Union Electronics and IT Minister Ashwini Vaishnaw recently affirmed that India's current robust strides in semiconductor manufacturing are a direct result of lessons learned from past unsuccessful attempts, particularly the 2005 SemIndia-AMD project.
Learning from Past Setbacks
Vaishnaw noted that the government initiated the Semicon India program in 2022 with a clear policy framework and execution strategy, aiming to build a resilient domestic chip fabrication ecosystem. This approach contrasts sharply with the challenges faced by the proposed SemIndia-AMD venture nearly two decades ago.
In 2005, a consortium of Indian technologists, SemIndia Inc., planned a significant $3 billion investment in a wafer fabrication facility, leveraging technology licensed from AMD. However, this ambitious project ultimately collapsed due to severe logistical hurdles. Reports indicate that crucial semiconductor equipment imported for the facility became stranded at Indian ports, awaiting customs clearances and approvals from various government departments. The accumulating storage costs forced the companies to eventually return the equipment to China, causing India to miss a crucial early opportunity in chip manufacturing.
Semicon India: A New Era of Manufacturing
Fast forward to today, Vaishnaw highlighted substantial progress, with 12 semiconductor manufacturing units now approved under the Semicon India program, attracting a cumulative investment of $20 billion. He confirmed that three of these units are already actively producing chips, with more anticipated to commence operations soon.
Building on this momentum, the Union Cabinet, led by Prime Minister Narendra Modi, approved the Semicon 2.0 program on July 15. This new phase allocates a budget outlay of ₹1.27 lakh crore (approximately $15 billion) to further bolster India's semiconductor design and manufacturing capabilities. The program outlines six key focus areas:
- Chip design innovation
- Development of semiconductor machinery and materials
- Establishment of additional fabrication plants
- Expansion of Assembly, Testing, Marking, and Packaging (ATMP) and Outsourced Semiconductor Assembly and Test (OSAT) facilities
- Intensified research and development initiatives
- Comprehensive talent development programs
The government's overarching goal is to position India as a pivotal global hub for semiconductor design and manufacturing, thereby strengthening supply chains, fostering economic growth, and enhancing the nation's technological prowess.
Tangible Progress Under Semicon 1.0
Under the initial phase of the India Semiconductor Mission, 12 manufacturing projects have received approval, representing cumulative investments exceeding ₹1.64 lakh crore (approximately $19.7 billion). These projects encompass a diverse range of facilities, including one silicon fabrication plant, one silicon carbide (SiC) fab, an integrated gallium nitride (GaN) Micro LED display fab, and nine advanced packaging units. These facilities are designed to cater to critical sectors such as consumer electronics, automobiles, telecommunications, aerospace, and industrial electronics.
Leading companies like Micron, Kaynes, and CG Semi have already successfully commenced commercial production, marking a significant milestone for India's indigenous semiconductor industry. Another approved unit is projected to begin operations in 2026, further solidifying the country's manufacturing base.