In recent years, India has emerged as a formidable player in the global technology arena, with its burgeoning semiconductor and electronics manufacturing sectors poised to redefine the nation’s industrial landscape.
As the world grapples with supply chain disruptions and an increasing demand for advanced electronics, India’s strategic investments, policy reforms, and skilled workforce position it as a prime destination for semiconductor and electronics manufacturing. This article explores the transformative opportunities in these sectors, highlighting India’s unique advantages and its potential to become a global hub.
The Global Semiconductor Boom and India’s Strategic Entry
Semiconductors, often referred to as the “brains” of modern electronics, power everything from smartphones and laptops to electric vehicles and artificial intelligence systems. The global semiconductor market, valued at over $600 billion in 2024, is projected to surpass $1 trillion by 2030, driven by the rise of 5G, IoT, and autonomous technologies. However, the industry’s heavy reliance on a few countries for manufacturing has exposed vulnerabilities, particularly during recent geopolitical tensions and supply chain crises.
India, with its ambitious “Make in India” initiative, has seized this moment to position itself as a viable alternative. The government’s $10 billion Production-Linked Incentive (PLI) scheme for semiconductors and electronics, launched in 2021 and expanded in subsequent years, has attracted global giants like TSMC, Micron Technology, and Foxconn. These companies are exploring partnerships and setting up fabrication units (fabs) and assembly, testing, marking, and packaging (ATMP) facilities across states like Gujarat, Karnataka, and Tamil Nadu.
Policy Push: Building a Robust Ecosystem
India’s proactive policy framework is a cornerstone of its semiconductor ambitions. The India Semiconductor Mission (ISM), established under the Ministry of Electronics and Information Technology, aims to create a self-reliant ecosystem for chip design, manufacturing, and innovation. Key initiatives include:
- Subsidies and Incentives: The PLI scheme offers up to 50% capital expenditure support for setting up semiconductor fabs and display manufacturing units. Additionally, state governments are providing land, power, and water at subsidized rates to attract investors.
- R&D and Innovation: The government has allocated funds for semiconductor research through institutions like the Indian Institute of Science (IISc) and IITs, fostering indigenous chip design capabilities. The Chips to Startup (C2S) program trains thousands of engineers in semiconductor design, bridging the skill gap.
- Infrastructure Development: Dedicated semiconductor parks, such as the Dholera Special Investment Region in Gujarat, are being developed with state-of-the-art infrastructure to support high-tech manufacturing.
These policies have already borne fruit. In 2024, Micron Technology announced a $2.75 billion investment to establish an ATMP facility in Gujarat, creating thousands of jobs and boosting local supply chains. Similarly, partnerships with companies like Vedanta and Tata Electronics signal India’s growing clout in the sector.
India’s Competitive Edge
India’s rise in semiconductor and electronics manufacturing is underpinned by a unique combination of strengths that make it a compelling destination for global players. With over 1.5 million engineering graduates annually, India boasts one of the largest pools of technical talent globally, and specialized training programs in VLSI (Very Large-Scale Integration) design and embedded systems are equipping young professionals to meet industry demands.
Manufacturing in India is significantly more cost-effective compared to traditional hubs like Taiwan, South Korea, or the United States, with lower labor and operational costs, combined with generous government incentives, enhancing its attractiveness.
Additionally, India’s electronics market, driven by a billion-plus population and rising digital adoption, is expected to reach $300 billion by 2026, ensuring a robust domestic demand for locally manufactured chips and electronics. Furthermore, as global supply chains diversify away from concentrated regions, India’s stable geopolitical stance and strong diplomatic ties position it as a trusted partner for both Western and Asian companies.
Opportunities Across the Value Chain
The semiconductor and electronics manufacturing ecosystem offers opportunities across multiple segments:
- Chip Design: India is already a global leader in semiconductor design, with over 20% of the world’s chip designers based in cities like Bengaluru and Hyderabad. Companies like Intel, Qualcomm, and NVIDIA have established R&D centers in India, leveraging local talent for cutting-edge innovation.
- Manufacturing and Fabrication: While India currently lacks large-scale commercial fabs, upcoming projects by global players and domestic conglomerates like Tata are set to change this. These facilities will cater to industries ranging from automotive to consumer electronics.
- Assembly and Testing: The ATMP segment is witnessing rapid growth, with companies like Foxconn and Wistron expanding their operations in India. These facilities are critical for packaging chips into usable components for devices.
- Supply Chain Integration: India’s focus on developing ancillary industries, such as raw material suppliers and equipment manufacturers, is creating a holistic ecosystem that reduces reliance on imports.
Challenges and the Road Ahead
While the opportunities are vast, India’s semiconductor journey is not without challenges. Establishing a semiconductor fab is capital-intensive, requiring investments of $5-20 billion per facility. Additionally, the industry demands ultra-pure water, stable power, and advanced logistics, which pose infrastructural hurdles. Skilling the workforce to meet global standards and competing with established players like Taiwan and South Korea will require sustained efforts.
However, India’s roadmap is clear. By fostering public-private partnerships, investing in education, and aligning with global trends like green manufacturing and AI-driven automation, India is laying the groundwork for long-term success. The government’s vision to achieve $100 billion in electronics exports by 2030 underscores its commitment to this sector.
India’s foray into semiconductor and electronics manufacturing marks a pivotal moment in its economic evolution. By capitalizing on its talent pool, strategic policies, and growing global relevance, India is not just participating in the semiconductor revolution—it is shaping it. For investors, entrepreneurs, and innovators, the message is clear: India is open for business, and the opportunities in its semiconductor and electronics sectors are boundless.
As the world watches, India’s journey from a tech consumer to a tech creator is well underway, promising a future where “Made in India” chips power the devices of tomorrow.