Introduction
Just a few years ago, many industry experts doubted India’s ability to compete in the global semiconductors sector. Critics often argued, “Semiconductor fabs require extreme precision — India cannot match China’s manufacturing expertise.” But today, this narrative is changing rapidly.
India has long been known for polishing some of the world’s tiniest diamonds with unmatched accuracy, a skill demanding micron-level precision.
Our thriving software industry powers major parts of the global semiconductor ecosystem. And with a population of 1.4 billion people hungry for digital access, India stands as one of the world’s most promising markets for electronics.
Even seasoned investors recognize India’s semiconductor potential. Mark Mobius, Chairman of the Mobius Emerging Opportunities Fund, recently highlighted why India is poised to become a global semiconductor powerhouse — based on concrete trends and growing momentum.
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Brief Overview: 5 Key Reasons India’s Semiconductors sector is Changing
Explosive Domestic Demand fuels sustained growth.
Open Technology Ecosystem enables cross-border collaboration.
World-Class Software Talent powers chip design and innovation.
Government Incentives and Policies drive infrastructure and capacity.
Labor Force Precision and Skill underpins manufacturing potential.
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Explosive Domestic Demand: A Massive Market on the Rise
India’s semiconductor consumption is growing at breakneck speed, fueled by the rise of digital devices and industrial automation.
India’s semiconductor market is expected to reach $64 billion by 2026, up from $23 billion in 2019 (Source: IESA, Counterpoint Research)
The consumer electronics market is projected to hit $400 billion by 2030
Over 1 billion smartphone users and 125 million active EVs by 2030 will drive massive chip demand
Digital infrastructure projects like UPI, Aadhaar, ONDC, and BharatNet are pushing chip usage in public systems
Why it matters: This demand makes India not just an export hub — but a resilient domestic market, ideal for companies de-risking from China.
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Open Technology Ecosystem: Collaboration Over Isolation
Unlike many nations that restrict semiconductor technology flow, India embraces an open approach.India is uniquely placed as a neutral partner in the global chip war, with no tech block alignment.
Active Partnerships:
- Micron Technology is building a $2.75 billion ATMP (Assembly, Testing, Marking, Packaging) plant in Gujarat
- Foxconn has signed over 10 MoUs with Indian states for semiconductor assembly
- ISMC Analog Fab proposes a $3 billion plant in Karnataka
- Applied Materials is investing $400 million to set up an engineering center in Bengaluru
Import Flexibility: India sources equipment and tools from the US, Japan, Taiwan, South Korea, and even China — a rare feat in today’s fragmented geopolitics.
Why it matters: India’s openness enables cross-border tech transfer and rapid ecosystem development.
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World-Class Software Talent: The Brain Behind the Silicon
India’s software dominance is now translating into semiconductor design strength.
- India has over 20% of the world’s semiconductor design engineers (Source: MeitY, 2025)
- Major firms like Intel, Qualcomm, AMD, and NVIDIA operate large R&D hubs in Bengaluru, Hyderabad, and Noida
- Over 2,000 chips are designed in India every year (Source: India Semiconductor Mission)
- India ranks #1 in global software services exports, with $320 billion in IT revenue projected for FY25 (Source: NASSCOM)
Skills in Demand: Chip verification, VLSI, firmware, EDA tools, embedded systems, and AI-on-chip software
Why it matters: Software-defined hardware and AI-driven chips need hybrid software-hardware talent — India’s sweet spot.
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Manufacturing Challenges and Opportunities
Building semiconductor fabs is capital-intensive and complex:
| Challenge | Details |
|---|---|
| Capital Expenditure | Up to $10 billion per fab |
| Infrastructure Needs | Ultra-pure water and reliable power |
| Skilled Workforce | Need for cleanroom engineers & technicians |
However, as Mobius notes, “If India can polish diamonds with nanometer precision, it can build chips.” Surat’s diamond polishing industry shows India’s workforce already possesses the required precision and discipline.
The government supports this shift through:
- Production Linked Incentive (PLI) schemes offering subsidies up to 50%.
- Launching semiconductor missions and fab parks in states like Gujarat, Tamil Nadu, and Karnataka.
- Skilling programs for fab operation, testing, and packaging.
The Road Ahead: From Ambition to Reality
India’s journey to semiconductor leadership won’t happen overnight. But with growing domestic demand, strong policy support, skilled talent, and a flexible ecosystem, India has all the ingredients for a semiconductor revolution—much like its IT boom two decades ago.
Geopolitical shifts favor diversification away from China, providing India a timely opportunity to step up.
From fabs and OSATs to design, testing, and embedded software, India can build its semiconductor ecosystem layer by layer. Each success will bring the country closer to a full-stack semiconductor industry.
Conclusion: A Sunrise Sector on the Horizon
Like every major industrial leap in India—from pharmaceuticals to IT to mobile manufacturing—semiconductors face skepticism and challenges.
But when demand, talent, and policy align, industries transform.
Today, semiconductors are no longer a distant dream or moonshot for India. They are the next sunrise sector, ready to shine bright on the global stage.
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