Introduction
Semiconductors — the tiny chips that power everything from smartphones to satellites — have emerged as the most critical resource in today’s digital economy. For decades, India has relied on imports for chips, mostly from Taiwan, South Korea, and China.
But the tide is turning.
In 2021, India announced a ₹76,000 crore Semiconductor Mission to reduce dependence on imports and become self-reliant in chip manufacturing. This blog explores what the mission involves, why it matters, and how it positions India in the global semiconductor landscape.
What is the India Semiconductor Mission (ISM)?
The India Semiconductor Mission (ISM) is a specialized initiative under the Ministry of Electronics and IT (MeitY), launched in December 2021 as part of the Production Linked Incentive (PLI) Scheme.
Objectives of ISM:
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Build semiconductor and display fabrication units (fabs) in India
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Develop R&D and design capabilities
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Promote skilled manpower for the semiconductor sector
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Create robust chip supply chains within the country
ISM is guided by the vision of "Atmanirbhar Bharat" and aims to attract leading global companies and build domestic capability.
Why Semiconductors Matter
Semiconductors are essential to:
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Smartphones, laptops, and electronics
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Cars, medical devices, and energy grids
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Defense, space, and AI technologies
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Emerging fields like IoT, 5G, robotics, and quantum computing
Global chip shortages during the COVID-19 pandemic exposed India’s vulnerability. The mission is about resilience, security, and economic leadership.
Key Announcements & Partnerships
🏭 Major Proposed Semiconductor Fabs:
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Micron Technology (USA)
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Location: Sanand, Gujarat
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Investment: ₹22,500 crore
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Purpose: Chip assembly and testing
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Tata Group
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Planning semiconductor fabs with global partnerships
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Display fab plant under consideration in Tamil Nadu or Gujarat
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ISMC (Israel-based Tower Semiconductor)
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Proposed facility in Karnataka
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Delayed due to Intel’s acquisition of Tower
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Vedanta-Foxconn JV
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Was planning ₹1.5 lakh crore fab in Gujarat
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Now restructured; Vedanta exploring new tech partners
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📈 Government Incentives:
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Up to 50% subsidy on capital expenditure for chip plants
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10-year tax holidays for new facilities
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Focus on fabless startups, design infrastructure, and compound semiconductors
Challenges in Semiconductor Manufacturing
Despite strong intent, building chip fabs in India is not easy:
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High capital cost: One chip fab can cost over $10 billion
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Water and power requirements: Chip making is resource-intensive
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Skilled workforce shortage: India still lacks chip engineers and technicians
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Technology access: Advanced fabrication tech is dominated by a few countries
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Geopolitics: US, Taiwan, China, and South Korea dominate the sector
India's Strengths and Opportunities
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Strong talent pool: India already leads in chip design — 20% of global design engineers are Indian
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Growing electronics market: India's electronics consumption is projected to reach $400 billion by 2025
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Policy push: Strategic collaborations with Japan, USA, and Europe under Quad and IPEF frameworks
Global Backing and Momentum
India is part of global chip talks with:
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USA under the India–US Initiative on Critical and Emerging Technology (iCET)
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Japan through a semiconductor MoU
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European Union via EU-India Trade & Tech Council
India aims to be part of the trusted supply chain outside China, which aligns with the global "China+1" strategy.
Future Roadmap
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Skilling programs: Training 85,000+ chip professionals in coming years
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Research hubs: Semiconductor R&D centres in collaboration with IITs and global labs
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Deep tech startups: Encouraging design and fabless companies
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Chip packaging & OSAT units: Easier to set up than fabs; help India climb the value chain
Conclusion
The India Semiconductor Mission is not just an industrial plan — it's a strategic necessity. While chip manufacturing is capital-intensive and technologically complex, India’s coordinated push can pay off in the long run.
With continued reforms, international partnerships, and ecosystem development, India could become a semiconductor powerhouse — ensuring national security, technological autonomy, and economic growth.