What will it take to make India a global semiconductor hub? Experts explain

India’s semiconductor ambitions are moving from announcements to actual production. Five semiconductor units are now in commercial production, while companies such as ASML, Applied Materials and Lam Research are expanding their presence in the country. The next challenge is to build the wider ecosystem needed to compete globally.

Industry experts say the biggest gaps are now shifting from attracting investment to building the capabilities that can turn those investments into globally competitive manufacturing.

The first challenge is specialised talent

India has a large pool of engineers and a strong position in chip design. But semiconductor manufacturing needs a different set of skills.

Process engineering, manufacturing operations, yield management and advanced packaging require specialised training and experience. These capabilities are important because even a large fab cannot operate efficiently without people who understand how to run production and improve yields.

Specialised talent remains the biggest gap as India seeks to turn investment interest under Semicon 2.0 into a competitive manufacturing ecosystem, said Prasad Balakrishnan, CEO of MiPhi Semiconductors.

“Semiconductor manufacturing requires capabilities and skill development that go well beyond chip design, particularly across process engineering, manufacturing, operations and yield management,” he said.

Balakrishnan said India also needs to develop talent alongside the physical infrastructure being built for fabs.

The government said it plans to train 100,000 engineers and technicians for the semiconductor sector. Companies are also setting up training programmes to create a workforce for manufacturing and equipment operations.

Fabs alone will not create a semiconductor industry

The second challenge is the supply chain around the fabs.

A semiconductor factory needs a large network of suppliers for equipment, specialty chemicals, industrial gases, substrates, packaging, testing and other components.

Balakrishnan said these companies need to grow alongside the fabs.

“India also needs stronger domestic capabilities across semiconductor equipment, specialty chemicals, gases, substrates, packaging, testing and the broader components ecosystem,” he said.

He added that smaller companies forming this supply chain may not need the same amount of capital as a fab, but they will require sustained policy and ecosystem support to build scale.

“The fab ecosystem and the components ecosystem have to develop together. One cannot become globally competitive without the other,” Balakrishnan said.

There are signs that this ecosystem is beginning to take shape.

Tata Electronics has signed 16 agreements with suppliers for its semiconductor projects. The company is also developing a 363-acre vendor park at Dholera in Gujarat, which is expected to support around 450 suppliers.

The companies involved include firms working in equipment, materials, gases, logistics and other areas needed for semiconductor production.

India will also have to move up the technology chain

The third challenge is technology. India has built a strong semiconductor design and engineering base, but global chip manufacturing increasingly depends on advanced process technologies and packaging.

“India needs to strengthen semiconductor R&D capabilities and enable IP development and commercialization taking advantage of its strong presence in semiconductor design and talent pool,” said Kathir Thandavarayan, Partner at Deloitte India.

The next step, he said, will be moving from mature technologies towards advanced nodes and advanced packaging.

India will need access to technology as well as deeper cooperation with global semiconductor companies to make that transition.

“The shift to advanced technologies is critical from the perspective of resilience and relevance in future global market,” Thandavarayan said.

That makes research important not only for developing chips in India but also for building intellectual property that Indian companies can commercialise globally.

Global companies are already building the ecosystem

The growing presence of global semiconductor companies provides evidence that India is becoming part of the industry’s wider supply chain.

Applied Materials has committed $5 billion over 10 years in India. The company has also signed an agreement with Karnataka for a Rs 3,600 crore research and development and equipment production facility.

Lam Research has announced a Rs 10,000 crore investment in a silicon component manufacturing facility.

ASML, the Dutch company that makes some of the world’s most advanced semiconductor manufacturing equipment, has also expanded its presence in India.

Allan Wayne, ASML’s Chief Strategic Sourcing and Procurement Officer, said the company expects more semiconductor customers in India as the ecosystem develops.

He said India could eventually produce 15 to 25 per cent of its domestic semiconductor demand through wafer fabrication by 2032. That would require several fabs and a much deeper supplier network.

The scale of these investments also shows why the semiconductor industry cannot be built through fabs alone. Equipment makers, materials companies, logistics providers and other suppliers need to be located close enough to support manufacturing.

Investment announcements will take years to become large-scale production

India has attracted significant investment interest under its second semiconductor programme.

The government approved Semicon 2.0 with an outlay of about ₹1.27 lakh crore. The programme covers semiconductor design, manufacturing equipment and materials, fabs, advanced packaging, research and development and talent development.

The government has said investment proposals worth around $12 billion are likely under the programme.

But experts caution that announcements are only the beginning.

“Semiconductor manufacturing is a long-term journey. Investment announcements, technology transfers and tape-outs will take time to translate into commercially scaled manufacturing,” Balakrishnan said.

He said the next five to 10 years would require sustained policy support, reliable infrastructure, access to technology, specialised talent and a deeper domestic supply chain.

Cost will also matter, but it will not be the only factor.

“Companies will continue to scale when India can offer a competitive and predictable manufacturing ecosystem with strong local capabilities across the value chain alongside sustained founder and investor patience,” he said.

India has crossed the first production milestone

The country has already moved beyond the planning stage for some projects.

Five semiconductor units are now in commercial production, including facilities linked to Micron, Kaynes Technology and CG Power.

At the recent semiconductor conference in New Delhi, Prime Minister Narendra Modi said chips made in Indian plants were already reaching customers in India and overseas.

The government launched its semiconductor push in 2021 and has since supported projects covering fabrication, assembly, testing and packaging.

The next phase is to connect these facilities to a wider industrial ecosystem.

That includes domestic semiconductor design companies. L&T Semiconductor Technologies, IndieSemiC and other Indian companies have announced plans to scale commercial chip production.

Tata Electronics, L&T Semiconductor Technologies, IndieSemiC and Kaynes Technology have also signed an agreement to work on indigenously designed and manufactured chips for global markets.

The government is targeting at least 200 companies and startups designing chips in India under the next phase of its semiconductor programme.

The question is whether India can sustain the push

The numbers show that India has attracted global attention. Semicon India 2026 drew more than 51,000 registrations, around 40,000 visitors and more than 600 exhibitors, including about 300 international companies.

But becoming a global semiconductor hub will depend on what happens after the investment announcements.

India will need to build specialised talent while creating a supplier base around fabs. It will need to strengthen R&D and develop its own semiconductor intellectual property. It will also have to move towards advanced manufacturing and packaging technologies while keeping infrastructure and policy predictable.

Thandavarayan said long-term talent development would need closer cooperation between universities, industry and global technology companies.

“Deeper collaboration between academia, industry, and global technology leaders is required to create industry-ready talent through hands-on research, specialized training programs, and sustained ecosystem partnerships,” he said.