Semiconductors Made in India: What's Really Happening?

Type 'semiconductors in India' into any search bar and brace yourself for buzzwords—"Silicon Valley of the East," "chip revolution," and so on. But stop for a second: are there actually semiconductors being made in India right now? Or is it just hype and government press releases?

The short answer: India still doesn’t have any full-scale fabs cranking out mainstream chips at the scale you see in Taiwan or Korea. Most chips used in Indian electronics—from smartphones to TVs—are still shipped in from places like Taiwan, China, or the US. So, if you're hoping to buy a made-in-India processor for your next phone, you'll be waiting a bit longer.

But there’s action. In Gujarat, the Tata Group has kicked off work on the country's first big semiconductor fab. This is a $11 billion project aiming to make 28nm chips—think car electronics, industrial gadgets, maybe even basic consumer hardware. They’ve broken ground, but actual chip shipments? That’s not happening until late 2026 or 2027, assuming no hiccups. Until then, most "chip making" in India is more about assembly and packaging—fitting imported wafers into packages so they can finally reach your gadgets.

It matters, though. Every step—from chip design to assembly and, someday, full manufacturing—shortens supply chains, reduces imports, and creates new jobs. But for now, design is where India shines: nearly every global chip brand has engineers in Bangalore sketching out circuits and firmware solutions, even if those little bits of silicon are still baked somewhere else.

• Where India Stands Today
• New Investments and Big Promises
• Challenges Holding India Back
• What This Means for Electronics Makers

Where India Stands Today

Let’s get straight to it—India doesn’t have a homegrown semiconductor fab running full tilt just yet. If you’re looking for chips actually being manufactured and tested on Indian soil, that’s still on the to-do list. Right now, most of the action is in chip design, backend assembly, and testing, rather than full-on fabrication.

The country is a major design hub. Big names like Intel, Qualcomm, Texas Instruments, and AMD run sprawling R&D centers in places like Bangalore and Hyderabad. Thousands of engineers here create chip blueprints and optimize circuits. However, once the design is done, the physical chips (the actual silicon) still get made in plants abroad and then shipped back as finished or semi-finished components.

If you’ve seen headlines about Indian chip production, it’s usually about assembly, testing, marking, and packaging (what folks in the industry call ATMP or OSAT). Companies like SPEL Semiconductor in Chennai and Sahasra Semiconductors in Rajasthan are doing this work. It’s important, but it’s basically the last few steps after the hard part—the fabrication—has happened somewhere else. For now, India’s chip factories are packaging imported wafers, not manufacturing them from scratch.

Of course, there’s a ton of buzz around new projects (which we’ll get to). But as of today, if you’re looking for a semiconductor that started as raw silicon and was finished right in India, you’ll come up mostly empty. The real jump from chip design and assembly to full-scale chipmaking hasn’t happened just yet. That’s what makes the next few years so interesting—and high stakes—for India’s electronics manufacturing push.

New Investments and Big Promises

India’s semiconductor scene got a serious boost in the last couple of years, mostly from mega announcements and government cash. The Indian government set up a $10 billion incentive fund to attract chipmakers, and it’s finally paying off with hard numbers to look at.

The noisiest move? Tata Group’s fab in Gujarat. Backed by a $11 billion investment, this fab aims to churn out 28nm chips—perfect for cars, power gadgets, and some IoT stuff. Construction started in early 2024, and if things stay on track, chips will start rolling off lines by 2026 or 2027. It’s being pitched as the big-bang start of India’s foundry game, and it has roped in global tech partners for both technology and supply chain know-how.

Tata isn’t riding solo. Micron Technology—big name in memory—set up a $2.75 billion assembly and testing plant, also in Gujarat, that kicked off in late 2023. Micron’s factory won’t make wafers, but it does take imported chip dies and packages them for global and Indian markets. For electronics folks, this shortcut can lower lead times on critical parts.

