The global semiconductor industry is at the heart of technological advancements, powering everything from smartphones and laptops to AI and electric vehicles. India, traditionally dependent on chip imports, is now making bold moves to become a key player in semiconductor manufacturing.
With multi-billion-dollar investments, strategic government initiatives, and partnerships with global giants, India is rapidly building its semiconductor ecosystem. The country aims to reduce reliance on China, strengthen its supply chain, and position itself as a global manufacturing hub.
But can India compete with established semiconductor powerhouses like China, Taiwan, and the USA? How are companies like Tata, Micron, and NXP shaping the industry? And what challenges must India overcome to realize its $110 billion semiconductor dream by 2030?
India’s current progress, upcoming projects, market potential, and a global comparison to understand its role in the future of semiconductor manufacturing.
1. Current Developments in India’s Semiconductor Sector
Government Initiatives Driving Growth
The Indian government has taken proactive steps to boost the semiconductor industry:
- India Semiconductor Mission (ISM) – Launched to create a sustainable semiconductor and display ecosystem, offering financial incentives to global and domestic manufacturers.
- Production Linked Incentive (PLI) Scheme – Allocated ₹76,000 crore ($9.1 billion) to attract semiconductor manufacturers and promote domestic chip production.
- Design Linked Incentive (DLI) Scheme – Encourages semiconductor design startups by offering financial and infrastructure support.
- IndiaAI Initiative – $1.2 billion investment to develop AI infrastructure, secure GPUs, and support local AI startups. (Source)
Key Investments and Industry Players
Several global and Indian companies are investing in India’s semiconductor ecosystem:
- NXP Semiconductors – Plans to invest over $1 billion to double its R&D operations in India over the next few years. (Source)
- Tata Electronics – $3.6 billion investment in Assam to build India’s first large-scale semiconductor assembly and testing facility. Operations to start by mid-2025.
- Micron Technology – $2.75 billion investment in Gujarat to build a semiconductor plant, expected to strengthen India’s chip production.
2. Major Semiconductor Projects in India
Several ambitious semiconductor projects are in progress:
- Bharat Semiconductor Manufacturing Corporation (BSMC) – A joint venture with the U.S. Space Force to build India’s first advanced semiconductor fabrication plant in Kolkata. Expected to begin phase one production by 2027.
- Foxconn-HCLTech Joint Venture – $37.2 million investment in an Outsourced Semiconductor Assembly and Testing (OSAT) plant in India. Operations expected to commence soon.
- Vedanta-Foxconn Semiconductor Plant – Plans for a chip fabrication unit in Gujarat are in discussion, with Vedanta aiming to enter India’s semiconductor space.
3. Future Prospects and Market Projections
India’s semiconductor industry is poised for rapid expansion, fueled by rising demand and government incentives.
Market Growth Projections
- India’s semiconductor market was valued at $52 billion in 2024 and is projected to grow to $110 billion by 2030. (Source)
- Growth drivers: Automotive, telecom, consumer electronics, defense, and AI-driven industries.
Challenges and Roadblocks
Despite promising developments, India’s semiconductor industry faces hurdles:
- Lack of existing fabrication plants – India does not yet have a commercial chip fabrication unit and still relies on imports.
- Talent shortage – There is a need for skilled semiconductor engineers and design professionals.
- High initial investment costs – Setting up semiconductor fabs requires billions of dollars in investment, advanced technology, and strong supply chains.
4. How India Compares to China and the USA in Semiconductor Manufacturing
China – The Global Leader Facing Challenges
- China’s semiconductor market is valued at $180 billion (2023) and accounts for over 30% of global semiconductor production.
- However, U.S. trade restrictions and geopolitical issues have affected China’s chip supply.
- Major Chinese firms like SMIC and Huawei are focusing on indigenous chip production to counter Western sanctions.
USA – Investing in Domestic Semiconductor Manufacturing
- The U.S. CHIPS and Science Act is a $52 billion initiative to support semiconductor manufacturing in the USA.
- Companies like Intel, TSMC, and Samsung are expanding their U.S. chip plants to reduce dependence on China.
- The U.S. is partnering with India for semiconductor R&D and manufacturing.
India’s Strategic Position
- India is not yet a global semiconductor leader, but it is rapidly building its semiconductor ecosystem.
- With strong government policies, major investments, and a growing electronics market, India can become a semiconductor hub by 2030.
- India is working with U.S. and Taiwanese companies to develop semiconductor fabs and reduce dependence on China.
5. Conclusion – Can India Become a Global Semiconductor Hub?
India is taking decisive steps to become a major semiconductor player, backed by strong government policies, foreign investments, and emerging local companies.
Key Points:
- $10 billion+ in government incentives to support semiconductor manufacturing.
- Large investments from Tata, Micron, and NXP Semiconductors.
- Strategic partnerships with the U.S., Taiwan, and European chip firms.
- Projected semiconductor market size of $110 billion by 2030.
While challenges remain, India’s semiconductor industry is on track to play a crucial role in the global supply chain.
With the right investments and policy support, India could become a leading semiconductor hub by the next decade.
Sources & References
India’s semiconductor revolution has begun. The next few years will determine if it can compete with global giants like China and the U.S. and become a self-reliant chip manufacturing powerhouse.
