India is making big efforts to join the global semiconductor race this year. The government has allocated a mammoth sum of 1.25 lakh crore to implement India's chip mission, India Semiconductor Mission 2.0. The goal of this futuristic scheme is to diminish import dependence and put India at the forefront of the global chip supply chain. The mission will take place on a large scale, not just the manufacturing units, but also the design units will be enhanced. This article covers the very essence of ISM, milestones achieved, significant projects launched, challenges ahead and the significance of this mission for India's tomorrow. If you want to know about India's chip production or its economic effects, this handbook answers all questions.
What is India's Semiconductor Mission (ISM)?
In 2021, the Minister of Electronics and Information Technology (MeitY) launched the India Semicon Mission. This will aim at establishing a strong semiconductor ecosystem in India. It emphasises the development of self-sufficiency in semiconductors through manufacturing, design and assembly.
The new Mission has a total allocation of 125000 crore, which is one of the biggest technology missions funded by the Government of India. It's a strategic national initiative to establish India's birthright in the critical global chip supply chain. ISM 2.0 is an advanced stage compared to the initial application.
ISM 2.0: What's New and Why It Matters
ISM 2.0 is an improved phase compared to its first phase. The upgraded version will have a more comprehensive focus on materials, semiconductor equipment, materials intellectual property (IP) and resilient supply chains, while ISM 1.0 was focused on manufacturing.
It's built on a more balanced and sustainable ecosystem of nodal players and not a few large foundries. This is important because the key to success in the new era of semiconductors is about strength across all parts of the supply chain. A comprehensive plan that will enable India to be a credible player in the high-value segments and not an assembler ISM 2.0 is a plan that will create sustainable strength over decades, not quick wins.
India's Chip Fabs: Where Manufacturing Stands Today
India is now poised to be a major force in the semiconductor industry. There are a number of large-scale integrated circuit fabrication plants in the country. Several significant projects are underway, such as:
Tata Electronics: PSMC Fab, Dholera, Gujarat
Tata Electronics is joining hands with PSMC, Taiwan, to establish an advanced semiconductor fabrication plant in Dholera, Gujarat. The company will invest heavily in this project, and it will create thousands of jobs.
Micron's ATMP Facility, Sanand
Micron Technology, an American firm, has set up an ATMP (Assembly Test Mark, and Pack) plant in Sanand, Gujarat. The project, which was initiated lately, is a 2,750 crore one and is contributing to building India's capacity in advanced packaging.
Kaynes Semicon, Sanand
This Sanand-based Kaynes Technology Group venture is focused on setting up an OSAT (Outsourced Semiconductor Assembly and Test) facility. This project is also progressing quickly.
CG Semi and Other Upcoming Units
Other businesses are planning to establish their fabrication unit or similar facilities in other states as well. This adds momentum to the mission.
Assam's Tata OSAT Plant, Jagiroad
In Jagiroad, Assam, Tata Electronics is setting up an OSAT plant. This is yet another big investment by Tata in the semiconductor industry that will create thousands of jobs.
Chip Design: India's Quiet Strength
India has been playing a significant role in the semiconductor design arena for a long time. The input in terms of design innovations has been a steady flow of India-centric designs, and the number of design talent from the Indian side is much higher. Further, there are a number of incentives that have encouraged extensive design work in the country, all of which have come from the design. This has led to India having a considerable number of design wins, with companies such as Qualcomm designing several chips for the global market.
Why India Is Racing to Build Semiconductors
India is eager to cut back on its reliance on the few global suppliers. In addition, the tense geopolitical situation of Taiwan has triggered concerns over the possibility of the global semiconductor supply chain being disrupted. Global brands are also re-examining their production models and are looking at India to replace China. This pivot shift will enable India to slowly gain access to the market. Further, the growing penetration of semiconductors in the latest and advanced technologies, such as 5G and artificial intelligence (AI), is driving chip demand growth. Finally, India's initiative towards self-reliance is also on schedule for becoming self-sufficient in semiconductors.
Challenges to India's Chip Manufacturing Road
India is trying to catch up with the global semiconductor market, dominated by the top 3 companies with 70% of the revenues. The major issues in semiconductor manufacturing in India are the requirement for ultra-pure water in large quantities, high power consumption in the fabrication process, low availability of skilled manpower, significant investment in the fabrication process, and lack of indigenous capabilities in semiconductor manufacturing. Furthermore, countries like Vietnam and Malaysia are also looking forward to the semiconductor manufacturing market, and India will have to compete with them. The second hurdle is the incentive package proposed in the US CHIPS Act that will attract away a lot of talent in the semiconductor space from India.
Timeline: India's Semiconductor Roadmap (2026–2028)
2026: Several ATMP and OSAT plants are launched, such as expansion from Micron and Tata.
2027: 1st Mass commercial fab production in Dholera and other sites.
2028: Dholera fab is entering commercial production, and more projects are coming online.
The timeline shows that India is fully prepared and ready to join the global chip manufacturing race with grace.
How This Compares Globally
India has the potential to take a significant market share in the global semiconductor business. But India is more likely to feel a pull towards less technologically evolved manufacturing segments due to the highly competitive nature of the cutting-edge manufacturing space dominated by TSMC and Samsung. To achieve a position in the international market, India will have to overcome the hurdles of high competition, security of supply chains, and geopolitical uncertainties. Moreover, the huge resources that have been dedicated to this mission indicate that India will not embark on this endeavour on its own.
Conclusion / Key Takeaways
Modern technology is based on ISemiconductors. India has recognised this strategic region and has allocated significant investment in it to become self-reliant in making semiconductors. In ISM 2.0, India will be aggressively going for global expansion in the semiconductor sector. The country's huge talent pool is also a key advantage for India to create a robust semiconductor manufacturing ecosystem, which will help it minimise its reliance on foreign manufacturers.
