India’s Rise as a Global Semiconductor Manufacturing Hub

From cellphones and satellites to electric vehicles, medical devices, and defence systems, semiconductors are the invisible power behind it all. These tiny chips are found in everything from everyday consumer electronics to advanced industrial systems.

As the demand for chips increases globally, nations are racing to establish strong, future-proof supply chains. One of the race's rising stars, India has established itself as a global powerhouse ready to take the lead rather than just competing.

This blog will look at how India is embarking on its transformation from a chip design contributor to a significant semiconductor manufacturing hub. We will examine the major developments in government initiatives, infrastructure, key players, and enablers that are fueling this growth. You will also learn about the materials ecosystem, how companies like Orbit & Skyline are establishing a strong foundation for the country's high-tech future, and the strategic role India is beginning to play in global chip supply chains.

The World Runs on Chips: Why India Now?

India has a long history of involvement in the semiconductor sector. For many years, the country has served as a hub for chip design and embedded systems. Indian engineers and companies have had a major impact on global semiconductor innovations, especially in the areas of VLSI design and software development. But now, the focus is on something much more ambitious: building a robust domestic manufacturing ecosystem.

India's semiconductor industry has the potential to grow to Rs. 3,47,800 crore (US$ 40 billion) by 2030, driven by advancements in the supply chain ecosystem, particularly chemicals and gases essential for chip manufacturing.

Also, according to the India Electronics and Semiconductor Association (IESA), the global semiconductor supply chain market is projected to reach Rs. 36,51,700 crore (US$ 420 billion) by 2030, with India targeting a 10% share. (Source)

"You are in the right place at the right time. The chips are never down in 21st century India. When the chips are down, you can bet on India." - Narendra Modi

India is now harnessing its talent pool, strong IT infrastructure, and demographic dividend to become a leader in semiconductor manufacturing.

Mapping the Semiconductor Ecosystem: Key Players and Enablers

India's semiconductor narrative is being powered by global partnerships, state-level initiatives, and ecosystem support. As the industry grows, it’s important to recognize the key players who form this interconnected ecosystem. Here’s how they are categorized:

1. Semiconductor Fabs:

These are high-tech facilities where silicon wafers are processed into integrated circuits. Examples include:

• Micron Technology: Setting up an ATMP (Assembly, Testing, Marking, and Packaging) facility in Gujarat.
• Tata Electronics + Powerchip Semiconductor Manufacturing Corporation (PSMC): Building a greenfield fab in Dholera, Gujarat.
• ISMC + Tower Semiconductors: Proposed fabrication plant in Karnataka focusing on analog chip production.

2. OEMs (Original Equipment Manufacturers):

These companies build semiconductor tools or end-use systems powered by chips. Notable examples:

• Applied Materials: Investing in an R&D center in Bengaluru.
• Lam Research: Expanding training programs and local presence to support fab operations.
• Sahasra Semiconductors: ATMP player supplying to electronics OEMs in India.

3. Material Suppliers:

Provide critical raw materials like wafers, chemicals, photoresists, and specialty gases used in chip fabrication. Examples include:

• Air Liquide: Gas and chemical supplier expanding into Indian semiconductor parks.
• JSR Corporation: Supplying photoresists through international partnerships.
• Emerging Indian chemical manufacturers supported under the Make in India initiative.

4. Semiconductor Service Providers:

These companies provide crucial support for fabs and OEMs, offering engineering expertise, and training throughout the entire lifecycle of semiconductor production. Examples:

• Orbit & Skyline is a trusted semiconductor partner that provides turnkey solutions in the semiconductor domain. Our team has global fab experience in equipment engineering, process engineering, and facility management.

  We offer semiconductor OEMs and device manufacturers the most comprehensive and synergistic solutions. As a fast-growing semiconductor services company with a global footprint, we service most fabs worldwide. Our intense customer focus is geared towards meeting and exceeding expectations.

These international collaborations highlight India's proactive efforts to strengthen its semiconductor ecosystem and develop long-term capabilities in both the OEM and fab domains.

India's Global Collaborations in Semiconductor Manufacturing

India's semiconductor landscape is also being rapidly shaped by major international collaborations:

• Micron Technology's $2.75 billion investment in a chip assembly and testing plant in Gujarat. (Source)
• Tata Electronics, with support from the India Semiconductor Mission, is investing US$10.44 billion to build a fab in Dholera, Gujarat, with a capacity of 50,000 wafers/month and expected to generate 20,000+ jobs. (Source)
• India-US Collaboration under CHIPS Act: In September 2024, the US State Department announced that the US will partner with India’s Semiconductor Mission to explore opportunities for strengthening the global semiconductor supply chain under the ITSI Fund, part of the CHIPS Act of 2022. This collaboration will involve a comprehensive assessment of India’s semiconductor infrastructure and regulatory framework, with input from stakeholders such as state governments and educational institutions. The insights gathered will guide future joint initiatives aimed at boosting this critical sector. (Source)
• Larsen & Toubro Ltd. Investment in Fabless Chip Company: Larsen & Toubro Ltd. has announced plans to invest over US$300 million to establish a fabless chip company in India. This initiative is aimed at designing 15 products by 2027, helping India reduce its semiconductor imports and build local capacity. The company has requested support from the central government for chip design incentives but will not seek external funding. This aligns with India’s broader semiconductor push and builds on the US$10 billion initiative approved in 2021, which has already attracted significant investments. (Source)
• CG Power, Renesas Electronics, and Stars Microelectronics: These companies are working together to establish an Outsourced Semiconductor Assembly and Test (OSAT) facility in Sanand, Gujarat. The pilot facility is expected to be completed by July 2025, with chip production beginning by mid-2026. Full-scale operations are planned for October 2027. The total investment stands at US$222 million. (Source)
• HCL-Foxconn Joint Venture: Approved in May 2025, this ₹37.06 billion (US$435 million) semiconductor plant will be built near Jewar Airport in Uttar Pradesh. It will have a capacity of 20,000 wafers/month and produce up to 36 million display driver chips annually. Commercial production is expected to begin in 2027. This marks the sixth fab project cleared under India's Semiconductor Mission. (Source)
• Kaynes Semicon: On September 2, 2024, the Union Cabinet approved Kaynes Semicon's proposal to establish a semiconductor unit in Sanand, Gujarat, with an investment of ₹3,300 crore (approximately US$394 million). The facility will have the capacity to produce 6 million chips per day, catering to sectors such as industrial, automotive, electric vehicles, consumer electronics, telecom, and mobile phones. This marks the fifth semiconductor unit approved under the India Semiconductor Mission and the second to be set up in Sanand. (Source)
• Tata Electronics – Assembly & Test Facility in Assam: The Government of India approved Tata’s proposal to build India’s first indigenous semiconductor assembly and test facility in Jagiroad, Assam, with an INR 27,000 crore investment. This greenfield facility will support key platform technologies like Wire Bond, Flip Chip, and Integrated Systems Packaging (ISP), catering to global demands in AI, automotive, and consumer electronics. The facility is expected to begin its first phase of operations by mid-2025, creating over 27,000 direct and indirect jobs. (Source)

