India’s Big Bet on Semiconductors
In mid-2025, the government of India cleared a major set of semiconductor projects under the India Semiconductor Mission (ISM). In total, 10 projects have now been approved, with committed investments of roughly ₹1.6 lakh crore (about USD 19–20 billion, depending on exchange rates and phasing) across six states.
These projects span a mix of fabs, compound semiconductor units, and advanced packaging / assembly & test (ATMP / OSAT) facilities.
This is not just bureaucratic window-dressing. The government is signaling it intends to transform India from a net importer of chips and electronic components into a participant — even contender — in the global semiconductor supply chain.
What’s Already Cleared & Where
Here are some of the concrete approvals and moves that illustrate how the plan is taking shape:
• The Union Cabinet, in August 2025, approved four new semiconductor projects with a total outlay of ~ ₹4,600 crore in Odisha, Andhra Pradesh, and Punjab.
• One major announcement: the HCL-Foxconn joint venture in Jewar, Uttar Pradesh, to build a facility for display driver chips (36 million units/month) and wafer processing (~20,000 wafers/month) was approved.
• The Tata Semiconductor Assembly and Test (TSAT) project in Assam (Jagiroad) is another flagship: a large-scale chip assembly & test facility, often cited as one of the keystone projects in the semicon push.
These projects are spread over six states, signaling that the government is trying to ensure geographical diversity and avoid over-concentration in a single region.
Also worth noting: these approvals lean more toward “mature node” fabs and packaging/assembly rather than bleeding-edge cutting-edge nodes (e.g. <5 nm). That reflects a pragmatic approach to start with what is more feasible in the near term.
Why It Matters (If They Pull It Off)
Here are the potential upsides — and challenges — of this semiconductor push.
Potential Upsides
1. Reducing import dependence
India today imports a lot of chips, sensors, display components, and packaging. Building local capacity helps reduce supply chain vulnerabilities.
2. Value-add and multiplier effects
Chip fabs, ATMP, and OSAT facilities stimulate downstream industries: packaging, testing, design houses, materials, chemicals, and more. They also tend to attract high-skill jobs.
3. Strategic technology sovereignty
In sectors like defense, telecom, space, having control (or at least reliable access) to semiconductor supply is a strategic necessity.
4. Global competitiveness and exports
If India ends up producing chips or components that meet global standards, these projects open up export opportunities.
5. Ecosystem strengthening
With fabs and test facilities on the ground, India’s design / IP / EDA / CAD / foundry-adjacent ecosystem gets a stronger foundation.
The Challenges & Risks
This is not going to be easy — so here are caveats:
1. Capital intensity & execution risk
Semiconductor fabs cost billions, require precision environments, supply chain control, yield optimization, etc. Many projects globally never cross the finish line.
2. Technology gaps
The most advanced fabs are in Taiwan, South Korea, US, etc. India’s current approvals tilt toward more mature nodes — making sure you don’t get stuck in low-value segments is a challenge.
3. Supply chain and raw material dependencies
Even if India builds fabs, many upstream materials (e.g. specialty chemicals, photoresists, high-purity gases) and tooling have to be imported initially.
4. Skilled manpower
Fabrication, process control, yield engineers, cleanroom operators — these are high-skill roles. India must ramp up training and talent pipelines.
5. Regulatory, infrastructure, power, water
Chips manufacturing demands ultra-clean infrastructure, stable power, water, logistics, strong IP protection, favorable policies. Any weak link can derail performance.
6. Phased returns & time lag
These projects will take years to build, validate, ramp up — the returns are not immediate.
Why ₹1.6 Lakh Crore Is a Big Deal (and Yet Not Enough)
Yes, ₹1.6 lakh crore is a massive number in Indian context. But relative to the scale of global semiconductor fabrication, it’s still modest.
• The global semiconductor market is projected to cross $1 trillion by 2030.
• Nations like Taiwan, South Korea, and the U.S. have decades of head start, and their fabs cost tens of billions individually.
• The ₹1.6 lakh crore will likely be spread over many years and across multiple projects — meaning individual fabs may receive a fraction of that.
So while the commitment is serious, scaling, sustaining, and proving global competitiveness will be the real test.
Early Signals: Are Things Moving on Ground?
There are signs of movement beyond just approvals:
• The Cabinet’s more recent approvals (Odisha, AP, Punjab) show active momentum, not just paper projects.
• The HCL-Foxconn project in Jewar is expected to begin commercial production by 2027.
• State governments are actively signing MoUs. For example, Odisha recently inked agreements worth ₹2,655 crore in its semicon & electronics push.
• On the institutional front, India’s Semi-Conductor Laboratory (SCL) in Mohali has long served as a domestic R&D/fab node. Modernizing such existing infrastructure can help.
These are incremental but important signals: approval, MoU, ground breaking, and policy alignment.
What To Watch Over the Next 2–5 Years
To judge whether this semicon push is more than rhetoric, here’s what to monitor:
1. Project commissioning & timeline adherence
Are fabs, OSAT, ATMP units being built and becoming operational on schedule?
2. Yield, quality, cost metrics
Do Indian fabs meet global benchmarks for defect rate, throughput, process maturity?
3. Talent pipeline & retention
Are engineering colleges, skilling bodies, and corporate partnerships filling the human capital need?
4. Supply chain localization
Is India reducing dependence on imported materials, tools, and consumables over time?
5. Exports & customer wins
Is Indian chip output being bought globally? Are Indian firms winning customers (in telecom, automotive, IoT, etc.)?
6. Policy stability & incentives
Do the federal and state policies stay consistent over time (subsidies, power tariffs, land, environment) or will they shift with governments?
Final Thoughts
India’s move to green-light ten semiconductor projects with ~₹1.6 lakh crore investment across multiple states is a bold and necessary push. It signals that India wants a seat at the table in the global chip game, not just be a buyer.
But approvals are just the start. The real work lies in execution: building to world-class standards, nurturing human capital, creating a resilient supply chain, and sustaining long-term institutional commitment.
If India can play its cards right, this could be a foundational turning point — a shift from being an electronics consumer to being an electronics innovator and manufacturer.
Would you like me to dig into each of the ten projects (states, scale, timelines) and map their projected value and risk profiles?