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While Taiwan and China have dominated the semiconductor market over the last two decades, India with it overly ambitious and highly skilled workforce is taking a route with a different objective. The country has seen a large number of businesses investing in its semiconductor infrastructure to great success. As per industry insiders (IBEF), the semiconductor market is expected to exceed USD 100 billion by 2030 – and there is no looking back. The market forecast for 2033 is expected to reach close to USD 161 billion.
For business leaders, India offers an opportunity that not only lends itself to its strategic location with lucrative business opportunities; but also provides a viable alternative to its Asia-pacific counterparts. Given the complexities of the Indian marketplace, interested parties could be in for a surprise; however, the devil is in the detail and overcoming the initial hurdles can be key to hitting the bullseye.
The semiconductor market in India is being shaped by rapid digitalisation, a growing middle class, and proactive policy reforms. Demand is increasing across consumer electronics, automotive systems, industrial automation, defence sector and communication networks. Some key growth drivers are:
Segment Contributions
Integrated Circuits (ICs), including logic, analogue, memory, and microcontrollers capture the largest market share. Supporting categories such as sensors, optoelectronics, and discrete components are also growing very fast because of industrial automation and smart infrastructure development.
India’s policy initiative focuses on coordination between design, manufacturing, and the development of human capital so that sectoral strength is maintained in the long term.
Talent Development: Inter-government, academia, and industry collaboration is building capabilities in VLSI, embedded technologies, and materials science.
R&D: Prime areas of research focus on energy-efficient circuits and AI-based SoC designs, with government–industry partnerships converting research into business solutions.
Collaborative Platforms: Platforms like SEMICON India are essential for industry-wide collaboration and foreign investment.
Strong government support and strategic financial policies have set up the semiconductor market in India for quick expansion. Schemes such as the production-linked incentive PLI, ISM, and Make in India are at the core of driving innovation and large-scale investment.
Production Linked Incentive (PLI) Scheme: With a funding of Rs.76,000 crore, the PLI scheme offers up to 50% cost support for fabs, ATMP, OSAT, and design units. The policy setup eases project implementation and promotes international collaborations.
India Semiconductor Mission (ISM): ISM functions as a single-window body for infrastructure development, ecosystem coordination, and design incubation, ensuring efficiency from investment to implementation.
SEZ and Land Reforms Policy: The government’s initiative to relax SEZ policies and rationalise land policies has increased investor engagement. Gujarat and Tamil Nadu are major gainers from these reforms.
Atmanirbhar Bharat and Make in India: Technological autonomy being their concern, these initiatives promote domestic manufacturing, R&D development, and IP creation, leading India towards end-to-end semiconductor design and manufacturing.
Skilling and Research Development: More than 60,000 semiconductor engineers graduate every year from 278 institutions. The target is to achieve one million trained personnel by 2030 to address the increasing skills needs of the industry.
The implementation of India’s semiconductor policies has started to deliver measurable investment outcomes. As of 2025, ten government-approved projects account for capital commitments worth USD 18–22 billion.
Flagship Projects
Micron Technology ATMP, Sanand, Gujarat
Micron’s USD 2.75 billion Assembly, Test, Marking, and Packaging (ATMP) facility in Sanand started production in early 2025, a big milestone for India’s semiconductor aspirations. The factory has generated about 5,000 direct and 15,000 indirect employment opportunities, providing a significant boost to local jobs and supply chain development. Apart from production, it enhances India’s chip manufacturing resilience, lessens import dependency, and helps build export growth.
Micron has been increasing its R&D presence in Hyderabad and Bengaluru, where it has over 4,000 engineers. The company wants to increase this to 5,000 and has Hyderabad as its central engineering location in India.
Tata Group Semiconductor Fab, Dholera, Gujarat
The Tata Group is setting up a USD 11 billion semiconductor manufacturing plant in Gujarat’s Dholera in collaboration with Taiwan’s Powerchip Semiconductor Manufacturing Corporation (PSMC). The facility, when operational, will manufacture 50,000 wafers monthly, targeting mature nodes like 28nm, 40nm, and 90nm. All these chips will address industries like automotive, industrial, telecom, and artificial intelligence.
The plant has top-end AI-driven process optimisation to optimise efficiency and quality of production. A separate township with approximately 1,500 houses is also being constructed for workers and vendors. The production is expected to start by late 2025, with two more fabrication facilities planned in Gujarat by 2033 by Tata.
Vedanta-Foxconn Fab, Dholera Special Investment Region
Vedanta-Foxconn joint venture is developing one of India’s largest privately financed semiconductor manufacturing complexes. The venture targets both logic and memory chip output and will create a significant number of high-skilled jobs. It also seeks to enhance India’s upstream semiconductor supply chain through technology transfer and scale of infrastructure development, positioning the nation as a competitive force in international chip production.
Foxconn and Applied Materials Projects, Hyderabad, Telangana
Hyderabad is quickly becoming a hub for semiconductor innovation. Foxconn’s expanding research efforts and Applied Materials’ new Engineering Centre are at the heart of this growth. The centre is focused on developing semiconductor equipment and process technologies, while Foxconn continues to develop design and development capabilities.
Telangana has also been drawing new investments in chip design and has organised a number of large collaboration events, such as the inauguration of India’s first advanced 3nm chip design facilities in Bengaluru and Noida with the involvement of top multinational companies. Hyderabad’s robust research and design environment is driving innovation, skill building, and value chain growth, making Hyderabad a critical component of India’s journey in semiconductors.
Regional Hubs
Gujarat, Tamil Nadu, Uttar Pradesh, Odisha, and Assam are emerging as regional centres for semiconductors with the support of state subsidies such as capital assistance, reimbursement of power expenses, and taxation benefits. They also get specialised infrastructure and logistics networks.
Supply Chain Development
India’s investment in semiconductors is driving development in supporting industries such as gases, specialty chemicals, and advanced manufacturing equipment, building a more robust and cost-effective indigenous supply chain.
Semiconductors are the backbone of India’s fast-growing digital businesses, enabling fintech, cloud computing, and more. As India progresses at a faster rate in semiconductor strength, it will be capable of attracting investment, improving supply chain integration, and establishing a larger role in the global technology community.
The rise in Semiconductor market in India is testimony to substantial industrial change based on government policy, overseas capital, and a growing talent base. The sector offers enormous scope for finance, business, and accounting professionals in areas of funding and market growth. If trends continue, India will be well down the road to becoming the world’s leading semiconductor player, driving both domestic and overseas expansion.
