India's semiconductor industry is on the verge of a significant breakthrough with the anticipated unveiling of its first domestically developed chip in 2025. This marks a pivotal moment in the nation's journey towards self-reliance and a prominent position in the global semiconductor market.

Ambitious Goals and Strategic Initiatives

The Indian government has been actively promoting the development of a robust semiconductor ecosystem through various strategic initiatives and policies. The "Semicon India Program," with a $10 billion incentive package, aims to attract major investments and establish India as a global hub for electronics manufacturing and design. This program offers financial assistance of up to 50% for setting up semiconductor and display fabrication units.

Union Minister for Electronics and IT, Ashwini Vaishnaw, has stated that the first "Made in India" chip, utilizing 28 to 90 nanometer technology, is expected by the end of 2025. This chip is targeted for use in various sectors, including automotive, telecom, power, and railways, which collectively represent approximately 60% of the global semiconductor market.

Government Support and Investment Trends

The Indian government's commitment to the semiconductor industry is evident through the approval of multiple semiconductor manufacturing facilities. As of May 2025, six chip fabrication units are under development. A joint venture between HCL and Foxconn to establish the sixth semiconductor manufacturing facility was approved in May 2025 as part of the India Semiconductor Mission.

In addition to government initiatives, private companies are also making substantial investments in India's semiconductor sector. Tata Electronics is investing significantly in its Gujarat fab and its Assam assembly and testing unit. Micron Technology is investing $2.75 billion in a chip assembly and testing plant in Gujarat. These investments are expected to create numerous job opportunities and contribute to India's self-reliance in semiconductor production.

Focus on Skill Development and Design Capabilities

Recognizing the importance of a skilled workforce, the Indian government is also focusing on skill development and training programs. Prime Minister Narendra Modi emphasized the need to build a skilled workforce of 85,000 semiconductor professionals, including engineers and technicians. The Skill India Semiconductor Program (SISP) aims to train 100,000 engineers in chip design, fabrication, and testing by 2025.

Furthermore, the government is emphasizing the growth of indigenous intellectual property and chip design capabilities. There is an ongoing effort to develop 25 chips using domestic intellectual property, which aims to enhance cyber security.

Challenges and Opportunities

Despite the positive momentum, India faces several challenges in its pursuit of becoming a global semiconductor hub. These challenges include the need for massive capital investments, advanced supply chains, long-term policy stability, and a skilled workforce. Additionally, India currently accounts for a modest portion of global wafer fabrication capacity and capital expenditure on semiconductor equipment.

However, India also has several strategic advantages, including a large domestic market, a cost-competitive environment, and a growing demand for electronic devices. The Indian electronics manufacturing sector is expected to reach US$ 520 billion by 2025, further accelerating the demand for semiconductors. The increasing adoption of AI and IoT technologies is also driving growth in the semiconductor market.

Looking Ahead

India's semiconductor market is projected to grow significantly in the coming years. The India Electronics and Semiconductor Association (IESA) projects the market to grow to $103.4 billion by 2030. UBS projects a compound annual growth rate (CAGR) of 15 percent for India's semiconductor market over the five-year period ending in 2030.

The launch of India's first domestically developed chip in 2025 is a crucial step towards achieving its semiconductor ambitions. By combining strategic government policies, investments in infrastructure and skill development, and collaborations with global partners, India is well-positioned to become a key player in the global semiconductor industry.