Bengaluru — India is accelerating efforts to build a domestic semiconductor industry as policy incentives, private investment and growing chip demand align, according to a new report.
The report, India’s Semiconductor Moment, by venture capital firm Endiya Partners said India is moving to expand its role from chip design to large-scale manufacturing as global supply chains diversify.
It said the country could double its semiconductor market to $103 billion by 2030 from $52 billion in 2024, driven by artificial intelligence infrastructure, electric mobility, defence and next-generation telecom networks.
The India Semiconductor Mission (ISM) and Design Linked Incentive (DLI) scheme have together attracted about ₹1.6 trillion ($18 billion) in private investment across ten approved projects. The ISM covers up to half of project costs, while states provide an additional 20–25 per cent in support.
Approved projects include Tata–PSMC’s fabrication plant in Gujarat, Micron’s assembly and testing facility, and the Tower–Adani and Tata TSAT projects in Maharashtra and Assam. The investments are expected to create capacity for about 90 million chips a day when operational.
On the design side, the DLI scheme has approved ₹803 crore for 23 projects, backed 278 institutions with access to design tools and funded 72 startups. Government programmes such as Chips-to-Startup and SMART Labs are expected to train more than 100,000 engineers in design and process technology.
Strength in design, gap in manufacturing
India employs around 150,000 semiconductor design engineers, or about one-fifth of the global design workforce, but accounts for less than 0.5 per cent of global chip fabrication.
Major global firms including Intel, AMD, Qualcomm, NXP and Texas Instruments operate large design centres in India. AMD’s Bengaluru facility is its largest globally and is expected to reach 3,000 engineers by 2028.
The report said India’s next challenge is to translate its design base into manufacturing capability. It identified gaps in fabrication capacity, assembly and packaging infrastructure, and a projected shortfall of up to 13,000 skilled manufacturing professionals by 2027.
India’s efforts come as governments worldwide seek to reduce dependence on East Asian chip production. Taiwan produces about 60 per cent of the world’s advanced semiconductors, while the United States and Europe are spending heavily to develop local manufacturing.
China is expanding capacity in mature nodes and could reach a 39 per cent share in that segment by 2027, according to the report. The United States’ CHIPS Act and the European Union’s Chips Act have together mobilised more than $550 billion in public and private investment.
The report said India’s potential advantage lies in its design workforce, democratic governance and domestic demand, positioning it as a “trusted partner” in reshaped global supply chains.
Demand drivers in India
The report said domestic demand could anchor India’s semiconductor growth. Electric vehicle sales reached 1.97 million units in 2024, up 27 per cent from the previous year, and semiconductor content per vehicle is expected to rise from $312 for petrol models to more than $600 for electric ones.
India completed its 5G rollout in 2024, covering nearly all districts with over 460,000 base stations. Work on 6G networks is under way through the Bharat 6G Alliance, which is expected to generate demand for terahertz and AI-based network chips.
Defence requirements are also expanding. Spending rose 9.5 per cent in the 2025–26 budget to ₹6.81 trillion. The India–US National Security Fab, launched in 2024, focuses on infrared and gallium nitride semiconductors for strategic and energy uses.
India now has more than 100 semiconductor startups, spanning design, AI chips and power electronics. Venture funding rose from $5 million in 2023 to $28 million in 2024, the report said.
Startups such as Netrasemi, Mindgrove and InCore are developing edge AI processors and RISC–V-based architectures. Others, including Agnit and Maieutic Semiconductors, are targeting defence and industrial markets.
The India Deep Tech Investment Alliance has pledged $1 billion over the next decade for early-stage semiconductor ventures. However, only seven of 59 applicants under the DLI scheme received full approval, highlighting the technical and capital challenges of chipmaking.
Infrastructure and workforce constraints
The report said manufacturing growth depends on improving power, water and logistics reliability. A single semiconductor fabrication plant can use 8.9 million gallons of water per day and require 169 megawatt hours of electricity annually.
India’s logistics costs remain high, equivalent to about 14 per cent of GDP. The report said the country must treat semiconductor manufacturing as critical infrastructure and make reliability a contractual obligation.
It also called for broader training to develop talent across design, process engineering and business functions, to help translate research into production.
The report said India’s next phase will require long-term partnerships with regions such as the United States, Japan, Taiwan and the European Union. Collaboration with global firms could accelerate process learning and technology transfer.
Multinationals are increasing their presence.NXP plans to double its Indian workforce to over 6,000 engineers. Micron’s testing and packaging facility in Gujarat is expected to begin operations in 2025.
What next for India’s semiconductor progress
The report said India’s semiconductor progress over the next five years will determine whether it becomes a manufacturing hub or remains focused on design.
It identified five priorities: reliable infrastructure, expanded technical training, global partnerships, scale-up of startups into product companies, and the institutionalisation of collaborative platforms.
“India’s semiconductor moment has arrived,” the report said. “Sustaining it will depend on reliability, skills and partnerships that build a trusted design-to-manufacturing ecosystem.”
