India's Ambitious Journey Towards Semiconductor Independence

Tue Jan 27 2026 21:07:27 GMT+0200 (Eastern European Standard Time)

As India seeks to become a key player in the global computer chip industry, the country grapples with the challenges of semiconductor manufacturing while leveraging its design talents to build a robust ecosystem.

India is positioning itself to emerge as a significant competitor in the semiconductor industry by leveraging its robust chip design expertise, which makes up 20% of the global engineering talent in this sector. The country aims to establish its own manufacturing capabilities to ensure supply chain resilience, particularly highlighted by challenges during the COVID-19 pandemic. Emerging companies like Kaynes Semicon are pioneering domestic chip assembly, focusing on reliable production for telecommunications, automotive, and defense industries. This initiative is seen as the start of a long journey towards building a comprehensive semiconductor ecosystem.

A reliable supply of computer chips is essential for Arnob Roy, the co-founder of Tejas Networks, a Bangalore-based company that powers mobile networks and broadband connections. His firm designs special chips tailored for telecoms, which differ significantly from consumer-grade chips due to their need to handle massive data flows reliably and efficiently.

In India, about 20% of the world’s semiconductor engineers design chips, with many major global chip firms establishing significant research and development centers in the country. Despite this talent pool, India faces challenges in manufacturing semiconductors, often outsourcing production to facilities overseas.

The COVID-19 pandemic spotlighted the fragility of global supply chains, prompting India to accelerate its efforts to build a domestic semiconductor industry. Government officials emphasize the goal of creating a resilient semiconductor ecosystem to mitigate risks associated with reliance on foreign supply chains.

Presently, Indian companies like Tejas Networks design their chips locally but depend on overseas manufacturing. The pandemic's impact highlighted the urgency for India to invest in its semiconductor capabilities to reduce reliance on outside sources.

The semiconductor production involves extensive and costly processes, notably wafer fabrication, currently dominated by companies based in Taiwan, and complicated by China's growth in the sector. India is initially targeting the Outsourced Semiconductor Assembly and Test (OSAT) phase, which is easier to implement than full-scale fabrication plants.

Kaynes Semicon is a pioneer in India’s new semiconductor landscape, marking the first effort to build a local facility supported by government backing. With an investment of $260 million, this facility in Gujarat began operations in late 2023 and aims to produce essential chips for auto, telecom, and defense sectors.

While the facility plans to manufacture less complex chips initially, the focus is on scaling operations before tackling the production of advanced chips for high-tech and AI applications. This strategy aligns with Panicker's view that consolidating an industry begins with serving domestic markets effectively.

As Indian firms like Tejas Networks anticipate the rise of semiconductor manufacturing in the country, Roy expresses optimism about future collaboration and progress, underscoring the time and patience required to build a mature semiconductor ecosystem in India.