From phones to fabs: India is building its semiconductor muscle

India’s semiconductor story is entering a new phase: from building the case for manufacturing chips at home to assembling the ecosystem needed to design, make, package and eventually build systems around them.

But the larger significance of this year’s SEMICON India lies beyond the three-day exhibition. The theme — ‘Silicon to Systems: Building the Ecosystem’ — reflects a semiconductor strategy that is widening from fabs to chip design, advanced packaging, equipment, materials, talent and electronics manufacturing.

Also read: SEMICON India 2026: Chip away into the whole ecosystem, policy should look beyond fab units


India’s semiconductor push is moving beyond project announcements and factory construction towards commercial production, Prime Minister Narendra Modi said on Thursday. Inaugurating SEMICON India 2026, Modi said the country’s chip story was moving from plans to actual manufacturing and called for greater private-sector investment in research and development.

Also Read: India’s chip story has moved from files to factories, says PM Modi

India bets on the fact that a semiconductor industry cannot be built around a handful of fabrication plants alone. It needs the layers around the chip to develop at the same time.

India’s semiconductor push has its roots in a much larger transformation in electronics manufacturing.

Electronics production has risen from about ₹1.9 lakh crore in 2014-15 to ₹13.11 lakh crore in 2025-26, while electronics exports have increased from around ₹38,000 crore to ₹4.24 lakh crore, according to government data.

Mobile manufacturing has grown even faster.

India’s electronics manufacturing shift	2014-15	2025-26
Electronics production	₹1.9 lakh crore	₹13.11 lakh crore
Electronics exports	₹38,000 crore	₹4.24 lakh crore
Mobile phone production	₹18,000 crore	₹6.27 lakh crore
Mobile phone exports	₹1,500 crore	₹2.59 lakh crore

Smartphones, which did not feature among India’s top 100 exported commodities in 2014, became the country’s largest individual exported commodity in FY26. India now makes 99.2% of the mobile phones it uses and has moved from being a net importer of mobile phones to a net exporter. The mobile manufacturing ecosystem alone supports around 12 lakh jobs, while the broader electronics manufacturing sector supports about 25 lakh direct and indirect jobs.

That manufacturing base matters because semiconductors sit further upstream in the electronics value chain. The government’s approach has therefore been to move from finished products to components and, ultimately, the chips and equipment that underpin them.

Also read: India’s semiconductor funding reaches ₹1.34 lakh crore, but capital flows into fewer players

The ₹2 lakh crore-plus semiconductor bet

The first major policy push came with the Semicon India Programme, approved with an outlay of ₹76,000 crore.

The programme was designed to cover the semiconductor value chain rather than focus exclusively on fabrication — spanning chip design, fabs, packaging and testing, equipment, materials and talent.

The next phase is substantially larger. The Union Cabinet approved Semicon 2.0 in July 2026 with an outlay of ₹1,27,500 crore. The scheme stands at six broad pillars of chip design, semiconductor equipment and materials, fabrication facilities, advanced packaging, research and development, and talent development.

The progress under the first phase provides the clearest indication of how far the programme has moved beyond policy announcements.

Semiconductor push	Progress
Semicon 1.0 outlay	₹76,000 crore
Semicon 2.0 outlay	₹1,27,500 crore
Approved semiconductor projects	12
Committed investment	Over ₹1.64 lakh crore
States with approved projects	6
Projects already in commercial production	3

The 12 approved projects span silicon and compound semiconductor fabrication, display fabrication and advanced packaging. Micron, Kaynes and CG Semi have already started commercial production in India.

That is an important shift in the nature of India’s semiconductor story. The country is no longer only talking about attracting fabs; some of the capacity supported by the programme is now producing commercially.

The chip is only as strong as the ecosystem around it

A semiconductor fab is one part of the chain.

Before a chip reaches a factory, it has to be designed and verified. After fabrication, it needs to be packaged and tested. Around these processes sit specialised equipment, chemicals, gases, materials, software and highly trained engineers.

This is where India’s design push becomes important.

The Chips to Start-up programme, launched in 2022, is intended to build a domestic pool of semiconductor talent. The programme targets 85,000 industry-ready professionals across undergraduate, postgraduate and doctoral levels.

Electronic Design Automation tools, the software used to design, simulate and verify chips, have been made available across hundreds of academic institutions. More than 68,000 students had been trained under the programme, according to government data supplied for the initiative.

The government has also approved 24 semiconductor design projects for financial support, while 105 startups and MSMEs have received access to industry-standard EDA tools under the Design Linked Incentive scheme.

