India’s chip economy takes off as semicon investments cross $17.45b
From semiconductor manufacturing and advanced packaging to indigenous chip design, India is building a wider industrial ecosystem to reduce import dependence and capture a market projected to exceed $200 billion by 2035.
- New $13.56 billion programme expands ambitions: Semicon 2.0 will support chip design, fabrication, machinery, materials, packaging, research and talent development, while efforts to attract global investors include Applied Materials’ planned $5 billion investment over the next decade.
- Demand projected to exceed $200 billion by 2035: India’s semiconductor demand is estimated at $45 billion to $50 billion in 2025, rising to around $110 billion by 2030 and more than $200 billion by 2035. The country imported nearly $150 billion in semiconductor products between financial years 2017 and 2025.
- Jobs and domestic expertise are key priorities: India aims to develop another 100,000 semiconductor engineers and train 100,000 technicians, building on a reported target of 85,000 engineers already achieved. The government estimates the growing ecosystem could generate 50,000 to 60,000 direct jobs while creating opportunities for domestic suppliers and manufacturers.
India’s semiconductor industry is moving from policy ambition to commercial production, with new manufacturing facilities, global investment commitments and domestic chip-design initiatives strengthening the country’s position in the global technology supply chain.
At SEMICON India 2026 in New Delhi, US semiconductor equipment major Applied Materials announced plans to invest $5 billion in India over the next decade. Held from September 17 to 19, the event attracted more than 600 companies and representatives from 52 countries, highlighting growing international interest in India’s semiconductor ambitions.
Under the Semicon India Programme, approved with an outlay of $8.09 billion (₹76,000 crore), India is developing capabilities spanning chip design, fabrication, assembly, testing and packaging. By July 2026, 12 semiconductor projects had been approved, representing investments exceeding $17.45 billion (₹1.64 lakh crore).
The projects cover silicon fabrication, silicon carbide fabrication, gallium nitride-based display manufacturing and semiconductor packaging across several states. Three facilities operated by Micron, Kaynes Semicon and CG Semi have entered commercial production. Micron chief executive Sanjay Mehrotra confirmed that commercial production of DRAM and NAND memory was under way at the company’s Sanand facility in Gujarat, marking a significant step towards manufacturing semiconductor products domestically.
India’s next phase, Semicon 2.0, was approved by the Union Cabinet in July 2026 with an outlay of $13.56 billion (₹1,27,500 crore). The programme covers six areas: chip design; semiconductor machinery and materials; fabrication facilities; advanced assembly, testing, marking and packaging (ATMP) and outsourced semiconductor assembly and testing (OSAT); research and development; and talent development. The India Semiconductor Mission will oversee implementation, with supported projects generally running for up to six years and an initial application window of three years.
The broader strategy reflects the need to build more than chip factories. India is seeking to develop domestic suppliers of specialised equipment, advanced chemicals, photoresists and critical materials, while strengthening research, packaging and testing capabilities. Applied Materials’ planned investment will support research, supply-chain expansion and workforce development as demand rises for chips used in artificial intelligence, data centres and advanced digital applications.
Tata Electronics announced multiple collaborations at SEMICON India covering manufacturing, advanced packaging, materials and talent development. Its agreement with Nexperia includes wafer manufacturing, assembly and testing, technology collaboration and innovation. Tata Electronics also announced plans for a vendor park in Dholera, Gujarat, to strengthen the supplier network around its semiconductor fabrication project.
India is also seeking to convert its established semiconductor design expertise into commercial products. Under Semicon 1.0, 24 design projects led by startups and micro, small and medium enterprises have received financial support, while 105 startups and MSMEs have gained access to industry-standard electronic design automation tools. Their applications include satellite communications, drones, artificial intelligence, telecommunications, Internet of Things devices and smart meters.
At the event, the government showcased what it described as India’s first indigenous System-on-Module, developed by IndieSemiC using C-DAC’s Vega-Thejas32 processor and a globally certified LoRa radio-frequency module. The government has also said students from Tier-II and Tier-III cities have designed more than 250 semiconductor chips, indicating a widening base of domestic design talent.
Workforce development remains central to the expansion. Electronics and Information Technology Minister Ashwini Vaishnaw said in August that India had achieved its target of developing 85,000 semiconductor engineers within four years, ahead of the original 10-year timeline. The government aims to develop another 100,000 engineers, while Semicon 2.0 is expected to train 100,000 technicians. Partnerships between industry and educational institutions, including Tata Electronics and Gati Shakti Vishwavidyalaya, are intended to align skills with manufacturing requirements.
The government estimates that the emerging semiconductor ecosystem could generate around 50,000 to 60,000 direct jobs. Beyond employment, the expansion could create business opportunities across materials, equipment, engineering services, logistics and specialised manufacturing as domestic suppliers become more closely integrated into the industry.
The market opportunity is substantial. Government estimates put India’s semiconductor demand at $45 billion to $50 billion in 2025, rising to around $110 billion by 2030 and more than $200 billion by 2035. India imported almost $150 billion worth of semiconductor products between financial years 2017 and 2025, highlighting the scale of domestic demand and the opportunity to expand local production.
The semiconductor push builds on the growth of India’s electronics industry. Electronics production increased from approximately $20.21 billion (₹1.9 lakh crore) in 2014-15 to $127.66 billion (₹12 lakh crore) in 2024-25, while electronics exports rose from $4.04 billion (₹38,000 crore) to around $35.11 billion (₹3.3 lakh crore) over the same period.
Chips are essential to smartphones, computers, automobiles, telecommunications networks, industrial systems and data centres. Expanding domestic production could help India reduce exposure to overseas supply disruptions while creating opportunities for manufacturing, exports and technological innovation. However, sustained progress will depend on competitive production costs, reliable supply chains, technological capabilities and the ability of domestic facilities to serve Indian and international markets.
The theme of SEMICON India 2026, “Silicon to Systems: Building the Ecosystem”, reflects the country’s shift from establishing individual semiconductor capabilities towards connecting design, manufacturing, packaging, research and talent into a commercially viable industry. With domestic demand projected to exceed $200 billion by 2035, India’s chip economy is emerging as a significant pillar of its broader manufacturing ambitions.
