India’s Trillion-Dollar Tech Dream and the Chip Behind It
Semiconductors in india are ingrained in modern economies. They fuel every digital transformation, from smartphones and electric vehicles to defense systems and even solar inverters. India has relied heavily on importing semiconductors in india for decades. Our integrated circuits and wafer chips came from countries in East Asia, particularly Taiwan, South Korea, and China.
In contrast, Prime Minister Narendra Modi has recently started an initiative aimed at turning India into a global semiconductor powerhouse. India now designs, fabricates, and packages semiconductors to meet domestic demand. This growth is driven by Make in India, Atmanirbhar Bharat, and the $10 billion India Semiconductor Mission (ISM).
While the geopolitical environment is favorable and the vision is ambitious, there are still some challenges. Building a domestic semiconductor ecosystem from scratch offers vast innovation potential but demands navigating deep-rooted challenges. This article examines India’s semiconductor industry state and prospects. It covers the roadmap, key roadblocks, and the roles of startups, MSMEs, and industrial entrepreneurs.
Semiconductors: The Crown Jewel of the Industrial Economy
Semiconductors in india sits at the intersection of metalloid elements. For instance, their conductivity is between metals and insulators, such as ceramics. Semiconductors serve as the foundational building blocks of microchips. Furthermore, they dominate the electronics and satellite industry.
In the US, the semiconductor industry is projected to reach $1.1 trillion by 2030. That’s up from $600 billion in 2024. This value is other countries such as Intel competing for the US market. Unfortunately, over 70% of the industry chip fabrication remains monopolized by TSMC in Taiwan, Korea and Samsung.
The Indian economy heavily relies on importing 25 billion USD worth of semiconductors annually. The lack of a manufacturing base led the government to boost investment in semiconductor IP and design. It also spurred the creation of fabless companies, ATMP and OSAT services, and local fabrication plants.
Modi’s Semiconductor Mission: What is Driving the Initiative
India’s chip policy centers around the India Semiconductor Mission (ISM), a $10 billion incentive program. It aims to attract foreign and domestic investments in chip fabrication, display manufacturing, and packaging. The government announced this initiative in 2021. The ISM offers $10 billion in fiscal support to build India’s semiconductor ecosystem. It provides up to 50% capital support for fabs and ATMP units. This is backed by PLI schemes for electronics and chip design. The government is also setting up research programs like ISM-Digital India RISC-V (DIR-V) and building semiconductor parks and industrial zones.
The policy strives to create a fully integrated semiconductor ecosystem in India and is supported by design partnerships with the U.S. and Japan as well as industry leaders Micron, Foxconn, and AMD.
The Current Progress: Where India Stands Today
India’s semiconductor policy has initiated a positive chain of events over the last few years, but the manufacturing base is still in its infancy. One noteworthy development is Micron Technology’s first major chip packaging facility located in Gujarat which is expected to produce chips in 2025. Also, Tata Group is considering ATMP ventures as well as Dholera’s fabrication project.
Dr. Vedanta joined Foxconn to form a venture that announced a $19.5 billion investment draft, but has since been canceled due to low technology partnerships. This shows how difficult the semiconductor world is to operate. Despite this, India’s space and defense demand from ISRO and DRDO creates opportunities for indigenous chips.
Signalchip, Saankhya Labs, and InCore are startups that aim to diversify semiconductor design; however, the use of foreign firms for fabrication demonstrates the need for domestic fabrication options.
Chances for Entrepreneurs and New Businesses
In India’s semiconductor economy, one does not need to invest billions to get a foothold. The industry’s entry point that is most accessible is in Intellectual Property (IP) and chip design. This includes mobile devices, automotive systems, and defense electronics. Firms that focus on the design parts use Electronic Design Automation (EDA) tools and collaborate with overseas foundries (fabs).
There is also an important opportunity in ATMP (Assembly, Testing, Marking, and Packaging). This step follows fabrication, where raw silicon wafers are transformed into usable chips. It is less expensive than silicon wafer fabrication and can be partially localized with a moderate amount of investment.
Furthermore, the wide range of necessary electronics for semiconductor manufacturing presents a strategic opportunity for industrial chemical entrepreneurs. Some of the items include, but are not limited to, high-purity solvents and acids, photoresists, specialty gases like silane and argon, and others.
Opportunities are also present for cleanroom structures, ESD protective gear, wafer-handling tools, and chip-testing software. Startups have the potential to focus on niches such as embedded system integration, wafer recycling, or the recovery of rare earth elements from chip waste.
