India’s Semiconductor Journey

India’s semiconductor story has moved from policy planning to the establishment of manufacturing facilities. The effort began with a focus on creating a domestic semiconductor and display ecosystem and has since expanded to cover chip design, fabrication, packaging and testing, equipment, materials, research and talent. The larger objective is to develop capabilities across the semiconductor value chain and strengthen India’s participation in the global industry.

This expansion comes at a time when semiconductors are central to a wide range of technologies. Smartphones, telecommunications equipment, automobiles, medical devices, satellites, artificial intelligence systems and data centres all depend on semiconductor components. The growing use of digital technologies, along with the need for more resilient supply chains, has made semiconductor capability an important part of India’s technology and manufacturing priorities.

Building the Foundation

A major step came in December 2021, when the Government of India approved the Semicon India Programme with an outlay of ₹76,000 crore to establish a sustainable semiconductor and display manufacturing ecosystem in the country. The programme provides support for semiconductor fabs, display fabs, compound semiconductor and related technologies, semiconductor packaging and testing, and semiconductor design.

The India Semiconductor Mission (ISM) serves as the institutional framework for implementing the semiconductor and display programmes. It works with government departments, industry, academia and other stakeholders to support the development of the ecosystem.

The first phase was aimed at creating the basic manufacturing and design capabilities needed for the industry. As the programme has progressed, the focus has increasingly shifted towards building the supporting ecosystem around these facilities.

From Projects to Production

The semiconductor industry requires large investments and specialised infrastructure. While fabrication is an important part of the value chain, assembly, testing and packaging are equally necessary for converting manufactured wafers into usable semiconductor products.

Under Semicon India 1.0, 12 semiconductor manufacturing projects had been approved across six states by July 2026, involving investment commitments of more than ₹1.64 lakh crore. The approved projects include a silicon fabrication facility, a silicon carbide facility, an integrated Gallium Nitride Micro LED display fabrication facility and nine semiconductor packaging units.

The programme has also begun to move into the production stage. Micron, Kaynes and CG Semi have commenced commercial production, marking a transition from project approvals to semiconductor manufacturing in India.

The approved facilities are expected to serve requirements in sectors including consumer electronics, industrial electronics, automobiles, power electronics, telecommunications and aerospace.

Beyond the Fab

A semiconductor does not move directly from a fabrication plant into a finished electronic product. The industry involves several stages, beginning with design and wafer fabrication and extending to assembly, testing and packaging. It also depends on specialised equipment, materials, chemicals and other inputs.

ATMP (Assembly, Testing, Marking and Packaging) and OSAT (Outsourced Semiconductor Assembly and Test) facilities are therefore an important part of the ecosystem. Packaging has also become a significant technology area as chip designs become more complex and different components are increasingly integrated into smaller packages.

Building capabilities across these stages can help India develop a broader semiconductor value chain rather than concentrating on fabrication alone. Semicon India 2.0 also places specific emphasis on equipment and materials, reflecting the importance of these supporting capabilities.

Strengthening Semiconductor Design

Manufacturing is only one part of India’s semiconductor opportunity. India already has a substantial semiconductor design workforce, and government programmes are aimed at strengthening this capability further.

The Design Linked Incentive (DLI) Scheme provides financial incentives and design infrastructure support for the development and deployment of semiconductor designs, including integrated circuits, chipsets, Systems-on-Chip (SoCs) and semiconductor-related intellectual property.

As of 2026, 24 semiconductor design projects had been approved for financial support, while 105 startups and MSMEs had received support for access to Electronic Design Automation (EDA) tools. These initiatives are helping startups and smaller companies work on chip designs for applications ranging from telecommunications and artificial intelligence to automotive, healthcare and satellite communication.

The design ecosystem is important because semiconductor capability is not limited to producing chips. Designing processors, controllers, sensors and other specialised devices allows companies to develop intellectual property for specific applications and markets.

Building the Semiconductor Workforce

The expansion of manufacturing and design has created a parallel requirement for specialised talent. Semiconductor facilities need engineers and technicians with knowledge of chip design, fabrication processes, equipment, packaging, testing and related areas.

