August M
India is trying to reshape its role in the global semiconductor landscape, moving beyond design expertise toward domestic production. The shift is being driven by concerns over supply chain vulnerability and a growing push for technological self-reliance.
While the journey is only beginning, early projects highlight how the country is choosing a cautious and strategic path.
First manufacturing steps
One of the clearest signs of that shift is Kaynes Semicon, a company founded in 2023 that has launched India’s first government-backed semiconductor assembly and testing plant. The firm has invested $260m in a facility in the western state of Gujarat, where operations began in November.
Chief executive Raghu Panicker said the focus is not on the most advanced chips used in artificial intelligence or high-end smartphones. Instead, the plant will handle semiconductors for sectors such as automobiles, telecoms and defence.
“These are not glamorous chips,” Panicker told the BBC, “but they are economically and strategically far more important for India.” He added that packaging and testing are complex, multi-stage processes and a critical link between chip design and real-world use, the BBC reports.
Design powerhouse
India already has a strong position at the design stage of semiconductor development. Arnob Roy, co-founder of Bangalore-based Tejas Networks, said his company designs specialised telecom chips in India that are later manufactured overseas.
“Essentially, we provide the electronics that carry traffic across telecom networks,” Roy said, explaining that telecom chips must be built for constant reliability and huge data volumes.
An estimated fifth of the world’s semiconductor engineers are based in India. Amitesh Kumar Sinha, Joint Secretary at India’s Ministry of Electronics and Information Technology, said nearly all major global chip companies run large design centres in the country.
Lessons from disruption
Despite that strength, India’s reliance on foreign manufacturing has long been a weakness. The Covid pandemic exposed the risks of concentrated global production when chip shortages forced companies worldwide to slow or halt output.
Roy said the crisis underlined how fragile supply chains had become. Sinha added that the disruption strengthened the government’s resolve to build a domestic semiconductor ecosystem to reduce risk and improve resilience.
Choosing a pathway
Chip production involves multiple stages, from design and wafer fabrication to final assembly and testing. The most advanced fabrication facilities are dominated by firms in Taiwan, with China investing heavily to close the gap.
India has opted not to compete directly at that level for now. Ashok Chandak, president of the India Electronics and Semiconductor Association, said assembly, testing and packaging are more realistic entry points, with several facilities expected to reach large-scale output this year.
Long-term ambition
Building a skilled workforce remains a major challenge. Panicker said semiconductor manufacturing requires strict discipline, documentation and years of hands-on experience that cannot be rushed.
Roy believes the payoff will come over time. He expects India to develop a meaningful manufacturing base within the next decade, eventually allowing companies to design and produce complete telecom chipsets domestically.
“It will take patient capital and time,” he said, noting that India is only beginning to support the kind of long-term investment deep-tech industries demand.
Sources: BBC
