Real game begins now…

At a time when the pitched battle for control was intensifying at Tata House last month, one of the group companies was pursuing an equally aggressive strategy on a different front. At the Ministry of Electronics and Information Technology’s (MeitY) flagship event, Semicon India 2026 (5th edition), held at Delhi’s Yashobhoomi from 17-19 September, Tata Electronics, the business conglomerate’s leading entity for electronics and semiconductor businesses, announced several new MoUs and collaboration deals with leading global players. The announcements underlined its intention to consolidate its first-mover advantage as India’s semiconductor ecosystem takes shape.

But Tata Electronics was clearly not alone in announcing big-ticket plans. There were numerous announcements during those 3 days from leading global and domestic players, signalling deeper engagement with the emerging semiconductor ecosystem being supported by the government. The biggest edition to date, according to industry stakeholders who have participated since the beginning, generated a level of excitement that was markedly different this time. With the world looking for new global hubs for chip production, the Indian government’s message that the show was moving beyond the initial presentation stage and into execution appeared to find a more receptive audience.

“In the semiconductor industry, there is a word – ‘tape-out’. This is the day when a chip, after design completion, goes into production. But work does not stop after tape-out. On that very day, work begins on the next version. And India is doing the same. India has started the second phase of the Semiconductor Mission. The size of our first phase was about $8 billion, while the second phase has been set at $13.5 billion. Moving on the Reform Express, we have made further reforms in this sector,” Prime Minister Modi said in his inaugural speech, emphasising the opportunity that India offers international companies to collaborate with start-ups, Indian design companies and OCI-owned companies.

Serious intent

The show was indeed grand in scale, comprising 600 companies from 52 countries. Six countries – Japan, South Korea, Malaysia, the Netherlands, Singapore and Sweden – had dedicated pavilions, alongside a Startup Pavilion. Union Minister for Electronics and Information Technology Ashwini Vaishnaw later highlighted the scale of investment being contemplated. “The investment numbers that we are seeing today are of the order of R1 lakh crore, or about $11-12 billion. Many of them don’t want us to take their names, but they will make those investment announcements after approvals from their board and shareholders,” he said.

Government officials also outlined six broad pillars that will define the implementation of Semicon 2.0: the design ecosystem, machines and materials, fabs, advanced packaging, research & development, and talent development. The design ecosystem focus entails scaling India’s semiconductor design ecosystem by supporting both start-ups and large companies. The second pillar aims to strengthen India’s ecosystem for semiconductor manufacturing equipment, machines and materials, and, in its more advanced form, to support precision manufacturing. The third pillar will aim to expand semiconductor fabrication capabilities across different technologies, including display, memory, silicon, compound and logic fabs.

Alongside advanced packaging, the government is also looking to give a major boost to research & development involving industry, government and academia. Under this approach, industry will be encouraged to propose R&D projects, with funding from industry and government and the involvement of academic institutions. This will extend to talent development, with leading technical institutes offering formal courses to ensure a pipeline of talent for the future. Some of these measures were introduced on a limited basis under the previous Semicon policy, which established the foundation for India’s semiconductor ambitions. They are now set to be scaled up significantly.

Semicon Policy 1 is credited with establishing a functional base for India’s semiconductor industry. A performance sheet released by the government while announcing Semicon 2 stated that, under the initial policy, the country had approved 12 manufacturing units with a cumulative investment of over Rs1.64 lakh crore. These comprised three fabs and nine packaging units expected to cater to chip requirements in sectors such as consumer appliances, industrial electronics, automobiles, power electronics, telecommunications and aerospace.

On the design side, 24 semiconductor design projects from start-ups and MSMEs have been approved for financial support. Of the 12 approved manufacturing units, three have started pilot production.

The new policy, as explained to stakeholders at Semicon India 2026, is intended to accelerate that progress, and the industry appears to be responding with growing interest.

“At Semicon India 2026, the government highlighted the fact that the country has moved from project announcements and construction towards actual chip production, with multiple projects already in commercial production. Semicon 2.0 reflected a clear and sustained commitment to building a semiconductor ecosystem in India. What is particularly encouraging is that the conversation is now moving beyond policy announcements towards execution and commercial production,” says Hitesh Garg, VP and Country Manager, NXP Semiconductors.

“India’s semiconductor journey is accelerating from ambition to execution, with policy support and investments creating a globally competitive ecosystem,” adds Ashok Kumar C, Leader, Critical Power, Electrification Business, ABB India.

