India’s Semiconductor Supply Chain: From Ambition to Action (2025 Edition)
India’s semiconductor ambitions are no longer just policy papers and press conferences—they’re turning into fabs, funding, and full-stack supply chain moves. As of April 2025, the country is making bold strides to plug into the global chip race, and the momentum is real.
Here’s a deep dive into how India is building its semiconductor supply chain from the ground up—and what’s still missing.
India’s $110B Semiconductor Vision: The Big Picture
India aims to become a $110 billion semiconductor market by 2030, accounting for 10% of global consumption. This vision is anchored by the India Semiconductor Mission (ISM), launched in 2021 to catalyze chip manufacturing, design, and supply chain resilience .
Building the Physical Backbone: Fabs, ATMPs & OSATs
India is investing heavily in semiconductor fabrication and assembly facilities:
- Tata Electronics is constructing a ₹27,000 crore assembly and test facility in Jagiroad, Assam, expected to produce 48 million chips per day by 2025 .
- Kaynes Technology is developing an Outsourced Semiconductor Assembly and Test (OSAT) facility in Sanand, Gujarat, with a daily production capacity of 6.3 million chips .
- L&T Semiconductor Technologies (LTSCT), a fabless startup backed by Larsen & Toubro, plans to build a $10 billion semiconductor fabrication plant in India by 2027, contingent on achieving $1 billion in annual revenue by the 2026-2027 fiscal year .
Supply Chain Localization: From Chemicals to Cleanrooms
India is working to localize critical components of the semiconductor supply chain:
- Chemical and Gas Production: While India has a well-developed chemical and gas manufacturing sector, companies need to enhance their capabilities to produce semiconductor-grade raw materials .
- Equipment Manufacturing: U.S.-based Lam Research plans to invest over $1 billion in India’s Karnataka state to boost the semiconductor ecosystem .
- Assembly Equipment: Tata Electronics has signed a Memorandum of Understanding with ASMPT Singapore to establish semiconductor assembly equipment infrastructure and solutions .
Talent & R&D: The X-Factor
India is focusing on developing a skilled workforce and enhancing research and development:
- Design Workforce: India is home to nearly 20% of the global semiconductor design workforce .
- R&D Investments: NXP Semiconductors has announced an investment exceeding $1 billion in India to bolster its research and development efforts, doubling its current efforts in the country .
- Educational Initiatives: The government is collaborating with industries and universities to create courses tailored to semiconductor manufacturing, assembly, and testing .
Strategic Partnerships: U.S., Japan, and Beyond
India is forging international partnerships to strengthen its semiconductor ecosystem:
- U.S. Collaboration: The U.S. Department of State is partnering with the India Semiconductor Mission to explore opportunities to grow and diversify the global semiconductor ecosystem under the International Technology Security and Innovation Fund, created by the CHIPS Act .
- Defense Applications: The U.S. military has partnered with Indian startups to establish a semiconductor fabrication plant in India to manufacture chips for national security needs .
- Japan-India Partnership: Japan and India have signed a Memorandum of Understanding to strengthen semiconductor supply chains, focusing on research and development, manufacturing, and talent development .
Challenges Ahead: What’s Still Missing?
Despite significant progress, India faces challenges in its semiconductor journey:
- Raw Material Production: Companies need to enhance their capabilities to produce semiconductor-grade raw materials .
- Infrastructure: The semiconductor industry requires reliable power and water supply, areas where India needs to improve to support large-scale manufacturing .
- Global Competition: China’s aggressive expansion in the legacy chip sector poses a threat to India’s semiconductor ambitions .
Final Take: Is India Ready?
India’s semiconductor journey is gaining momentum with significant investments, strategic partnerships, and policy support. While challenges remain, the country’s commitment to building a robust semiconductor ecosystem is evident.
Q&A: What You’re Probably Wondering
Q: Is India really building fabs now?
A: Yes, India is actively constructing semiconductor fabrication and assembly facilities, with projects like Tata Electronics’ facility in Assam and Kaynes Technology’s OSAT facility in Gujarat.
Q: What’s the biggest bottleneck?
A: Producing semiconductor-grade raw materials and ensuring reliable infrastructure are significant challenges India needs to address.
Q: Can India compete with China or Taiwan?
A: While India is making strides, competing with established players like China and Taiwan will require continued investment, policy support, and infrastructure development.
Q: How can I get involved?
A: Opportunities abound in areas like semiconductor design, manufacturing, and research. Engaging with industry initiatives and educational programs can be a good start.