India’s Semiconductor Leap

When Prime Minister Narendra Modi told delegates at SEMICON India 2026 that "our chips, coming out of India's plants, have started reaching customers in the country and the world," he was marking something more than a rhetorical flourish. He was closing, however tentatively, a gap between promise and product that has defined India's semiconductor ambitions since the mission's launch in 2022. For a country long resigned to being the world's back office - brilliant at software, hopelessly dependent on imported hardware - the news that commercial production has begun at plants in Mohali and Surat, alongside the earlier Micron assembly and testing facility at Sanand, represents a genuine inflexion point.

It's premature to call India a semiconductor power. The most advanced fabrication nodes, the ones driving the AI revolution, remain the preserve of Taiwan, South Korea and the United States, and no cabinet approval will alter that hierarchy overnight. But the Government's wager has never been on leapfrogging into the technological frontier. It has been about capturing the far larger, less glamorous market for mature-node chips-the components that run washing machines, cars, industrial sensors, and communication devices, and that make up the overwhelming bulk of global semiconductor demand. This ambition is realistic and, based on the evidence so far, achievable.

What has been achieved deserves acknowledgement. The Sanand facility gave India its first tangible foothold in assembly, testing, marking and packaging. Mohali and Surat have since moved that foothold into commercial output. Roughly 70,000 engineering students have already been trained in chip design against a target of 100,000, a workforce dividend that will outlast any single factory. And the Cabinet's approval in July of the Rs 1.275 lakh crore Semicon 2.0 programme, alongside a Rs 62,500 crore mobile manufacturing scheme, signals that this is not a one-off gesture but a sustained financial commitment. Equally important, though less remarked upon, are the technology-transfer arrangements struck during the Prime Minister's foreign visits with global equipment makers-the unglamorous machinery deals that matter as much as headline capital outlays, since chip-making know-how is absorbed through collaboration and exposure rather than decree.

The pipeline is substantial. India's first fabrication unit is expected to be on stream by 2028, a marker that will determine whether the country can move beyond packaging and testing into actual chip fabrication. Semicon 2.0 widens the net further, targeting design, equipment, materials and advanced packaging in one sweep. The Prime Minister's call for silicon photonics capacity to support AI infrastructure, and his linking of the chip push to expanded power generation - solar and nuclear - for data centres and high-performance computing, suggests the Government understands that semiconductors cannot be developed in isolation from the broader industrial and energy ecosystem they depend upon.

Yet gaps remain, and the Prime Minister was right to name some of them. India still has too few fabless design companies and too little domestically generated intellectual property; it remains, in large part, an assembler of other nations' designs. Correcting the situation will require more than incentive cheques. Universities and technical institutes need to be drawn more deeply into industry-funded research, not merely as suppliers of trained graduates but as genuine partners in innovation, on the model the Prime Minister himself invoked. The call for Indian researchers abroad to return and contribute to advanced technology work is sound in principle but will need concrete fellowships, laboratories and career pathways to become more than an appeal.

There is also the matter of the ancillary ecosystem - the chemicals, gases, precision tools and speciality materials without which no fabrication plant can function. These remain overwhelmingly imported, and India's ability to localise them will do as much to determine long-term resilience as any single fab. Comparisons with Hindustan Aeronautics or Tata Motors are instructive here: both built genuine capability not through one factory but through decades of incremental absorption, adaptation and, eventually, indigenous innovation.

None of this diminishes what has been accomplished. Three years ago, India's semiconductor ambitions existed largely on paper. Today, chips are shipping, plants are running, and a second, more ambitious phase of policy is underway. The task now is to convert this early momentum into the deeper capabilities - design, materials, fabrication - that will determine India's semiconductor dream.