India Launches Major Semiconductor Initiative
India has accelerated its push for semiconductor self-reliance, with Prime Minister Modi inaugurating a joint HCL-Foxconn Outsourced Semiconductor Assembly and Test (OSAT) plant in Uttar Pradesh. The move is part of a broader strategy for chip manufacturing independence, according to the Prime Minister. The initiative is bolstered by India joining the U.S.-led “Pax Silica” supply chain pact, which aims to build talent and reduce dependence on China.
- The government's "India Semiconductor Mission" (ISM) is the driving force behind this initiative, with a substantial financial backing of ₹76,000 crore (approximately $10 billion). This program provides fiscal support of up to 50% of the project cost for setting up semiconductor and display fabrication units. - Tata Group is a major domestic player in this push, with two significant approved projects: a ₹91,000 crore (~$11 billion) semiconductor fab in Dholera, Gujarat, in partnership with Taiwan's Powerchip Semiconductor Manufacturing Corporation (PSMC), and a ₹27,000 crore OSAT facility in Assam. The Dholera fab will focus on 28nm to 110nm technologies for markets including high-performance computing, automotive, and AI. - U.S.-based Micron Technology is also making a significant investment, with a $2.7 billion OSAT facility in Sanand, Gujarat, which is expected to begin commercial production by the end of February 2026. This plant will focus on DRAM and NAND products and is anticipated to eventually produce nearly 14 million units per week. - To build a skilled workforce, India is collaborating with global equipment leaders. Lam Research and the India Semiconductor Mission (ISM) have a partnership to train up to 60,000 engineers over ten years using Lam's Semiverse Solutions virtual fabrication platform. - Applied Materials, another key equipment supplier, is establishing an Innovation Center for Semiconductor Manufacturing in India. The company is actively supplying equipment for major projects like the Tata fab in Dholera and is involved in modernizing the government-owned Semiconductor Laboratory (SCL) in Mohali. - The Production Linked Incentive (PLI) scheme is a cornerstone of India's strategy, offering incentives based on the incremental output of manufactured goods to boost domestic manufacturing and attract large-scale investments in the electronics value chain. - While India is making a significant push, the global semiconductor manufacturing landscape is currently dominated by Taiwan, which accounts for over 60% of global chip output and over 90% of the most advanced chips. The U.S. holds about 12% of the world's manufacturing capacity but leads in chip design. - The initiative aims to make India a more resilient and attractive supply chain partner, particularly for global customers in the automotive, computing, wireless communication, and artificial intelligence sectors. The Indian semiconductor market is projected to grow from approximately $38 billion in 2023 to over $100 billion by 2030.
