India's Semiconductor Leap: From Missed Opportunities to Indigenous Chip Production

India missed the chip bus. Now it's playing catch up

India has started manufacturing semiconductor chips. Prime Minister Narendra Modi received the first made-in-India chip. This marks a significant step after years of missed opportunities. The government is investing heavily to boost domestic chip production. The goal is to reduce reliance on foreign suppliers. India aims to become a key player in the global semiconductor market. Semiconductors, also called chips, often no bigger than a fingernail, are the backbone of the modern digital economy. These small chips carry enormous economic and strategic power. So much so, the race to manufacture more and more advanced chips has been likened to the nuclear race of the Cold War era. When chips have become a big issue between the US and China for their use in advanced civil and military technologies, including AI, India has just taken its first step towards chip manufacturing. Prime Minister Narendra Modi on Tuesday received the country's first made-in-India semiconductor chip at the inauguration of Semicon India 2025 in New Delhi. Union IT minister Ashwini Vaishnaw presented the Vikram 32-bit processor, developed by Isro's Semiconductor Lab, along with test chips from four approved projects. Vaishnaw said the achievement reflects the country's rapid progress under the India Semiconductor Mission launched in 2021. "Just a few years ago, we met for the first time to make a new beginning driven by our Prime Minister's farsighted vision. In a short span of 3.5 years, we have the world looking at India with confidence. Today, the construction of five Semiconductor units is going on at a rapid pace." Viaishnaw highlighted India's semiconductor ecosystem push, including the Rs 76,000 crore Production Linked Incentive scheme, of which nearly Rs 65,000 crore has already been committed. While other big countries are racing to develop highly advanced chips, especially to power AI and other emerging technologies, India is just beginning its chip journey. However, India has a history of several missed opportunities over decades which, if taken advantage of, would have put India among the global powerhouses such as Taiwan, China and South Korea, and given it a big strategic leverage too. Also Read | PM Modi's fab plan to change the world and boost India's Atmanirbharta India's lost semiconductor decades India's semiconductor journey has been marked by a long trail of missed opportunities with leading global firms that once showed serious interest in establishing a chip-making footprint in the country. From the 1960s through the early 2000s, India repeatedly failed to convert strategic interests from companies such as Fairchild, Texas Instruments, Motorola and Intel into actual manufacturing plants. Fairchild, the Silicon Valley pioneer, approached India in the late 1960s to set up a semiconductor facility. However, wary of foreign capital and constrained by socialist economic policies, India turned it down. Fairchild instead chose Malaysia, setting the stage for Southeast Asia's rise in chip manufacturing. In the early 1990s, Texas Instruments reportedly offered to co-invest in a semiconductor fab in India. The plan required the Indian government to fund half the project. The government's indecision and lack of urgency led TI to abandon the proposal. India's own Semiconductor Complex Limited (SCL), established in the 1980s in Chandigarh, was seen as a stepping stone toward chip manufacturing. Global players such as Motorola, STMicroelectronics and Matsushita showed interest in collaborating. However, persistent delays in forming joint ventures and lack of ecosystem support drove these companies away. A fire in 1989 gutted the SCL facility, and efforts to revive it with modern tech fizzled out. Intel co-founder Robert Noyce visited India in 1969, but left disappointed due to restrictive policies. Decades later, in the mid-2000s, Intel again explored a fab investment, but government sluggishness ended in that investment going to China and Vietnam. India's Fab City in Hyderabad attracted attention from AMD, which was expected to partner in a $3 billion semiconductor project. Despite initial fanfare and state support, the project never took off due to delays in securing technology partners and lack of coherent federal support. A South Korea-based company, Intellect Inc., had also proposed building a $1.6 billion fab in Andhra Pradesh. It never moved past the planning stage due to regulatory and approval