By April 2026, 211 chips had been taped out by 75 institutions, with seven subsequently fabricated at various nodes, including 12-nanometre designs.

At the centre of this effort is the ChipIN Centre at C-DAC Bengaluru, which provides shared access to chip-design infrastructure, EDA tools, computing resources, fabrication support and technical assistance.

The numbers illustrate the scale of the effort:

• Around 1 lakh individuals from about 400 organisations have used shared national EDA infrastructure.
• More than 175 lakh hours of tool usage have been recorded.
• Six shared wafer runs have enabled 122 chip-design submissions from 46 institutions.
• 56 student-designed chips have been fabricated, packaged and delivered.
• Participating institutions have filed more than 75 patents.
• More than 500 IP cores, ASICs and system-on-chip designs are under development.

The significance is not simply the number of chips produced. It is the widening of access to infrastructure that would otherwise be prohibitively expensive for many academic institutions and young companies.

From sand to silicon to systems

That broader value chain is precisely what SEMICON India 2026 is designed to showcase.

The exhibition features a new ‘Sand to Silicon to Systems’ Value Chain Experience, taking visitors through the semiconductor journey from materials and equipment to manufacturing, packaging, electronics and systems.

More than 600 companies are set to participate, alongside international and Indian industry leaders, policymakers, investors, researchers, startups and students. The event features country pavilions from Japan, South Korea, Malaysia, the Netherlands, Singapore and Sweden, as well as state booths, a startup pavilion, innovation showcase, student hackathon and workforce development pavilion.

The conference also covers supply chains, chemicals and materials, manufacturing technology, AI and digital transformation, product design, sustainability, startups, talent and government programmes.

That breadth is deliberate. India’s semiconductor ambition increasingly depends on how well these pieces connect.

Chips and AI are becoming one story

The semiconductor push is also unfolding alongside India’s effort to build domestic AI capabilities.

AI systems require powerful and specialised processors, while the expansion of AI infrastructure is driving demand for advanced chips and high-performance computing. The two industries are therefore becoming intertwined.

The IndiaAI Mission, with an outlay of about ₹10,372 crore, has expanded shared computing capacity to more than 45,000 GPUs as of June 2026. By August, 237 projects had accessed subsidised computing capacity, accounting for 93.18 lakh GPU hours.

At the same time, India is supporting indigenous foundation models, AI datasets, public-sector applications and AI Centres of Excellence.

This creates another reason for India to build capabilities further up the technology stack. The chips powering AI systems are not simply another electronics component; they are becoming strategic infrastructure for the next generation of computing.

The global supply chain opportunity

India’s semiconductor ambitions are also unfolding as companies and governments reassess the concentration of global chip supply chains.

The disruption caused by the pandemic exposed the vulnerability of industries that depended on chips manufactured in a limited number of locations. Since then, governments have sought to diversify semiconductor manufacturing, packaging and critical supply chains.

India is seeking to position itself within that reorganisation, not merely as a large electronics market, but as a location for parts of the global semiconductor value chain.

Its participation in international technology partnerships, including the Pax Silica coalition, is part of that wider effort. The coalition focuses on strengthening the global silicon supply chain, spanning areas from critical minerals and semiconductor manufacturing to advanced AI infrastructure.

For India, the opportunity extends beyond producing chips for domestic consumption. The longer-term proposition is to become part of the global network that designs, manufactures, packages and deploys them.

What SEMICON India is really testing

SEMICON India 2026 comes at a useful point in that journey.

Five years after the launch of the Semicon India programme, India has an investment pipeline of more than ₹1.64 lakh crore across 12 approved projects, with three facilities already in commercial production. At the design end, startups, academic institutions and engineers are gaining access to tools and fabrication infrastructure. At the other end, the country already has a rapidly expanding electronics manufacturing base.

The harder task is to connect these pieces.

The next phase will determine whether India can build enough suppliers around its fabs, develop globally competitive indigenous chip designs, deepen advanced packaging capabilities, create a reliable talent pipeline and integrate domestic companies into global semiconductor supply chains.

That is why the shift from ‘silicon to systems’ matters.

The ambition is no longer limited to making the chip. It is to build the industrial, technological and human infrastructure around it and, eventually, the products and systems that depend on it.

SEMICON India 2026 puts that evolving ecosystem on display. The more consequential question, however, is what happens after the exhibition halls close: whether the investments, designs, talent and partnerships now taking shape can turn India from an emerging electronics manufacturing base into a durable participant across the semiconductor value chain.