he global semiconductor industry is going through a fundamental shift, and India is steadily emerging as a serious contender in the race to build a more diversified and resilient chip manufacturing ecosystem.
As geopolitical tensions rise and companies look to reduce their dependence on China, global technology leaders are increasingly turning their attention to India. Backed by strong policy support, a growing engineering talent base, and long-term economic reforms, India is positioning itself as a credible alternative in the global semiconductor supply chain.
The COVID-19 pandemic exposed deep vulnerabilities in global supply chains, particularly in semiconductors. Combined with ongoing US–China trade tensions, this has pushed governments and corporations to rethink their reliance on a single manufacturing hub.
China’s dominance in chip manufacturing has made diversification a strategic priority. India stands out as a potential alternative due to its democratic governance, large domestic market, improving ease of doing business, and strategic location. For global investors, India offers a chance to spread risk while tapping into a fast-growing technology ecosystem.
Recognizing the strategic importance of semiconductors, the Indian government launched the India Semiconductor Mission in 2022. The program is backed by an outlay of ₹76,000 crore, or roughly $10 billion, aimed at building capabilities across chip fabrication, design, testing, and packaging.
The initiative is designed to support both domestic and global companies setting up operations in India. Beyond this, the government has approved investments worth $15.2 billion to establish three semiconductor plants, including India’s first full-scale fabrication facility. These steps signal a clear intent to move beyond design services and into manufacturing.
India’s policy direction has begun to attract meaningful global interest. Intel has announced a $100 million investment in India focused on research and development. While modest compared to fabrication costs, the investment strengthens India’s role in chip design and innovation, which are critical parts of the semiconductor value chain.
TSMC, the world’s largest contract chip manufacturer, has also shown growing interest. Its participation in industry forums such as the Gujarat SemiConnect Conference and ongoing discussions around collaboration reflect a strategic alignment with India’s ambitions.
There have also been reports of a potential joint venture involving Intel and TSMC to operate Intel’s chip facilities, with TSMC taking a minority stake. While not India-specific, such partnerships highlight how global players are reassessing manufacturing strategies and could eventually open doors for India-based operations.
Among Indian states, Gujarat has positioned itself as a leading destination for semiconductor investments. The Gujarat SemiConnect Conference has become a key platform for engaging global chipmakers and suppliers.
At the 2025 edition of the event, eight memorandums of understanding worth over ₹1.5 lakh crore, or about $20 billion, were signed. These agreements focus on chip manufacturing units, assembly and testing plants, and supporting infrastructure. The scale of these commitments underlines Gujarat’s growing role in India’s semiconductor roadmap.
Despite the momentum, India’s semiconductor journey is not without hurdles. Large-scale manufacturing has historically been slowed by bureaucratic processes, regulatory uncertainty, and infrastructure gaps. Semiconductor fabrication also demands deep expertise, reliable utilities, and a highly skilled workforce.
India’s ecosystem is still at an early stage and will require sustained investment in education, research, and supplier networks to meet global standards. Execution and consistency will matter as much as policy intent.
That said, the coordinated push from central and state governments, combined with rising global interest, suggests the foundation is being laid. Partnerships between Indian stakeholders and global technology leaders will be critical in turning ambition into reality.
India’s push into semiconductor manufacturing reflects a broader global shift toward supply chain diversification. With strong policy backing, rising investment, and collaboration with companies like Intel and TSMC, India is moving from aspiration to action.
While it will take time to match established hubs, India is increasingly seen as a long-term player in the global semiconductor landscape. If execution keeps pace with intent, the country could play a meaningful role in shaping the future of global technology manufacturing.
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