And alongside these big players, are companies like Orbit & Skyline, which are powerfully enabling the ecosystem. Orbit & Skyline acts as a bridge between fabs and OEMs, offering specialized services like tool hook-up, equipment engineering, process development, semiconductor material supply, and VLSI design support. By filling in critical technical and supply chain gaps, Orbit & Skyline is becoming a key facilitator of India’s semiconductor transition.

India's Semiconductor Fab Growth

India’s ambitions in semiconductor manufacturing have evolved over decades—from early public-sector initiatives to today’s fast-paced global collaborations. While initial efforts faced infrastructure and investment hurdles, the country has now reached an inflection point.

With dedicated policies, increasing private-sector involvement, and significant global partnerships, India is actively building the full semiconductor value chain—ranging from wafer fabrication and assembly to packaging and testing.

The infographic below captures this evolution, tracing landmark milestones such as the establishment of SCL in Mohali, policy frameworks in the 2000s, and recent billion-dollar commitments from global players like Micron, AMD, and Foxconn. Each phase reflects India’s persistence in building a resilient and future-ready semiconductor ecosystem.

(Source: Forbes India)

India's semiconductor sector is set to generate one million jobs by 2026, spanning multiple roles across various stages of the semiconductor value chain."  — Microchip USA

What once seemed a distant goal is now backed by a clear vision, financial incentives, and growing global trust. This next phase will position India as a critical manufacturing base in the global semiconductor supply chain.

Government Initiatives Supporting Semiconductor Fab in India

The construction of semiconductor fabs in India requires massive capital investments, skilled labor, long-term policy stability, and an advanced supply chain. Recognizing this, India has launched several government-backed initiatives:

• PLI (Production Linked Incentive) Scheme: Offering financial incentives to semiconductor and electronics manufacturing firms.
• DLI (Design Linked Incentive) Scheme: Encouraging homegrown chip design startups and IP development.
• Semicon India Programme: A comprehensive initiative supporting the entire value chain—from silicon to system.

Why Top Semiconductor Companies Are Choosing India

India's positioning among the best semiconductor companies in the world is backed by several strategic advantages:

• Skilled Workforce: India has a vast pool of Science, Technology, Engineering, and Mathematics (STEM) graduates, providing the skilled talent necessary for semiconductor manufacturing, design, research, and development.
• Cost Advantage: The country offers a substantial cost advantage for semiconductor manufacturing due to lower labor costs, supply chain efficiency, and an emerging ecosystem.
• Government Initiatives: India's government has launched several initiatives, including the Production Linked Incentive (PLI) Scheme, to encourage semiconductor manufacturing. These policies provide financial incentives and support for setting up semiconductor fabrication units.
• Global Trust: Partnerships with USA, Japan, Israel, and EU reinforce confidence in India’s potential.

Semiconductor Fab in India: Orbit & Skyline’s Role in Supporting OEMs and Fab Infrastructure

A semiconductor fab cannot operate in isolation. It needs a robust network of OEMs (Original Equipment Manufacturers), EMS (Electronics Manufacturing Services), material suppliers, and R&D partners.

This is where companies like Orbit & Skyline play a critical role. With their expertise in:

• Tool hook-up services
• Process engineering
• Equipment engineering
• Supply of semiconductor-grade materials and chemicals
• Design-to-fab integration support

Orbit & Skyline is helping India build a connected and scalable semiconductor fab ecosystem that supports both fabrication and OEMs. Their presence across multiple verticals ensures efficient project execution, compliance with global standards, and minimized delays.

Conclusion: Why India Is Becoming a Semiconductor Manufacturing Powerhouse

India's place in the global technology ecosystem is about to change. The nation is moving toward end-to-end semiconductor capabilities, from design to packaging, and is no longer limited to backend services.

India's semiconductor journey is accelerating due to international collaborations, strategic government support, and a strong network of service providers like Orbit & Skyline.

This transformation is not just about setting up fabs—it’s about shaping the future of technology in India.

And India isn't just catching up in this future. It is preparing to become the global leader in high-tech innovation.

India is laying the groundwork to become the leader in the semiconductor industry, not just joining it.

With 15+ years of expertise and a global team of 500+ engineers, Orbit & Skyline is a trusted partner in the semiconductor industry. If you are looking for a semiconductor services and solution partner, reach out to us at hello@orbitskyline.com.