By : Vibha Sharma
Semiconductors—essential components in virtually all modern electronics—have become central to global power struggles. Long reliant on imports for its chip needs, India is now ambitiously repositioning itself as a hub for chip design, manufacturing, and technological innovation. This transition comes at a critical time, as geopolitical rivalries prompt a re- evaluation of technology supply chains. This article explores India’s evolving semiconductor ambitions within the broader international context, assessing both its potential and the obstacles ahead.
India’s Semiconductor Landscape: A Brief History
India has traditionally played a supportive role in the global chip industry, particularly in design and software development. As reported by McKinsey & Company (2023), Indian engineers make up more than 20% of the world’s semiconductor design talent. However, the country has lacked commercial-scale wafer fabrication capabilities—a key element in chip production.
The launch of the India Semiconductor Mission (ISM) in December 2021 marked a turning point. Backed by a $10 billion incentive package, ISM aims to:
- Attract top-tier global chipmakers to set up operations in India.
- Support emerging domestic chip design startups.
- Build long-term infrastructure and develop a skilled semiconductor workforce.
Recent milestones include:
- Micron Technology’s $2.75 billion investment in an Assembly, Testing, Marking, and Packaging (ATMP) plant in Gujarat (Ministry of Electronics & IT, 2023).
- Strategic partnerships with industry giants such as Applied Materials and Lam Research, known for their semiconductor manufacturing equipment.
Geopolitical Dimensions of India’s Semiconductor Push
The race to dominate semiconductor technology is no longer just about business—it’s now a geopolitical priority. Escalating tensions between the U.S. and China, particularly efforts by Washington to restrict China’s access to cutting-edge chips, have disrupted global supply chains.
In this shifting landscape, India is gaining prominence as a trusted alternative for semiconductor development due to:
- Strong diplomatic ties with the U.S., Japan, and other Quad nations.
- A highly educated workforce and a vast consumer base.
- Clear policy frameworks, including the “Make in India” campaign and the Digital India Programme.
According to the Semiconductor Industry Association (SIA, 2024), enhancing supply chain resilience through trusted democratic partners like India is essential to global semiconductor security.
Barriers to Innovation and Expansion
Despite strong momentum, India faces several hurdles in becoming a semiconductor powerhouse:
- Infrastructure Deficits: Fabrication plants require stable power, water supply, and advanced cleanroom environments—areas where India still needs significant improvements.
- Skill Shortages in Manufacturing: While India excels in chip design, it lacks a large pool of experienced professionals in fabrication and hardware manufacturing.
- High Capital Requirements: Setting up fabs involves multibillion-dollar investments and long gestation periods, often dependent on geopolitical and economic stability.
- Rising Global Competition: Other countries, such as Vietnam and Malaysia, are also wooing semiconductor firms with lucrative incentives and faster setup processes.
Nonetheless, India has the opportunity to bypass some challenges by focusing on fabless chip design, advanced packaging, and research-intensive areas like AI, edge computing, and automotive semiconductors.
Pathways to Innovation and Global Leadership
India has the potential to emerge as a global leader in fabless chip development by capitalizing on its strong IT ecosystem and engineering expertise. The Design Linked Incentive (DLI) scheme, introduced alongside the ISM, is specifically designed to support startups in chip design by offering both funding and infrastructure.
Additionally, sectors such as defence, telecommunications, and electric mobility are driving domestic demand for specialized semiconductor solutions—offering an ideal testbed for local innovation.
Key growth areas include:
- AI and edge computing processors
- Semiconductors for 5G and IoT infrastructure
- Secure chips for digital governance and defence applications
Conclusion
India’s semiconductor initiative is not merely an industrial upgrade; it represents a strategic shift towards technological sovereignty in an era of digital geopolitics. Though the path is filled with competitive and logistical challenges, India’s well-articulated policy framework,
growing international credibility, and robust innovation potential form a strong platform for success.
If effectively implemented, India’s chip strategy could transform the nation from a passive importer to a key global player—one that shapes the future of semiconductor supply chains while advancing its national interests in technology and security.
(The writer of the article is Vibha Sharma, an M.A. Political Science student at Kanoria PG Mahila Mahavidyalaya College)