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

As the 3-day SEMICON India 2026 gets underway today in New Delhi, India's semiconductor policy needs to look beyond fabrication units and into the ecosystem that sustains a rising number of these units. The supply chain is globalised. So, India need not secure self-sufficiency in all aspects. It must lower dependency on materials, equipment and technologies that face geopolitical uncertainty. GoI has a role in keeping channels open, while industry should seize the diversification opportunity.

India now has exposure to the entire semiconductor value chain - design, automation, materials, equipment, fabrication, assembly and packaging. Effort should go into strategic dominance at select points on this chain. India has several strengths, like in design and testing. It has to add to these more critical capabilities like IP and chemicals.

Read more: SEMICON India 2026: India’s chip story has moved from files to factories, says PM Modi


The first two iterations of India's semiconductor policy were geared towards seeding investment. These have been successful with a dozen chip plants in various stages of implementation. Policy focus should switch to securing localisation through incentives for companies that produce silicon wafers, high-purity gases and photoresists. Incentives can be tied to output milestones instead of upfront capital subsidies. Government procurement can work as another prop for localising identified nodes along the chip supply chain. Institutional testing capacity must come up to certify local vendors.

The local talent pool must gain access to sophisticated training across the board. Inter-government ties with other chip manufacturing countries should emphasise joint research and supply chain resilience. Fiscal support must incorporate penalties for not meeting tech transfer and localisation metrics.

Chip-making involves reliable partners, long-term financing and assured project expertise. Holistic effort is required for yield management that involves process engineering, clean room operation, lithography and packaging reliability. A fab-ready workforce can be built through apprenticeship.