hurdles. Over five decades, India had multiple windows of opportunity to emerge as a serious semiconductor manufacturing hub, with active interest from global heavyweights. Yet, a recurring pattern of policy hesitancy, bureaucratic delay and lack of strategic clarity ensured that each opportunity slipped away. While the recent launch of the Vikram chip marks a significant pivot, it comes after decades of costly inaction that allowed other countries such as Taiwan, China and Malaysia to race ahead. Also Read | Semicon India 2025: Ashwini Vaishnaw presents first made-in-India Vikram 32-bit processor to PM Modi Why India's new semiconductor start matters Semiconductors chips power nearly everything around us -- credit cards, smartphones, washing machines, computers, automobiles, industrial machines, medical devices, missiles and satellites. Despite their size, they play an outsized role in shaping global economic growth, technological progress and national security. A global chip shortage during the COVID-19 pandemic brought auto production to a standstill worldwide. Major car makers like Ford, Toyota, and Volkswagen had to shut down factories or delay vehicle deliveries due to a lack of chips. Shortage of chips had also delayed the supply of American weapons to Ukraine. Countries like the US, China, and members of the EU now classify semiconductors as critical infrastructure, and are investing billions to ensure domestic production. The rise of AI has dramatically increased demand for high-performance chips which are the foundational hardware for AI, enabling the immense processing power needed for AI tasks. Companies like NVIDIA, which design GPUs essential for AI training, saw their market capitalization surge beyond $1 trillion in 2023, underlining how central chips are to the future of computing. The US has imposed export restrictions on advanced chips and chip-making equipment to China, particularly targeting companies like Huawei. These measures aim to limit China's ability to develop cutting-edge technologies, especially in AI and defence. In response, China is investing heavily in its domestic chip sector, seeing it as vital to technological sovereignty. Taiwan Semiconductor Manufacturing Company (TSMC) produces most of the world's most advanced chips. This gives Taiwan enormous strategic leverage, as global tech giants like Apple, AMD and Qualcomm rely on TSMC. The geopolitical tension in the Taiwan Strait has made the global economy acutely aware of its vulnerability due to the concentration of chip production in one region. India's utter lack of indigenous manufacturing of chips makes it dependent on other countries for a product with such a wide range use. That's what forced the government to pour billions of dollars as incentives to set up an indigenous semiconductor industry. Vikram is a step in that direction. A year after the government brought the PLI scheme for chip manufacturing in 2021 to attract foreign investments, it came up with the Design Linked Incentive (DLI) scheme, primarily to provide subsidies to domestic companies in chip design, a sector that already has a large base in India. The government has sanctioned 23 design projects under the Design Linked Incentive scheme, while 10 semiconductor manufacturing projects worth over Rs 1.6 lakh crore have been approved across Gujarat, Assam, Uttar Pradesh, Punjab, Odisha and Andhra Pradesh. The government is now planning the second phase of the India Semiconductor Mission which will focus on getting all component companies, raw material suppliers, etc. to India. Tata-Powerchip Semiconductor Corp's fabrication unit (fab) at Dholera, the Tata group's outsourced semiconductor assembly and test (OSAT) unit in Assam, and the CG Power-Renesas Group combine's OSAT unit at Sanand place India on two different points in the semiconductor value chain -- fabrication and OSAT (Outsourced Semiconductor Assembly and Test). American company Micron is already building its OSAT plant at Sanand in Gujarat. Another American semiconductor company, AMD, has inaugurated in Bengaluru its largest global design centre. India already has a large pool of talent for chip design, another point in the chip value chain. This big start to chip-making in India shows the country's urgency to make the most of the supply chains shifting away from China and Taiwan which China threatens to annexe. As the global race for semiconductor dominance intensifies, chips will continue to shape the balance of power. An indigenous chip industry will give India a lever in that balance of power.

