For decades, India has provided world-class engineers to design computer chips for international tech giants. However, the country imported virtually all the physical hardware required to run its electronics. That dynamic is shifting under the India Semiconductor Mission (ISM).
Three semiconductor assembly, testing, marking, and packaging (OSAT) facilities—including Micron, Kaynes Semicon, and CG Power—have entered commercial production in Sanand, Gujarat. Additional manufacturing facilities are slated to go operational, transforming theoretical investments into real-world manufacturing.
Major Projects Fueling the Surge
The Cabinet has approved 12 semiconductor manufacturing units with a total investment commitment exceeding ₹1.64 lakh crore ($20 billion). The cornerstone of this push is Tata Electronics’ collaboration with Taiwan’s Powerchip Semiconductor Manufacturing Corporation (PSMC) to construct a ₹91,526 crore wafer fabrication plant in Dholera, Gujarat. This project focuses on producing mature-node chips (28nm and above) essential for automobiles, telecommunications, and power systems.
Simultaneously, major packaging plants are coming online:
Tata Electronics (Assam): A ₹27,120 crore OSAT facility targeted at producing millions of units daily.
CG Power JV (Gujarat): Focused on automotive and industrial chip packaging in partnership with Japan's Renesas.
HCL-Foxconn JV (Uttar Pradesh): Aimed at display driver chips for mobile devices and laptops.
What is the Difference Between a Fab and an OSAT Facility?
A semiconductor "fab" (fabrication plant) creates raw microchips on silicon wafers from complex designs. An OSAT or ATMP facility takes those manufactured wafers, cuts them into individual chips, packages them into protective cases, and tests them for quality before they are placed onto circuit boards.
Why It Matters for Ordinary Citizens and the Industry
A strong local semiconductor base reduces India’s dependency on foreign supply chains. Global disruptions, like the microchip shortages that hit car manufacturers in previous years, directly impacted vehicle pricing and waiting periods. Establishing local chip production stabilizes domestic electronics supply, lowers manufacturing costs over time, and fosters high-skilled employment.
Through educational initiatives, over 300 Indian universities have integrated semiconductor engineering curricula, training tens of thousands of specialized engineers to meet industry demand.
What Could Happen Next: Semicon 2.0
As the initial outlay under the ₹76,000 crore ISM initiative matures, the government is introducing "Semicon 2.0". This next phase shifts focus toward expanding domestic supply lines, supporting raw material production, building equipment manufacturing ecosystems, and incentivizing indigenous intellectual property (IP) design. While leading-edge logic processors (like sub-5nm smartphone CPUs) remain dominated by Taiwan and South Korea, India's focus on mature nodes creates a foundation for long-term self-reliance.
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