Related: India’s Silicon Valley for Semiconductor Manufacturing in Karnataka
Semiconductor Manufacturing: A Highly Accurate and Detailed Process
Knowing the value proposition of a semiconductor in india can aid entrepreneurs identify optimal participation points along the manufacturing value chain. The process starts with silicon ingot preparation, whereby high purity silicon is melted, crystallized, and sliced into thin wafers.
These photoresist-coated wafers undergo exposure to ultraviolet light to etch out predefined circuit patterns. Etching them chemically creates the transistors, diodes, and interconnects. Conductivity of certain areas on the wafers is modified by adding boron or phosphorus, a process known as doping.
Multiple circuit layers are built up through material deposition techniques such as CVD and ALD. Each layer’s surface must be flat for optimal adhesion to the next layer, thus requiring chemical mechanical polishing. Advanced integrated circuits containing billions of transistors require this multi-step cycle repeated many times.
Ultimately, the wafers are diced into individual chips. They are sealed using epoxy resins and solder balls after testing for performance. Weeks are spent in ultra-clean environments to complete these steps. Chips are vulnerable to even a single dust particle.
India is focused on the back-end processes like packaging and testing, while fabrication is a long-term objective.
Accelerating Demand and Key Strategic Sectors
India’s semiconductor market is expected to increase between 2024 and 2026 from $25 billion to over $64 billion, and eventually surpass $100 billion by 2030. This is due to the increasing adoption of electronics across various industries. The electric vehicle industry is increasing the need for power electronics, battery management systems, as well as RF and analog semiconductor chips. Consumer electronics such as smartphones, laptops, and wearables continue to be the backbone of growth.
New and emerging areas like defense electronics, smart cities, solar energy systems, and industrial automation are expected to aid significantly. India is expected to gain remotely controlled navigation systems, surveillance, and encrypted communication, which are expected to drive the need for specialized chips.
Some of the most demanding categories includes power semiconductors, microcontrollers, analog integrated circuits, and memory chips. There is also a growing demand for wide-bandgap semiconductors like silicon carbide (SiC) and gallium nitride (GaN), due to their efficiency in high-voltage applications.
Roadblocks and Execution Challenges
Skill Gap and Training Complexities
It can be advantageous for investors and businesses alike to focus on India’s semiconductor in india market. There lies the opportunity for incredible economic growth, but on the other hand, the gap in the skill set in this industry is far wider than it’s supposed to be which puts a damp on its growth. The depth of the industry’s interdisciplinary workforce is vast, including cleanroom operations, wafer etching, and chemical processing, and meeting its training needs is far too complex for most Indian institutions.
Infrastructure Limitations for Fab Setups
Moreover, factories that produce semiconductors in india face challenges related to powering systems. Not only does the structure of semi-conductor fabs need to function, they also require constant access to ultra pure water, advanced air filtration, and streamless power. There are still many industrial parks in India that don’t cater to such niche fields which can answer the infrastructure requirements.
Dependence on Foreign Technology
As of now, the Indian economy is lacking extensively in advanced lithography or EDA software which puts the country at a massive dependency on international suppliers. Even with subsidies, only a small handful of corporations have access to the required funds to open state of the art semiconductor fabs.
How NPCS Can Enable Entry into the Semiconductor Value Chain
For businesses and founders that want to become a part of the semiconductor value chain, NPCS can be immensely helpful by allowing start-ups to bypass the need for a fab. With NPCS, you do not need to worry about operational readiness partner or reliable tech partnerships.
NPCS creates surveys and detailed techno economic feasibility reports to help entrepreneurs assess industry viability. The surveys also cover the entire manufacturework cycle from getting the raw materials, the layout of the plant, as well as the financial projections tailored for India. NPCS offers pathways from ideation to execution for cleanroom systems, specialty gases, packaging materials and chip-testing equipment.
Conclusion: A Chip Dream with Real Possibility—If Executed Right
The semiconductors in india journey is very strategic and the economic shift is fairly necessary for India. Investing in technology serves a much larger purpose as a global supply chain, and this vision of a self reliant hub is a possibility in the years to come but that progress is ongoing.
There are many services available MSMEs and start-ups can provide to participate in such an ecosystem including ATMP services, high purity materials, chip design and cleanroom support. The semiconductor and all non silicon related components should shift the industrial focus towards building and innovating for a leading future of the country.
With effective policies and strategies, the driving engine for the chip revolution of India could go from a simple run to a thunderous roar.