Semicon India 2025: PM Modi says India moving to 'full-stack' semiconductor nation

At the fourth edition of Semicon India 2025 in New Delhi, Prime Minister Narendra Modi called semiconductors the "digital diamonds" of the 21st century and outlined India's rapid progress in the sector. "In 2021, we started the Semicon India programme. By 2023, India's first semiconductor plant was approved. In 2024, we approved some more plants. In 2025, we cleared five more projects. In total, $18 billion is being invested in 10 projects of semiconductors," Modi said. He added that India was moving from a back-end hub to a "full-stack semiconductor nation." Referring to recent milestones, the Prime Minister noted, "The pilot plant of CG Power began 4-5 days ago, on 28th August. The pilot plant for Cades is also about to begin. Test chips are already coming out of Micron and Tata. As I have said earlier, commercial chips will start coming out this year." The Prime Minister also linked the semiconductor mission to India's broader economic trajectory. "Oil was black gold, but chips are digital diamonds. The global market of semiconductors is reaching $600 billion, and in the next few years it will reach $1 trillion. India is going to play an important role in this 1 trillion market share," he said. Union IT Minister Ashwini Vaishnaw presented the Prime Minister with the Vikram 32-bit processor, developed by ISRO's Semiconductor Laboratory and certified for launch vehicles, along with 28 student-designed chips fabricated at the Mohali semiconductor hub. Vaishnaw highlighted progress across manufacturing and talent development. "Construction of five semiconductor units is going on at a rapid pace. Pilot line of one unit is completed and we just presented the first made-in-India chip to the Hon'ble Prime Minister. Two more units will start production in a few months," he said. On workforce development, he added, "By now, 60,000 engineering students have already worked on these EDA tools for more than 13 million hours and the 17 student teams who have designed the chips and taped them out, these chips were today presented to the Hon'ble Prime Minister." Industry leaders from across the globe also addressed the gathering. Christophe Fouquet, CEO of ASML, said: "Semiconductors are the critical enablers of the modern world. From powering mobile phones, medical devices to advanced manufacturing and AI. Today semiconductors are everywhere. Tomorrow AI will be everywhere. We see in India a partner with great potential and we are committed to helping you as we shape the future of technology." Ajit Manocha, President and CEO of SEMI, described India's momentum as "unprecedented." He said: "We have representation from 48 countries and close to 1,275 booths. Last year it was 650 booths. It took Semicon in the US 14 years to come to the 1,300 mark level and it took China 13 years. India in two years we had 1,300 booths. That is unprecedented." Timothy M. Archer, CEO of Lam Research, reaffirmed the company's commitment: "We see India laying a foundation for a resilient semiconductor ecosystem. We are making good progress integrating India into our global supply chain ecosystem... In India, we've enrolled more than 60 universities in collaboration with the India Semiconductor Mission with a goal of training 60,000 engineers over 10 years." Kai Beckmann, CEO of Merck, pointed to the importance of materials: "High quality materials are essential for computer chip production, as the manufacturing process relies on over 500 chemicals and 50 gases, often requiring electronic grade purity exceeding 99.999%. We are dedicated to supporting India's growth by leveraging our expertise and know-how." Applied Materials' President, Dr. Prabhu Raja, said semiconductors were critical for the AI era: "For artificial intelligence to reach its full potential, we need to solve a fundamental problem: how do we innovate more powerful and more energy efficient semiconductors? Applied Materials and India have an essential role to play in making this possible." AMD CTO Mark Papermaster emphasised India's role in its global operations: "At AMD, India is an integral part of our global development. We have developed here engineering talent that is touching every one of our products across CPUs, GPUs, adaptive computing, and embedded devices." Toshiki Kawai, CEO of Tokyo Electron, said: "Through our expertise as a semiconductor manufacturing equipment company and Japanese technology, I would like to contribute to India's semiconductor industry and realise Make in India. So we will do our best." Alexander Gorsky, COO of Infineon Technologies, said: "India is rapidly emerging as a hub for semiconductor innovation. We will make sure to be a driving force in the nation's rapidly growing semiconductor ecosystem. Together, we will follow our mission to drive decarbonisation and digitalisation for a world worth living." Sriram Vishwanathan, Managing Partner of Celesta Capital, announced the India Deep Tech Alliance: "At launch, members have made more than $1 billion in total capital commitment. IDTA is designed to mobilise private capital and expertise to build category-defining deep tech companies from India that will serve the world." The three-day conference aims to strengthen India's semiconductor ecosystem and highlight its growing role in the global supply chain.