There’s also talk—lots of it—around partnerships. Foxconn (the world’s biggest electronics manufacturer) flirted with India’s semiconductors push too, signing MOUs and exploring projects, but as of now, engineers are still working on blueprints rather than building chips.

Now, here’s the kicker: all this investment is exciting, but actually making advanced, fully homegrown chips is still 2–3 years away—if not longer. The takeaway? India’s building momentum fast, but chips made and packaged in India are still going to be rare for at least a few more product cycles. If you’re running an electronics manufacturing business here, this means planning with a healthy dose of patience.

Challenges Holding India Back

Building a semiconductor industry isn’t just about pouring money into factories. There’s a messy, complicated reality behind India’s efforts that slows everything down. For starters, the biggest headache is the lack of a solid supply chain. To run a high-end fab, you need a bunch of raw materials—ultra-pure chemicals, specialty gases, and equipment that’s pretty much custom-made. Most of these still need to be imported, and each shipment comes with its own delays and extra costs.

There’s also a major skills gap. Running a chip factory isn’t like managing a car plant. You need highly trained engineers with years of experience, plus technicians who understand the quirks of high-precision machines. Sure, India has tons of software engineers and chip designers, but hands-on semiconductor manufacturing expertise is rare right now. It’s not something you pick up in a six-month course.

Power and water are deal-breakers too. Semiconductor fabs need a non-stop, ultra-clean supply of both. Outages, voltage swings, or even small contaminants in the water can wreck a whole batch of chips worth millions. Indian states are pushing to upgrade their grids and water systems, but they’re still behind the benchmarks set by places like Taiwan.

Finally, there’s the issue of global competition. Money matters—a lot. Countries like the US and China are throwing around tens of billions in incentives to attract big players like TSMC and Intel. India’s government is making a serious effort with a $10 billion chip subsidy plan, but it’ll have to keep ramping up support and cutting red tape if it wants to keep up.

• If you’re in electronics manufacturing or planning to start, don’t expect local mass production of semiconductors before 2027. Plan your supply chain accordingly.
• If you’re interested in training, focus on programs that connect you to hands-on apprenticeships—not just classroom theory.

Bottom line: India is making moves, but there’s still a bumpy road ahead before made-in-India chips start powering everyday devices.

What This Means for Electronics Makers

If you run a gadget business or build stuff with chips in India, the local chip scene is going to be a game changer—eventually. Right now, though, you’re still mostly at the mercy of imports. Most chips rolled into devices like power banks, TVs, routers, or EVs are designed elsewhere and arrive here pre-made. That means higher costs thanks to shipping, currency swings, customs, and global shortages nobody in India can control.

The big hope is that as semiconductor fabs actually start pumping out chips locally, it’ll get easier and cheaper to build electronics in India. No more waiting months for shipments stuck in Shanghai or Singapore. Having domestic supply could also offer steadier prices, quicker turnarounds, and faster prototyping for startups who can’t always stomach the long lead times from overseas suppliers.

Here’s what’s likely to change for electronics makers as Indian fabs ramp up:

• Semiconductors could eventually cost less due to reduced logistics and duties.
• You might see faster development cycles, especially for companies building things like IoT devices, smart wearables, or automotive components.
• Indian brands could finally compete on a more level playing field with international names, since they can source critical parts faster and sometimes even collaborate directly with local chip designers.
• Quality control gets a boost—since shorter supply chains mean snags can be sorted out face-to-face rather than over email chains that cross continents.

If you’re wondering how much local manufacturing could cut down on chip dependency, check out this simple breakdown of the current reality:

If you’re making or designing electronics, keep an eye on Gujarat’s Tata Electronics fab and Micron’s packaging plant in Sanand. They’re not solving all problems overnight, but just one chip made at home means less hassle with distributors and potentially better margins in the next few years.

Hot tip: Start building relationships early with Indian chipmakers and design houses. As soon as the first real chips roll out, those with a head start could be the first to grab better deals and more responsive support, giving them a leg up on the global competition.