India Prepare for Semiconductor

How India is Preparing for Semiconductor Production

Edition: August 18, 2025

Executive Summary

India’s semiconductor push has moved from policy intent to on-ground execution. With a ₹76,000‑crore incentive umbrella under the India Semiconductor Mission (ISM), a green‑lit advanced logic fab at Dholera (Gujarat) led by Tata Electronics with PSMC, and multiple ATMP/OSAT plants (including Micron in Sanand) under construction, India is building the foundation of a full chip value chain—design, manufacturing, assembly/test, and advanced packaging. Domestic semiconductor demand in 2024–25 is variously estimated at ~US$50–55 billion and is projected to double by 2030. Mobile/IT and industrial electronics account for the bulk of demand today; automotive is the fastest‑rising vertical as EVs, ADAS and telematics proliferate. India’s talent base—~1M+ engineering graduates annually and ~120–125k chip design engineers—gives it a strong design advantage while workforce skilling programs (Chips‑to‑Startup, SEMI‑aligned curricula, new semiconductor PG tracks) aim to close fab‑specific skills gaps.

Bottom line: India won’t be 100% self‑reliant across all nodes by 2030, but it can realistically localize a large proportion of assembly/package, mature‑node logic (28/40/65nm), and analog/power chips, while leveraging global partnerships for leading edge.

1) India’s Current Readiness

Policy & incentives

• India Semiconductor Mission (ISM) with ₹76,000 crore (~US$10B) in incentives covering fabs, display, compound semis, and design.

• Production Linked Incentive (PLI) schemes for electronics (mobiles, IT hardware), and DLI for chip design start‑ups.

  
  

Projects on ground

• Logic fab (Dholera, Gujarat): Tata Electronics + PSMC (28nm class, scalable to other mature nodes). Multi‑billion‑dollar investment; construction initiated.

• ATMP/OSAT: Micron’s ATMP in Sanand, Gujarat ramping; additional OSAT units approved across states (incl. Assam, AP, Odisha, Punjab in 2025 approvals).

• Design/R&D: Most global majors (Qualcomm, Intel, AMD, NXP, TI, MediaTek, Synopsys, Cadence, etc.) operate large design centers in India.

  
  

Infrastructure & ecosystem

• Emerging clusters: Dholera–Sanand (Gujarat), Noida–Greater Noida (UP), Bengaluru (Karnataka), Hyderabad (Telangana), Chennai belt (TN), Assam/NE for OSAT.

• Focus areas: Dedicated power/water, cleanroom infrastructure, special customs/expedited imports for equipment, and supply‑chain vendor parks (chemicals, gases, spares).

  
  

2) How Big is India’s Semiconductor Demand?

Estimates vary by analyst, but converge on US$50–55B (2024–25), with a ~12–18% CAGR to 2030. For planning, we use a midpoint US$54B (2025) baseline and stratify demand by end‑use.

Demand Stratification (Planning View, 2025)

Method: Map end‑use electronics production/consumption shares to semiconductor BOM intensity; weight for growth (EVs/automation up). Segment ranges reflect differing analyst baselines; totals target ~US$54B.

• Computer & IT hardware (PCs, data center boards, peripherals): US$11–13B (~21–24%)

• Machine building & industrial automation (PLC, drives, robotics, power electronics, IoT/IIoT): US$10–12B (~19–22%)

• Automotive (ICE + EV, 2W/3W/4W, CV, telematics/ADAS): US$6–8B (~11–15%)

• Domestic & consumer appliances (TVs, white goods, set‑top/wearables/smart home): US$12–14B (~22–26%)

• Telecom (handsets network not in scope here), Defense/Aero, Others (payments/ID devices, meters, medical): US$8–10B (~15–18%)

• Agriculture (sensors, GPS modules, farm automation, pumps, drones): US$0.6–1.0B (~1–2%)

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Growth drivers 2025–30: EV penetration (2W/3W fastest), smart meters (400M+ target base), industrial automation capex, 5G/FTTx rollout, and domestic IT hardware manufacturing.

3) Talent: Does India Have the Engineers & Know‑How?

• Design strength: ~120–125k chip/VLSI design engineers; India houses ~20% of global chip design talent.

• Graduation pipeline: ~1.0–1.5M engineering graduates annually (BTech/BE/Diploma), with rising seats in CS/EE/ECE.

• Skill gap: Cleanroom operations, equipment maintenance, specialty chemicals/gases, process integration, metrology, and advanced packaging need targeted skilling.

• Skilling initiatives: Chips‑to‑Startup (C2S), revamped semiconductor curricula in IITs/NITs, industry‑led finishing schools, apprenticeships with ATMP/OSATs, and international vendor certifications (Lam, Applied, KLA, ASML partner programs).

  
  

Conclusion: 

Strong design base + large STEM pipeline = talent advantage. Focused fab‑operations skilling and vendor ecosystem development are crucial in the next 3–5 years.