Semicon India 2025: Indigenous chip manufacturing with "Made in India Chips"

For decades, the global semiconductor industry has been dominated by a handful of technological giants, with supply chains spanning continents and design hubs concentrated in Silicon Valley and East Asia. However, a quiet revolution is brewing in India, spearheaded by academic institutions, research labs, and government initiatives. The "Made in India Chips" program, prominently displayed at events like SEMICON India, signals a decisive shift towards self-reliance in this critical technology. Far from being a singular product, this initiative is a mosaic of specialized chips, each addressing unique challenges and propelling India into a new era of technological sovereignty. The accompanying display, showcasing a variety of chips developed within India, offers a fascinating glimpse into this burgeoning ecosystem. Let's delve into some of these groundbreaking innovations and their profound implications. At the heart of India's indigenous chip efforts lies the Vikram-32 Processor, a 32-bit microprocessor developed by the Indian Space Research Organisation (ISRO). This isn't just another chip; it's a testament to India's ambition in space and defense. Unlike the processors found in our smartphones or laptops, the Vikram-32 is engineered to be "space-grade." This means it can withstand the harshest environments imaginable: the vacuum of space, extreme radiation exposure, wild temperature swings from -55°C to 125°C, and the violent vibrations of a rocket launch. Also read: GenAI effect: US college students are questioning value of higher education due to AI Its primary role is nothing short of mission-critical: serving as the intelligent brain for India's launch vehicles and satellites. It meticulously handles navigation, control, and mission management, executing complex, real-time calculations to ensure precision and stability in orbit. The development of Vikram-32 signifies a massive leap in securing India's strategic autonomy in space, reducing dependence on foreign components that can be both costly and come with geopolitical implications. Among the featured innovations is an All-Digital PLL Design from Osmania University. A Phase-Locked Loop (PLL) is a foundational circuit in modern electronics, essentially acting as a frequency and phase synchronizer. It generates an output signal whose phase is locked to the phase of an input signal, ensuring stable and precise timing. The "all-digital" aspect is significant. By implementing PLLs entirely with digital components, they become more robust against electrical noise, easier to integrate into complex digital systems, and less susceptible to manufacturing variations that plague analog counterparts. These chips are indispensable for applications requiring accurate clock generation, such as in microprocessors, communication systems, and high-speed data transfer. The future of medicine and human-computer interaction is also being forged in India. NIT Silchar's Neural Amplifier chip is a prime example. This highly specialized, low-noise amplifier is designed to detect and magnify the incredibly weak electrical signals produced by neurons - the fundamental units of our brain and nervous system. Also read: From free calls to India's AI revolution: 5 highlights from RIL AGM 2025 Neural amplifiers are crucial components in advanced medical devices. They are used in neural recording systems for studying brain activity, in diagnostic tools for neurological disorders like epilepsy, and critically, in the burgeoning field of brain-computer interfaces (BCIs) and neuroprosthetics, where they can help restore lost functions or enable direct control of external devices with thought. In an increasingly interconnected world, data security is paramount. IIIT Jabalpur's Advanced Encryption Chip addresses this critical need by building cryptographic capabilities directly into hardware. This chip is designed to perform encryption and decryption algorithms at high speeds, offering a robust defense against unauthorized access and cyber threats. Hardware-based encryption is inherently more secure and faster than software-based solutions, as it is less vulnerable to software exploits and can process data much more efficiently. Such chips are vital for safeguarding sensitive information in national defense systems, secure communication networks, financial transactions, and critical infrastructure. The display also highlights ASICs (Application-Specific Integrated Circuits), exemplified by the "ASIC Multiplier" from NIT Puducherry. Unlike general-purpose processors, ASICs are custom-designed for a single, specific task. This specialization allows them to achieve unparalleled performance, power efficiency, and compactness for their intended function. An ASIC Multiplier, for instance, is engineered solely to perform multiplication operations with extreme speed, making it invaluable in digital signal processing, graphics rendering, and any application requiring rapid, repetitive calculations. The development of ASICs underscores India's capability to create highly optimized, bespoke silicon solutions for niche yet demanding requirements. The "Made in India Chips" initiative, encompassing projects from ISRO's space-grade processors to specialized circuits for medical, security, and computing applications, represents a strategic national endeavor. It's an investment in intellectual capital, a commitment to technological independence, and a bold step towards securing India's place as a significant player in the global semiconductor landscape. As these chips move from research labs to real-world deployment, they promise to power a future where India not only consumes technology but also innovates and produces it, fostering a truly "Aatmanirbhar Bharat" - a self-reliant India.