Collaborative positioning

Following the announcement of the Semicon 2.0 policy, this was the first big-stage direct interaction that the government had with leading domestic and global players (a visitor would have easily noticed the presence of visitors, especially from Japan, Korea, Taiwan, Vietnam and some other south-east Asian countries). Senior stakeholders from the global arena, while endorsing the government’s recent moves, emphasised the point that taking the momentum to the next level is imperative. According to Ajit Manocha, President & CEO of leading global association SEMI, the global semiconductor market is slated to reach $3 trillion by 2035 and there is a serious opportunity for India to make a mark, with chip production turning into a very profitable business with tremendous demand growth. “The semiconductor industry is now number three in ranking in terms of profitability of all the industries. The reason for bringing this up is very important. We have all now learned the hard way during Covid that semiconductors are very important for our lives,” he remarked.

Other leading players endorsed the India opportunity theory in the semiconductor business, and those who have positioned themselves in the front row apprised the world of where their operations are heading in the next phase. Sanjay Mehrotra, CEO, Micron Technology, maintained that commercial DRAM and NAND production is live at Sanand, Gujarat. Dr Randhir Thakur, CEO & MD, Tata Electronics, confirmed that the construction of the Dholera 300mm fab and Jagiroad OSAT facility is on track and that, through new collaborations, the company is deepening its capability in semiconductor wafer manufacturing, assembly and test, and is also building advanced semiconductor packaging capabilities. Toshiki Kawai, CEO, Tokyo Electron, committed support for India’s upcoming wafer fabs and advanced packaging facilities and announced a semiconductor training centre in Gujarat. SPG, Applied Materials, announced ‘India Vision 2035’: a $5 billion investment over the next decade; Wayne Allan, EVP, ASML, reiterated its partnership with Tata Electronics for lithography solutions at the Dholera fab and said ASML is considering the possibility of integrating Indian suppliers into its global supply chain.

Nasdaq-listed Lam Research Corp, the US-headquartered leading global supplier of semiconductor manufacturing equipment and services, announced an investment of over a billion dollars in setting up its first silicon component manufacturing facility in the country and augmenting its advanced research and development operations. The company has been present in India for nearly 25 years and operates one of the country’s most advanced chip research and development (R&D) laboratories. The new manufacturing facility is slated to support a vertically integrated process spanning silicon ingot production and processing for advanced semiconductor technologies and leading-edge nodes.

“India represents an important part of Lam’s global innovation and growth strategy,” said Rangesh Raghavan, corporate vice-president and managing director, Lam Research India. “Our continuing expansion in India reflects our confidence in the country’s talent, growing semiconductor ecosystem and supportive policy environment. We remain committed to collaborating with the government, academia, suppliers, start-ups and other stakeholders to help accelerate semiconductor innovation that benefits the industry globally.”

Some of the other notable deals (including collaborations) announced on the sidelines include: Tata Electronics and Nexperia BV entered an MoU covering semiconductor wafer manufacturing, assembly and test; Tata Electronics and JSR Corporation signed an MoU for the supply of photoresists and advanced chemicals for Tata Electronics’ fab in Dholera; Kaynes Semicon and OptoML India signed an MoU to jointly develop advanced semiconductor packaging; India Semiconductor Mission and Intel India announced the launch of an ‘Introduction to Semiconductors’ course; and six ChipIN Regional Centres were announced to expand access to chip-design capabilities.

One of the most remarkable factors was the presence of as many as a dozen states at the event (the most in any edition so far). Some of the front-ranking ones that have made moves since Semicon 1 became a reality were seen hard-selling to potential investors their ability to attract companies to the emerging semiconductor ecosystem. “We have a dedicated semiconductor policy which was initiated about one and a half years ago. We have created a small zone near Tirupati which is close to both Chennai and Bangalore. It will be a research-cum-product facility where advanced packaging, R&D, training and a proper supply-chain regime will be created. It will be pursued in two phases and we are expecting a total investment of Rs50,000 crore to Rs80,000 crore. We are expecting a good number of applications and some companies have also shown willingness to set up base in our semiconductor zone,” Bhaskar Katamneni, Secretary to the Government of Andhra Pradesh for the Information Technology, Electronics and Communications (ITE&C) Department, told Business India. Some of the first-timers from the states also informally admitted that they were trying to assess the possibilities in their respective regions as the buzz around the sector has grown stronger.

The road ahead

The overwhelming presence of suppliers to the semiconductor ecosystem was clearly visible at the event, signalling how the industry could take shape in the years ahead. “Semiconductor manufacturing demands exceptional power quality, reliability and operational continuity – making these considerations integral to facility design from the outset. We bring global semiconductor expertise and locally scalable solutions to address this challenge,” says Ashok Kumar of ABB India. A company like Lohum, which is looking to play a critical role in India’s quest for rare earth materials, is seeking integration with the semiconductor ecosystem in the near to medium term. “Materials supply to mainline semiconductor companies will be a huge opportunity and we are working to develop this vertical along with our core business,” maintains Rajat Verma, Founder and CEO of the company.

