India’s semiconductor industry in 2024 is undergoing a strategic reset, evolving from being a purely consumption-driven market to building a foundational semiconductor ecosystem that supports design, manufacturing, testing, and packaging. Against the backdrop of global chip shortages, heightened geopolitical competition, and supply chain realignments, India is making bold moves to establish itself as a global semiconductor hub.
Government-backed initiatives, massive private investments, and increasing demand from domestic sectors such as electronics, automotive, telecom, and data centres have made 2024 a turning point year for India’s semiconductor ambitions. While India still imports nearly all of its semiconductor requirements, the groundwork laid this year signals a clear shift from aspiration to execution. The country is now actively seeking to not only become self-reliant in chip production but also emerge as a key global player in the semiconductor value chain.
Market Landscape: Demand Soars, Supply Being Built
India is currently one of the world’s fastest-growing markets for semiconductors. The total semiconductor consumption in the country reached over USD 30 billion in 2024, and projections indicate that this figure could rise to USD 80–90 billion by 2030. This exponential growth is primarily driven by an expanding electronics manufacturing sector, the deployment of 5G networks, increasing adoption of electric vehicles, and rapid digitisation across industries.
The country's reliance on imported chips is unsustainable in the long run, especially in light of global uncertainties and increasing localisation mandates. Today, semiconductors form the backbone of everything from mobile phones and televisions to aerospace equipment and smart appliances. India’s position as the second-largest smartphone manufacturer globally, and its rapidly growing automotive and electronics sectors, further intensify the need for a localised, resilient semiconductor ecosystem.
In 2024, demand from consumer electronics and mobile phone manufacturing remained robust. This was supplemented by surging requirements from emerging sectors like renewable energy, smart city infrastructure, and cloud data centres. The surge in AI-based applications, especially within India's startup ecosystem and enterprise solutions, also created strong demand for application-specific integrated circuits and AI-optimised chipsets.
Government Push: From Policy to Progress
Recognising the strategic importance of semiconductors to the digital economy, the Indian government has taken a decisive stance. Through the India Semiconductor Mission (ISM), with a planned outlay of USD 10 billion, the government is actively incentivising companies to establish manufacturing and design capabilities within the country. This mission, administered under the Ministry of Electronics and Information Technology (MeitY), has become the central coordinating force in India’s chip ambitions.
In 2024, some of the most significant developments have been the approvals and early-stage construction of major semiconductor and packaging units. Micron Technology’s USD 2.75 billion investment in an outsourced semiconductor assembly and test (OSAT) facility in Sanand, Gujarat, marked one of the most high-profile entries into the Indian chip ecosystem. The facility is expected to become operational by 2025 and will play a crucial role in the backend segment of the semiconductor supply chain.
Another milestone was the formalisation of a joint venture between Tata Electronics and Powerchip Semiconductor Manufacturing Corp (PSMC), which laid the foundation for a USD 11 billion fabrication plant in Gujarat. Once operational, it will manufacture 28nm and 40nm nodes, which are critical for automotive, consumer electronics, and industrial applications.
Alongside these developments, CG Power’s collaboration with Renesas Electronics and Stars Microelectronics has led to the planning of another ATMP (Assembly, Testing, Marking, and Packaging) unit in Gujarat. This cluster-based approach-creating multiple units in proximity-helps in forming a collaborative supply chain network and facilitates easier access to skilled labour and logistics support.
Chip Design and Fabless Momentum
India’s strength in chip design is well documented. The country contributes over 20% of the global semiconductor design talent, and most leading global chip companies-Intel, Qualcomm, AMD, Broadcom, NXP, and Texas Instruments-have their R&D centres in India. These facilities are responsible not only for VLSI design and validation but also for complete product development cycles in many cases.
In 2024, this design prowess received a boost from the Design Linked Incentive (DLI) scheme, which continues to support startups and SMEs engaged in developing IP cores, semiconductor IP blocks, and integrated circuits tailored for niche markets. Over 30 domestic design startups are actively working on radio chipsets, AI accelerators, image signal processors, and microcontrollers aimed at the Indian market. Startups like Saankhya Labs, InCore Semiconductors, and Signalchip have gained industry recognition for creating indigenous designs for telecom, satellite, and automotive applications.
