India’s got its Chip in the game
- Ishita Nigam
- Jun 16
- 5 min read
Updated: Jun 17

Chips run the world. As the world’s fourth most-traded product after crude oil, refined oil, and cars, their shortage since late 2020 has sent waves of geopolitical and technological distress the world over.
The global semiconductor market is racing towards USD 1 trillion by 2030, growing at 9% annually. Asia Pacific leads the domain, fuelling more than 50% of the global product sales, followed by North America and Europe.
Different nations play varied roles in fulfilling the supply of semiconductor chips. The US leads in electronic design automation (EDA), chip design, core intellectual property, and advanced manufacturing equipment. East Asia is the market leader in wafer fabrication, supported by government incentives and a skilled workforce.
China has been leading in assembly, packaging and testing, which is less labour and capital intensive.
So, where does India stand?
BCG says that over 19% of the world’s semiconductor engineers are in India. The country’s semiconductor market is valued at USD41.2 billion in 2025, expected to reach USD 115.6 billion by 2030, snowballing at 18.8% annually.
The fourth-largest economy in the world is leaving no stone unturned to fuel this growth momentum. Here are some key facts:
Made-in-India chip production: India is ready to launch its first indigenously manufactured semiconductor chip this year. It will be developed by Tata Group’s ₹27,000 crore facility in Assam, which is expected to produce 15 billion chips annually.
Tata has signed deals with global conglomerates Renesas Electronics Corporation and PSMC to set up a semiconductor packaging unit in Sanand and India’s first semiconductor fab facility in Dholera, Gujarat.
Another flagbearer, Kaynes Semicon, is set to launch its first Made-in-India chip in the 28-90 nm range this year, a segment that accounts for 60% of the global demand for chips.
Kaynes Semicon is also developing a ₹3,307 crore OSAT (Outsourced Semiconductor Assembly and Test) facility in Sanand, Gujarat, with a daily production capacity of 6.3 million chips.
Commercial operations of this facility are expected to begin by the end of July. It will be among India's largest and strengthen the country’s position as a self-reliant semiconductor producer and exporter.
Strong R&D: India ranks third in global semiconductor research.
Chip design expertise: India leads the world in auto-component manufacturing. Electronics integration and EV adoption are witnessing extensive expansion and propelling the growth of semiconductor manufacturing in the country.
Kaynes Semicon leads the Original Design Manufacturer (ODM) space with its own IP and digital tech expertise. Dixon Technologies, Syrma SGS Technology, and VVDN Technologies are the other major players in the segment.
Digital Twin Technology Advancements: This tech creates a physical object’s virtual replica, thus allowing real-time monitoring and simulation.
Considered the future of the semiconductor industry, the Digital Twin technology is expected to develop virtual representations for the semiconductor value chain. Firms are integrating this solution to boost their predictive maintenance, real-time monitoring, and operational optimisation.
Indian startups and enterprises, Falcon Labs, Paninian, and Pratiti Technologies, are developing Digital Twin tools for renewable and sustainable solutions, aerospace, and industrial automation.
Emerging hub in Northeast: Northeast India is emerging as a hub for the semiconductor and energy industries, especially with Assam at the helm of affairs.
IIT Guwahati is actively furthering semiconductor research, utilising the government’s Production and Design-Linked Incentive schemes.
Competition: India boasts over 19% of the world's semiconductor design talent, concentrated in Bangalore, Hyderabad, and Pune, positioning it as a strong competitor to China, the global leader in semiconductor manufacturing.
Government Initiatives: The Telecom Department’s Sangam Initiative aims to revolutionise infrastructure planning through Digital Twin solutions. It will utilise unified data and collective intelligence for intelligent infrastructure development.
The South Asian giant is pushing pedals with a single-minded determination to become a global hub. The government’s initiatives – India Semiconductor Mission (ISM) and Semicon India, the annual conference that ISM organises every year – are the twin torchbearers of this goal.
How do these impact the Indian semiconductor players?
Let’s take a look.
India Semiconductor Mission (ISM)
The goal is simple. To establish an unhindered semiconductor manufacturing ecosystem in India.
To do that, the Digital India Corporation created the India Semiconductor Mission in 2021 as an independent division and allocated ₹76,000 crore to support companies in this domain.
ISM offers:
Financial support for companies establishing semiconductor wafer fabrication facilities. The incentives range from 30-50% of the project costs.
Up to 50% financial aid, limited at ₹12,000 crore per fab facility for TFT, LCD, and AMOLED display manufacturing.
The Design Linked Incentive (DLI) Scheme provides up to 50% fiscal aid for chip design projects and net sales turnover-based incentives.
30% capital expenditure support for companies investing in compound semiconductors, sensors, silicon photonics, and semiconductor packaging.
With semiconductor manufacturing still nascent, India focused on assembly, testing, marking and packaging (ATMP) rather than advanced fabrication, which is now set to change.
Geopolitics of the Semiconductor Battleground
The ₹76,000 crore (approximately USD 10 billion) set aside for honing India’s semiconductor prowess is just the beginning compared to the American CHIPS Act, which offers subsidies worth USD 52 billion to polish domestic capabilities.
China, too, has invested over USD 150 billion in the domain since 2014, and Taiwan and South Korea are global leaders with companies like TSMC and Samsung at the helm.
Geopolitical dynamics oil the cogs of the global semiconductor industry. Although Intel and Nvidia may strengthen American design capabilities, the US still relies on TSMC and Samsung for advanced chip manufacturing and India for talent.
Several Indian engineers are employed in American firms’ Global Capability Centres (GCCs). The US CHIPS Act encourages Indo-American partnerships to leverage Indian design and EDA capabilities.
Moreover, due to the ongoing challenges with the US, Europe, and Taiwan, China has its wings wound tight. The proposed amendment to Section 5949 of the National Defense Authorization Act (NDAA) would ban the US government from procuring electronics and devices built with Chinese semiconductors starting December 23rd, 2027.
This offers an unprecedented opportunity for India to shine in the domain. What India currently lacks in fabrication expertise, it makes up for in chip design talent.
The computer and communications devices industry dominates the demand for semiconductor chips worldwide at 57%, followed by automotive and industrial at 17% and 14%, consumer electronics at 11% and government or military usage at 1%.
When it comes to the auto-component manufacturing, India takes the centre stage. The nation’s exports surge by over 25% annually. The EV market alone is growing at 66.52%, expected to reach USD113.99 billion by 2029.
India has its vision set on 2030 - to achieve USD 80 billion in semiconductor exports and secure 10% of the global chip production.
Industry dynamics may be unpredictable, but we can be sure of one thing - by the end of this decade, the world will have a new chip superpower to rely on.
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