During Semicon last month, LOHUM and Brewer Science jointly submitted a white paper to Ashwini Vaishnaw, outlining key policy interventions required to strengthen India’s semiconductor materials and chemicals ecosystem. The paper examines critical supply-chain gaps across semiconductor manufacturing and proposes measures around domestic production, qualification, standards, feedstock security, infrastructure and industry adoption. According to the paper, India’s semiconductor demand is projected to grow at a compound annual growth rate (CAGR) of 19 per cent, to around Rs8,59,059 crore by FY30 and over Rs19,09,020 crore by FY35. However, between 90 per cent and 95 per cent of current consumption is met through imports, which grew at a CAGR of 23 per cent from Rs38,231 crore in FY17 to Rs2,56,265 crore in FY25. India has no domestic photoresist production and no qualified merchant wafer supplier.

“Photoresists, noble gases and 300mm silicon wafers carry the highest concentration risk, and materials have repeatedly been used as instruments of trade policy, including Japan’s 2019 restrictions on the Republic of Korea, the expansion of the United States Entity List and China’s export licensing on gallium, germanium, antimony and graphite,” the paper underlines, while calling for urgent action to address some of the critical gaps in the supply chain, including raw material procurement. These include undifferentiated incentives, the absence of domestic reference standards for accredited testing and feedstock minerals falling under ministries separate from the semiconductor programme.

Considering the existing equations, the moot point now is: enthusiasm and optimism notwithstanding, as seen at Yashobhoomi during those 3 days, how will the scene really unfold in the near to medium term? “The global equation is clear. When it comes to IP-driven chip manufacturing, the hegemony of the US and countries which are part of the supply chain it has created will remain unchallenged for many years. China will continue to try hard to develop its own expertise. India, with its current focus, can become a very big market for assembly and testing, to begin with, considering its own demand conditions. On the side, it can also try to develop fab manufacturing facilities,” says John Derzy, VP of Hirata Corporation America. Hirata is a Japanese firm that sells production systems to semiconductor players and is exploring incentives offered by states to set up its production base in collaboration with a local partner. Others also believe that, considering its large electronics and automobile markets, India should be looking to enhance its OSAT (outsourced semiconductor assembly and test) capabilities significantly. According to John Maculley, Business Value Consultant (High Tech Industry), Dassault Systèmes, ISM’s new policy is somewhat similar to the US CHIPS Act. “I think, India’s policy and strategy can be equated with what the US had done with the CHIPS Act vis-à-vis its spending plan. They are assuring the stakeholders of the unconditional backing of the project by the government,” he observes. Dassault Systèmes specialises in 3D virtual models and simulations and belongs to the same group that is known for making Rafale aircraft. “The critical factor in the future would be how the private sector takes up the command after everything that the government has offered. I think we will begin getting the results of India’s semicon push in the next 3-10 years,” adds Derzy.

Favourable factors

A critical segment dominated by the likes of Nvidia, AMD, Qualcomm, Apple, TSMC, Intel, Samsung, ASML, etc, it would be interesting to see how they respond to India’s bid to emerge as a semiconductor powerhouse. But there are favourable factors: as mentioned, there is a serious quest for more global hubs for the semiconductor business and India is a huge domestic market in its own right. The manpower pool, if developed diligently, could be a major plus. Under phase one of the Semicon programme, the government had engaged nearly 400 universities and institutes in basic semiconductor chip-design education (a programme in which academia and industry are close stakeholders). And it is promising to take this programme to the next level under Semicon 2.0, both in quantitative and qualitative terms. “In addition, the Government has set a target of training one lakh technicians over 5 years. This will involve partnerships with industry and international institutions, including institutions such as ITRI, Taiwan, to establish training capabilities aligned with the requirements of India’s emerging semiconductor manufacturing facilities,” a government release maintains, while adding that it is also targeting the mainstreaming of 200 semiconductor design start-ups. “The industry needs skilled people in chip design, manufacturing, testing, materials and characterisation facilities. This creates a major opportunity for India to build capabilities in automotive, industrial engineering, telecom, quantum technologies and medical devices. The talent base will grow meaningfully when policy support, private investment and practical skilling programmes work together over the medium to long term. Our focus should not be only on numbers, but on developing globally competitive expertise,” explains C Sridhar, Mission Director, Andhra Pradesh State Quantum Mission.

Incidentally, a recent report by PwC (Semiconductor and Beyond Report) has projected the country’s semiconductor workforce to register a growth of 120 per cent by 2030. A talent pool of nearly 400,000 professionals is expected to provide support to India’s evolving semiconductor ecosystem, which will make it the second-largest country in terms of the segment-specific talent pool after the US. And it’s not easy to dispute the fact that the presence of an adequate talent pool often acts as that much-needed dynamo.