India Launching Three New Chip Plants
India's push to become an electronics powerhouse is accelerating, with three new semiconductor plants set to begin commercial operation in 2026. The move aims to reduce the country's import dependency and bolster the domestic supply chain for electronics, SaaS, and IoT product development.
The new facilities are a core component of the India Semiconductor Mission (ISM), a government initiative with a ₹76,000 crore (approximately $9 billion) budget aimed at creating a comprehensive semiconductor and display manufacturing ecosystem. This program provides significant financial support, offering up to 50% of the project cost for approved semiconductor fab establishments. Tata Electronics is behind a major Outsourced Semiconductor Assembly and Test (OSAT) facility in Jagiroad, Assam, with an investment of ₹27,000 crore. This plant will focus on assembling and testing chips for a variety of sectors including automotive, mobile devices, and artificial intelligence, with a projected output of 48 million chips per day. In Gujarat, Sanand is emerging as a key semiconductor hub. CG Power and Industrial Solutions, in a joint venture with Japan's Renesas and Thailand's Stars Microelectronics, is establishing an OSAT facility with an investment of over ₹7,600 crore. This plant will produce both legacy and advanced chip packages for the automotive, industrial, and 5G markets. Also in Sanand, U.S.-based Micron Technology has inaugurated its semiconductor assembly and test facility, representing a combined investment of about $2.75 billion with government partners. This plant has already begun commercial production, converting DRAM and NAND wafers into finished memory and storage products for a global market increasingly driven by AI. These new plants are part of a larger national strategy that has seen 10 semiconductor projects approved across six states, with a total investment of around ₹1.60 lakh crore. The goal is to build capabilities in assembly and testing first, before advancing to more complex full-scale fabrication, thereby reducing India's reliance on imports. The strategic location of the Assam plant is noteworthy, chosen for its access to green power and proximity to existing semiconductor packaging hubs in Southeast Asia. The state government has supplemented central incentives with an additional 40% capex subsidy, making it highly competitive. This investment is already sparking a broader industrial transformation in the region.
