Semiconductor chips no larger than a fingernail have become the silent driving force behind everything from smartphones to satellites. Now seen as critical infrastructure and strategic assets, they play a central role in both economic growth and defence technologies. Against this backdrop, India’s semiconductor manufacturing journey is only just getting started.
The Historic Missed Opportunities
Over the past 50 years, India had multiple opportunities to enter the chip manufacturing arena. In the late 1960s, Fairchild planned a plant in India, but the country turned it down due to cautious policies favoring self-reliance. Similar hesitations in the 1990s led India to abandon a co-investment proposal with Texas Instruments. A project with AMD in Hyderabad and another with Intellect Inc. in Andhra Pradesh never materialized either—held back by policy deadlocks and indecision.
Why India Fell Behind
Despite early interest from major global players, manufacturing in India didn’t take off. Even the Semiconductor Complex Limited (SCL) in Chandigarh, which had potential, suffered from delays, infrastructure failures, and lack of follow-through. Over time, countries like Taiwan, China, and Malaysia surged ahead in chip production.
A Turning Point: “Vikram” Marks a New Era
At Semicon India 2025, Prime Minister Modi received India’s first homegrown chip—the Vikram 32-bit processor—developed by ISRO’s Semiconductor Lab. This milestone represents India’s commitment, transformed from hesitation to execution, under the India Semiconductor Mission launched in 2021.
Bold Moves to Accelerate Progress
The government, through its ₹76,000 crore Production-Linked Incentive (PLI) scheme, has already committed nearly ₹65,000 crore to chip manufacturing. So far, 23 design-linked projects and 10 major manufacturing projects (~₹1.6 lakh crore) have received approval across states like Gujarat, Assam, and Uttar Pradesh. Companies including Tata, Micron, and CG Power–Renesas are actively building fabs and assembly/test facilities.
Why Now Is Critical
With global semiconductor supply chains shifting in light of geopolitical tensions, India’s entry into chip manufacturing is both timely and strategic. The rise of AI and the push for technological self-reliance make semiconductor production a pressing national priority. Developing this ecosystem will help India reduce dependency on imports and secure its place in a future defined by digital power.
Why This Matters
- Strategic autonomy: Chips are now seen as the “new oil”—critical for both security and growth.
- Correcting the past: Years of missed semiconductors opportunities highlight the cost of inaction.
- A fresh start: With “Vikram” and major government incentives, India is finally crafting its own chip future.
- Global shifts: As supply chains diversify away from traditional hubs, India is positioning itself as a rising node.
Looking Ahead: The Next Chapter in India’s Chip Story
India’s semiconductor trajectory has transformed dramatically—from decades of missed chances to a bold, strategic push toward self-reliance. The seeds sown now—with Vikram, research investments, manufacturing infrastructure, and global partnerships—set the stage for a redefined global role.
Will India rise to the challenge? The answer lies in sustained investment, policy resilience, ecosystem integration, and a long-term mindset. The chips may be small, but the implications are vast—for national security, economic sovereignty, and technological leadership.
References
India missed the chip bus. Now it’s playing catch up
