiconductor ecosystem.

But what exactly will it take for India to achieve that status? Let’s explore.

1. Government Push Through “Make in India” and PLI Schemes

One of the strongest pillars of India’s semiconductor ambition is government support.

The Production Linked Incentive (PLI) scheme for semiconductors, worth over ₹76,000 crore, aims to attract global chip manufacturers to set up fabrication and assembly plants in India.

The government has also launched the India Semiconductor Mission (ISM), which focuses on building an end-to-end ecosystem — from chip design to manufacturing and packaging.

Key initiatives include:

• Fiscal support for semiconductor fabs and display fabs
• Design-linked incentives (DLI) for chip startups
• Encouraging foreign investments from global chip leaders

👉 With a strong policy framework in place, India is creating the right foundation to integrate itself into the global semiconductor value chain.

2. Building a Skilled Workforce for Chip Manufacturing

India’s biggest strength lies in its people. The country produces over 1.5 million engineers every year, many of whom work in electronics, design, and software.

However, chip manufacturing requires specialized skills — in areas like wafer fabrication, lithography, and process engineering.

To bridge this gap, several institutions and corporates are now collaborating to build semiconductor talent pipelines through:

• Dedicated courses in semiconductor design and manufacturing
• Skill development centers under Semicon India Future Skills Program
• Partnerships with global universities and chipmakers

With a focus on research-driven education, India can soon become a talent powerhouse for the semiconductor industry.

3. Encouraging Public-Private Partnerships

For India to become a semiconductor hub, collaboration is key.

Joint ventures between the public and private sectors can accelerate progress by combining government support with private innovation and capital.

Some notable developments include:

• Micron’s investment in a semiconductor assembly and test facility in Gujarat
• Vedanta-Foxconn’s initiative to establish India’s first semiconductor fab
• Global chip companies like AMD, Intel, and Applied Materials expanding their R&D operations in India

These partnerships not only create high-value jobs but also help India gain access to advanced semiconductor technologies.

4. Strengthening Infrastructure and Supply Chain Ecosystem

Semiconductor manufacturing is capital-intensive and infrastructure-heavy. It requires high-quality power, water, cleanrooms, logistics, and waste management systems.

India is taking strides to improve this through:

• Developing semiconductor clusters in states like Gujarat, Tamil Nadu, and Karnataka
• Creating Special Economic Zones (SEZs) for electronics manufacturing
• Streamlining import-export processes for raw materials and equipment

By building an integrated supply chain — from raw materials to finished chips — India can reduce its dependency on imports and boost local production.

5. Leveraging India’s Design and R&D Capabilities

While India’s chip fabrication ecosystem is still in early stages, the country already plays a crucial role in semiconductor design.

Over 20% of global chip design engineers are based in India, working for companies like Qualcomm, NVIDIA, and Texas Instruments.

This strong R&D base gives India a natural edge to expand beyond design and into manufacturing.

If India continues to foster innovation through startups and design labs, it can become the brain center of the semiconductor world — powering both domestic and international production.

6. Attracting Global Investments and Partnerships

Foreign investment is vital for scaling India’s semiconductor industry. With a transparent policy environment and growing domestic demand, India is becoming increasingly attractive to global investors.

According to reports, the semiconductor market in India could reach $55 billion by 2026, fueled by sectors like automobiles, telecom, and electronics.

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7. Driving Demand Through Emerging Sectors

India’s demand for semiconductors is set to skyrocket, thanks to the rapid adoption of:

• 5G technology
• Electric vehicles (EVs)
• IoT-enabled smart devices
• Artificial intelligence (AI) and machine learning applications

This domestic demand creates a strong incentive for local chip production, ensuring both supply chain resilience and economic growth.

Conclusion

India’s journey to becoming a semiconductor powerhouse is well underway. With robust government initiatives, a strong talent base, rising domestic demand, and growing foreign partnerships, the country is positioned to play a strategic role in the global semiconductor supply chain.

While challenges like infrastructure, technology transfer, and ecosystem maturity remain, the trajectory is clear — India is on its way to becoming a key player in the global semiconductor industry.

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FAQs

Q1. Why is the semiconductor industry important for India?
Semiconductors power all modern electronics. Developing a domestic industry reduces import dependence and strengthens India’s technological self-reliance.

Q2. What are the government’s initiatives for semiconductors in India?
Schemes like the PLI and DLI, along with the India Semiconductor Mission, aim to attract global players and support local manufacturing.

Q3. Which states are becoming semiconductor hubs in India?
Gujarat, Karnataka, and Tamil Nadu are leading states developing semiconductor manufacturing clusters.

Q4. How can investors benefit from India’s semiconductor growth?
Investors can explore technology-focused mutual funds and sectoral stocks through platforms like JM Financial Services for long-term wealth creation.