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India plans to build a $110 billion semiconductor industry by 2030.
The India Semiconductor Mission and HCL projects drive local chip manufacturing.
Growing digital technologies are fueling rapid semiconductor demand across sectors.
India is on a mission to become a major force in the global semiconductor industry. The country currently depends heavily on importing chips, spending about $24 billion each year. But with rising demand and a clear national vision, India now plans to build a $110 billion semiconductor industry by 2030. This journey is backed by strong policy support, global partnerships, and large-scale investments.
At present, India imports nearly all its semiconductors from countries like Taiwan, China, South Korea, Vietnam, and the United States. These chips power everything from smartphones and laptops to cars, defense systems, and medical equipment. With digital technologies growing fast, the demand for chips in India is expected to rise to $64 billion by 2026 and reach $110 billion by 2030. The government now sees chip manufacturing as a critical area for national security and economic strength.
To change its position from a buyer to a manufacturer, India launched the India Semiconductor Mission in 2022. The mission includes $10 billion in government incentives to support chipmaking, packaging, research, and design. These funds are helping to attract major companies from around the world.
Six semiconductor projects have begun. One major project is a joint chip plant by HCL and Foxconn near Jewar in Uttar Pradesh. This facility plans to produce 36 million display driver chips every month and will create around 2,000 direct jobs. In another big move, Lam Research, a U.S.-based company that supplies tools for chip manufacturing, invested more than $1 billion in a plant in Karnataka.
Research and development are also getting attention. The Semi-Conductor Laboratory in Mohali is being modernized with $2 billion in support. The government has also set up the Bharat Semiconductor Research Centre at IIT Madras to build future design and research capabilities.
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India is expected to produce its first fully made semiconductor chip by the end of 2025. The chip will use technology between 28 and 90 nanometers, which will mark a major shift from India’s earlier position of importing all its chips. A pilot facility is already active and will begin commercial production by mid-2026.
Tata Group is also contributing by setting up an assembly and testing unit in Assam. The first phase of this plant is scheduled to be ready by mid-2025. Meanwhile, L&T Semiconductor Technologies is preparing to launch its first chip by the end of 2025 and build a $10 billion fabrication unit by 2027. The government has agreed to support up to 90% of the construction cost.
India is working with countries like the United States, Japan, and members of the European Union to improve its semiconductor capabilities. Under a joint program with the U.S., called iCET, India is gaining access to advanced technologies, including those needed for chips used in power electronics and defense.
Japan has also shown strong interest in supporting India’s semiconductor efforts. Through the Rapidus project, India will receive support in chip development and access to Japanese markets. These partnerships bring technical knowledge, equipment, and global supply chain access to Indian companies.
L&T and other startups are also gaining from these ties. They are receiving financial support and training to build in-house design teams and R&D labs, which will play a key role in developing unique chip designs for global and domestic needs.
India’s semiconductor demand is already valued between $45 billion and $50 billion in 2025. This is expected to grow rapidly to $63 billion in 2026, driven by the growing use of smartphones, telecom equipment, electric vehicles, artificial intelligence, defense systems, and smart devices. By 2030, the market is expected to reach $110 billion, making India one of the largest consumers of semiconductors globally.
This demand is growing at an annual rate of about 10%. To meet it, India needs to set up more fabrication units, packaging facilities, and design centers. These will help India not just meet domestic needs but also supply chips to the global market.
Despite the strong momentum, India still faces major challenges. Building chip plants requires massive investment, time, and expertise. Previous plans like the Vedanta-Foxconn project and Adani’s discussions with Tower Semiconductor had to be paused because of issues like unclear demand forecasts and lack of experience.
India also needs to keep its manufacturing costs low to compete with established hubs like Taiwan and China. At the same time, there is a shortage of highly skilled professionals who can work in fabs or design chips. Other important areas like water supply, electricity, logistics, and environmental clearances also need serious improvement to support large chip plants.
The Indian government has taken several steps to reduce investment risks. It introduced Production-Linked Incentive (PLI) schemes across electronics, IT hardware, and semiconductors to encourage local manufacturing. These schemes offer financial support to companies that meet certain production targets.
The government also made it easier for foreign companies to invest in the sector. States like Uttar Pradesh have received investment proposals worth Rs. 40,000 crore under these policies. Special zones with ready infrastructure, such as Electronics Manufacturing Clusters and Software Parks, are helping create a supportive environment for chipmaking.
Workforce training is another priority. The government is working with industry associations and top academic institutions to set up training centers. These programs aim to produce a new generation of engineers and technicians who can support semiconductor design and production.
New semiconductor investments are expected to create thousands of jobs and boost local economies. For example, the new plant in Assam could create over 25,000 direct and indirect jobs. Similarly, Uttar Pradesh is developing into a major tech manufacturing hub with its chip plant near the new international airport at Jewar. Karnataka is also benefiting from major investments.
These projects will help shift job creation from traditional areas like IT services to high-tech manufacturing. The goal is to bring economic development to multiple regions instead of keeping it limited to metro cities.
India’s roadmap includes short, medium, and long-term goals. In the short term, the country plans to produce its first commercial chips by late 2025. In the medium term, it aims to have fully functional fabs like the one L&T plans to launch by 2027. By 2030, India hopes to meet 10% of global semiconductor demand through domestic production.
The country is focusing on producing a wide range of chips, from basic display drivers to advanced chips used in AI, robotics, and defense. To succeed, India must continue its efforts in forming global partnerships, developing local talent, and ensuring strong policy support.
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India’s $110 billion semiconductor dream is bold and ambitious. It reflects the country’s desire to reduce import dependence and gain a strong position in the global tech industry. The foundation is already being built through pilot projects, global collaborations, and smart policies. While challenges remain, India has shown that it is serious about becoming a major chip making nation. With the right mix of vision, investment, and execution, India might just turn into a global semiconductor powerhouse by the end of this decade.
