Can India Become the Next Chipmaking Giant?: $10B Dream in Motion
India’s semiconductor dream is no longer just a vision—it’s becoming reality. With billion-dollar projects, global partnerships, and government support, the country is going all-in to build its own silicon backbone.
On May 14, the Union Cabinet gave a green light to a landmark semiconductor facility—a joint venture between India’s HCL and Taiwan’s Foxconn. Set to rise near the upcoming Jewar Airport in Uttar Pradesh, this Rs 3,700 crore plant will focus on display driver chips for smartphones, laptops, vehicles, and more.
With this sixth approved chip unit, India’s semiconductor ambitions are taking concrete shape. But can it truly challenge global chip giants like Taiwan and South Korea?
What Is the India Semiconductor Mission?
Launched in 2021 under the Ministry of Electronics and IT (MeitY), the India Semiconductor Mission (ISM) is the government’s flagship initiative to create a full-stack chip ecosystem—from design and fabrication to testing and packaging.
Backed by a massive Rs 76,000 crore (~$10 billion) outlay, ISM is designed to:
- Reduce India’s heavy chip import dependence (65–70% of components are imported),
- Build domestic capacity,
- Attract global chipmakers to set up operations in India.
- In essence, it’s about making India self-reliant in chips while emerging as a serious global player.
Who’s Powering India’s Chip Revolution?
India’s chip drive has managed to attract big global players. Here’s a snapshot of the major projects:
- Tata Group + Powerchip (Taiwan): Rs 91,526 crore chip fab in Dholera, Gujarat. Expected production: End of 2026.
- Micron Technology (USA): ATMP facility in Sanand, Gujarat—focus on memory packaging and testing.
- Foxconn-HCL JV (New): Rs 3,700 crore plant near Jewar, UP. Target: 36 million chips/month.
- Tata Electronics (Assam): ATMP unit ready by mid-2025.
- CG Power + Renesas + STARS Microelectronics: OSAT unit in Gujarat for outsourced semiconductor assembly and testing.
- Kaynes Technology: OSAT facility approved in Sept 2024, also in Gujarat.
With six major facilities and counting, India’s chip map is expanding rapidly.
Why Is India Betting Big on Semiconductors?
The reason is simple: demand is exploding.
India’s semiconductor market was worth $45 billion in 2023 and is projected to cross $100 billion by 2030, fueled by:
- Growing 5G smartphone usage (India is now the world’s second-largest market),
- Rise of electric vehicles and autonomous tech,
- Increasing digitization in healthcare and defense,
- Boom in consumer electronics and AI-based devices.
But chips aren’t just about tech—they’re also about strategic autonomy. The COVID-19 chip shortage exposed how vulnerable global supply chains can be. Without domestic production, India remains at risk.
Strong Government Backing: The Real Game-Changer
The Indian government is rolling out an entire ecosystem strategy, offering generous subsidies, skill development, and institutional support. Here’s how:
- Semicon India Programme: Central + state subsidies of up to 70% for setting up chip fabs.
- PLI Scheme for Electronics: Helped generate over Rs 5 lakh crore in production since 2020.
- SPECS Scheme: 25% capital subsidy on chip/electronic component investment.
- Chips-to-Startup (C2S): Training 85,000 engineers in chip design across 113 institutions.
- Design-Linked Incentive (DLI): Funding IP creation in chip design by Indian startups.
Already, over 70 startups and 270 institutions are actively innovating in India’s semiconductor space. At Mohali’s revamped SCL, 20 new chip products have been “taped out”—a key milestone in chip design.
Roadblocks Ahead: The Challenges India Must Overcome
India’s semiconductor ambition is bold, but not without hurdles. Here are the biggest ones:
1. High Capital Investment:
Building a chip fab takes $10–$15 billion and several years to break even. It’s a long-term play.
2. Talent Crunch:
India faces a skills shortage of 250,000–300,000 professionals by 2027 in VLSI, chip design, and cleanroom manufacturing.
3. Infrastructure & Supply Chain:
We still lack a robust network of chip-grade raw material suppliers, cleanroom facilities, and EUV lithography tools—the latter being monopolized by Dutch firm ASML.
4. Global Market Domination:
Over 80% of global chips are made in Taiwan and South Korea. India needs scale, speed, and innovation to compete.
Strategic Partnerships: India’s Diplomatic Chip Move
India is playing smart by forming global alliances:
- Member of the Quad’s semiconductor supply chain initiative (with US, Japan, Australia).
- Bilateral deals with Japan and the EU for R&D and ecosystem sharing.
- Plans for a US-India defense chip unit in UP—possibly India’s first foray into military-grade chipmaking.
Experts at the Observer Research Foundation (ORF) and Carnegie Endowment argue India needs a Taiwan-style model—combining policy consistency, talent creation, and a central innovation hub like Taiwan’s ITRI. India is already planning a similar India Semiconductor Research Centre (ISRC).
With the global chip market set to hit $1 trillion by 2030, India wants at least 10% of that pie.
Most read: https://tnheadlines24.com/operation-sindoor-and-brahmos/
Final Thoughts: Can India Win the Chip Race?
India’s semiconductor mission is one of the most ambitious industrial drives in its history. From giant investments and global tie-ups to robust policy frameworks, the country is setting the stage to become a semiconductor powerhouse.
The road is long, and competition is fierce. But with its $10 billion push, strong demand, and strategic diplomacy, India is no longer a bystander—it’s officially in the game.
What’s Next?
India’s chip story is just getting started. Want to track the latest semiconductor projects, global tie-ups, and policy updates? Bookmark us and stay informed.
Explore more on India’s tech transformation. Read our in-depth stories on Make in India, AI missions, and defense tech breakthroughs.
Also read: https://tnheadlines24.com/cochin-shipyard-bags-rs-22500-cr-orders/
Disclaimer: The information presented in this article is based on publicly available sources and official announcements at the time of writing. TN HEADLINES24 is not responsible for any factual inaccuracies, investment decisions, or interpretations arising from this content. Readers are advised to conduct their own research or consult experts before making any conclusions.
