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From Zero to Hero: The Pros and Cons of India’s Semicon Fab Ambition

  • EMIS
  • 1 min read

With India’s semiconductor market projected to reach USD 63bn, four times its current value, by 2026, the country already has in place a roadmap entailing a USD 10bn commitment to launch local chip fabrication. The ambitious plan is backed by strong competitive advantages such as a highly trained workforce, comprising 20% of global chip designers.

The global semiconductor shortage forced Indian companies, notably automotive makers such as Maruti Suzuki, to cut production which impacted their profitability from 2022 onwards. This crisis convinced the Indian government it was high time for the country to establish domestic semiconductor production capabilities. The country also saw it as an opportunity to attract more FDI.

A latecomer to the party of tech manufacturing Asian countries, India has announced plans to launch its first ever semiconductor production in December 2024. The government of PM Narendra Modi has started building state-of-the-art manufacturing facilities in Dholera in the western State of Gujarat.

India is trying to establish itself in another important activity linked to the manufacture of advanced semiconductors, namely in Outsourced Semiconductor Assembly and Testing (OSAT). Tata Group has recently proposed to set up an assembly and packaging unit in the northeastern state of Assam, and a total of four Indian companies have either launched operations or announced plans to do so. Thus, if India fails to replicate an entire industry where other countries already hold a commanding lead, it will at least expand its role in the global chip supply value chain, which would still be a significant development.

Whatever the outcome of India’s quest for semiconductor supremacy, the government efforts will help attract FDI into the country, create jobs and ultimately raise India in the global semiconductor value chain.

For more in-depth information and insights on India’s plans to enter the global semiconductor market, check out EMIS Insights’ thematic report From Zero to Hero: The Pros and Cons of India’s Semicon Fab Ambition.

The original news article and data contributions have been taken from the EMIS Insight Thematic Report “From Zero to Hero: The Pros and Cons of India’s Semicon Fab Ambition”.

Author: Biliana Hristova, EMIS Editor