India is not only known to be a hub for software and semiconductor design but also wants to establish itself as a global player in semiconductor manufacturing — an industry that is critical for products from smartphones and telecom networks to automobile motor vehicles, defense technology and AI. The issue now is not whether or not India has sufficient talent, but whether or not they can develop the factories, workforce and supply chain infrastructure to become a competitive player within the semiconductor sector.
An example of India’s strength in marketing semiconductor engineered products is through companies such as Tejas Networks, who are headquartered in Bengaluru and specialize in designing complex semiconductors used in telecom networks. These specific chips vary considerably from consumer-oriented smartphone processors.
Co-founder Arnob Roy states that “Telecom chips can support a number of users simultaneously, so if they go down it could cause disruption to your telecommunications company.”
It’s clear that India has a comparative advantage when it comes to telecom chips. Approximately 20% of all semiconductor engineers in the world are employed in India and all the major semiconductor manufacturers operate large R&D facilities in India. According to Amitesh Kumar Sinha of the Ministry of Electronics and Information Technology (MEIT), India is currently contributing to the development of advanced technology worldwide.
The missing piece is domestic manufacturing
What India lacks – own semiconductor manufacturing capability. Currently, most of the semiconductor chips designed in India are manufactured overseas – primarily in Taiwan and East Asia. Because of this dependence, when the global chip shortage happened during the COVID-19 pandemic, industries were forced to slow down due to not having enough chips.
India is starting with the OSAT (Outsourced Semiconductor Assembly and Test) model and will work on packaging, assembly and testing before moving onto Ultra-modern or advanced Chip creation through Wafer Fabrication Plants (fab) or other means.
“This is by far the best way to begin,” commented Ashok Chandak, IESA.
Enter Kaynes Semicon, the first company in India to invest in an OSAT facility ($260 million USD) located in Gujarat. This facility began production around January of 2025.
“The chips we’re producing don’t have an AI flavor,” said Kaynes Semicon’s CEO Raghu Panicker. “The product we’re creating is critical to the economy and security of India.”
Developing the skills necessary to produce these semiconductors is extremely difficult, according to Panicker. Developing the talent necessary to produce Semiconductors is very hard. It’s extremely important to have the right process discipline when working with semiconductors. You can’t just give someone who hasn’t worked with the process, six months of training and expect them to have the same level of experience as someone who’s worked perfecting their skills for five years.”
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The Long-Term Vision of the Government
The Indian Government’s ambitious future goal includes manufacturing 3 nm chips by 2032 according to Ashwini Vaishnaw, the Indian Union Minister, which is the technology used in cutting-edge computers and smartphones.
Under a Design-Linked Incentive Program (DLI), India is focusing on developing six types of chips, they are Computing, Radio Frequency/processors, Networking, Power Supply, Sensors and Memory, with a view to achieving 70%–75% of the necessary technologies to be self-sufficient in these areas within the next few years.
Will India be able to be competitive in chip manufacturing?
India will not take the place of China or Korea in the manufacturing industry overnight. Therefore, by constructing a viable semiconductor future step by step, which includes focus on design now; to develop packages next; and to produce the manufacture of advanced chips at a later stage, India is establishing a credible semiconductor future through their long-term investment of resources.
“Deep technology requires patience” said Roy of Tejas Networks. It is apparent that India will now begin making serious long-range investments.
India will, therefore, no longer just be the design hub for the world, but will now also be an emerging force in the manufacturing of chips.
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