The Chips to Startup (C2S) Programme is one of the initiatives supporting this requirement. EDA tools have been made available to academic institutions, allowing students and researchers to gain practical exposure to semiconductor design.

Recent government data indicates that more than 68,000 students have been trained through the programme, with EDA tools deployed across around 320 academic institutions. The programme has also supported the development and fabrication of chip designs by participating institutions.

Such initiatives are important for building a talent pipeline alongside physical semiconductor infrastructure. The industry requires people with specialised knowledge at different stages of the value chain, from circuit design and verification to manufacturing and testing.

Semicon India 2.0: Widening the Scope

The next phase of the programme takes this ecosystem approach further. The Union Cabinet approved Semicon India Programme 2.0 on 15 July 2026 with an outlay of ₹1,27,500 crore.

The programme is structured around six areas:

• - Chip design
• - Semiconductor equipment and materials
• - Fabrication facilities
• - Advanced packaging
• - Research and development
• - Talent development

The expanded programme reflects the changing requirements of the semiconductor industry. While the first phase helped establish manufacturing and design capabilities, the next phase places greater emphasis on the technologies and capabilities that support a complete ecosystem. Research into advanced semiconductor technologies, development of domestic intellectual property, specialised equipment and materials, and workforce development are all part of this broader approach.

From Silicon to Systems

The changing scope of India’s semiconductor ambitions was reflected in SEMICON India 2026, held from 17–19 September 2026 at Yashobhoomi, New Delhi. Jointly organised by the India Semiconductor Mission and SEMI, the event carried the theme “Silicon to Systems: Building the Ecosystem.”

The theme points to an important aspect of semiconductor development. Chips are ultimately part of larger electronic systems, and their value depends on how effectively they are designed, integrated and used in products and technologies.

The 2026 edition brought together stakeholders from across the semiconductor ecosystem and included a startup pavilion, workforce development activities, country and state pavilions, a deep-tech hackathon and parallel programmes covering areas such as advanced electronics manufacturing, components and materials, displays and future workforce development.

The event also highlighted the growing connection between semiconductor technology and areas such as artificial intelligence, supply chains, sustainability, electronics manufacturing and advanced systems.

Why the Semiconductor Ecosystem Matters

The importance of semiconductors extends well beyond the semiconductor industry itself. Chips are used in automobiles, telecommunications equipment, medical devices, aerospace systems, power electronics, consumer electronics and industrial machinery. A stronger domestic ecosystem can therefore support the growth of several downstream industries.

The growth of artificial intelligence and high-performance computing is creating demand for increasingly specialised processors. Electric mobility and renewable-energy systems are also creating demand for power semiconductors and other electronic components.

This makes the development of semiconductor capabilities relevant to India’s wider electronics and technology ambitions. A domestic ecosystem can bring together chip designers, manufacturers, packaging companies, equipment and materials suppliers, research institutions and end-user industries.

Looking Ahead

Building a semiconductor ecosystem is a long-term process. Fabrication facilities require substantial investment, specialised infrastructure and technical expertise. At the same time, the supporting network of designers, researchers, equipment and materials suppliers, packaging companies and skilled professionals needs to develop alongside manufacturing.

India’s semiconductor programme is consequently moving from establishing the initial manufacturing base towards building a more complete ecosystem. Semicon India 1.0 created the foundation through financial support and project approvals, while Semicon India 2.0 broadens the focus to design, equipment and materials, fabs, advanced packaging, research and development, and talent.

The progress so far represents an important stage in India’s semiconductor journey. The next phase will depend on sustained research, technology development, skilled manpower, industry participation and the ability to connect different parts of the value chain.

The idea of “Silicon to Systems” captures this wider direction. India’s semiconductor effort is no longer limited to establishing manufacturing facilities. It is about developing the design capabilities, research base, infrastructure, talent and industrial linkages needed to turn semiconductor technologies into products and systems for a growing range of applications.