Bengaluru, Hyderabad, and Pune have emerged as vibrant hubs for fabless innovation. In parallel, several engineering institutions have begun offering specialised semiconductor design programs. Industry-academia collaborations are being supported through Centres of Excellence in semiconductor R&D, many of which have received support from ISM and DLI grants.
This vibrant chip design landscape ensures that even in the absence of large-scale fabs, India is contributing significantly to the global semiconductor design value chain. The challenge, however, lies in transforming this strength into end-to-end value by enabling the prototyping, fabrication, and packaging of these designs within the country.
Ecosystem Developments and Key Players
In 2024, India’s semiconductor ecosystem showed signs of maturing beyond just individual projects. Companies across the value chain- fabrication, design, OSAT, and EDA (Electronic Design Automation)-are now beginning to collaborate more strategically. The Tata Group has taken the lead in not only driving fabrication ambitions but also in laying out a vision for a fully integrated semiconductor roadmap that includes chip packaging, electronics manufacturing, and end-use product development.
Micron’s entry has been especially significant in bringing global credibility and attracting adjacent players in the OSAT and supply chain space. Firms involved in testing equipment, clean room setup, and raw material logistics are setting up shop in Gujarat, indicating the beginning of a larger industrial cluster. The creation of semiconductor parks in Tamil Nadu and Karnataka has also garnered interest from multinational equipment manufacturers and material suppliers.
Moreover, Indian IT services majors such as TCS, Wipro, and HCLTech have expanded their semiconductor service portfolios to include embedded system development, EDA tool development, and turnkey chip design services. This trend of traditional IT firms entering the semiconductor services domain underlines the convergence of hardware and software capabilities in India.
SPEL Semiconductors, an established OSAT player based in Tamil Nadu, also began expanding its capacity to support testing services for mobile chipsets and automotive-grade chips. New initiatives to promote foundry-less innovation have led to partnerships between design firms and overseas fabs, enabling Indian players to test and validate their chip designs abroad while they wait for local facilities to go live.
Challenges and Structural Bottlenecks
Despite these encouraging developments, India’s semiconductor story remains at a nascent stage. One of the biggest challenges is the absence of proven fabrication experience. Setting up a foundry requires not only billions in investment but also a highly skilled workforce, clean room infrastructure, and long-term technological collaborations. Technology transfer from established players in Taiwan, Japan, or the US involves complex licensing negotiations and geopolitical considerations.
India also faces bottlenecks in water and power infrastructure-both critical inputs for running a fab. While state governments have offered incentives such as land, subsidies, and tax waivers, consistent delivery of utilities remains a challenge. Moreover, semiconductor fabs require hundreds of process engineers, physicists, and chemical technicians. Building such a talent pool at scale will require sustained investment in education, training, and R&D.
There is also the question of ensuring stable demand once these facilities come online. Without a robust domestic market for consumption of made-in-India chips-especially from government-backed procurement or defence sector requirements-the fabs may struggle to maintain profitability in the early years.
Outlook: What’s in 2025?
Looking ahead, 2025 will be a year of visible progress. The operationalisation of Micron’s OSAT unit is expected to begin in mid-to-late 2025. If timelines remain on track, construction on the Tata-PSMC fabrication facility will enter an advanced phase. The government is also expected to roll out a more refined set of guidelines for component suppliers, utilities provisioning, and cluster development.
There will likely be new announcements from global players evaluating India for back-end or niche-node fabs. India may also emerge as a hub for specialty semiconductor segments such as power electronics, compound semiconductors, and automotive-grade chips. With increasing traction in electric vehicles, industrial IoT, and renewable energy, demand for such niche chips will provide early monetisation opportunities.
Additionally, India’s efforts to become part of the global semiconductor supply chain will receive support from multilateral engagements like the Quad and the India-US initiative on Critical and Emerging Technologies (iCET), which aim to de-risk global chip supply lines and promote collaborative innovation.
While it is too early to claim success, India’s semiconductor market in 2024 has decisively moved from policy announcements to project execution. What unfolds in 2025 will determine whether the country can transition from being a semiconductor design powerhouse to a credible chip manufacturing nation. The road ahead remains challenging, but the direction is clear-and the opportunity, immense.
