Vinod Bhat
New Delhi: Semiconductors are the building blocks of modern technology and a foundation of economic power. They power Artificial Intelligence (AI), telecommunications, electric mobility, defence and advanced manufacturing. Technologies such as the Internet of Things (IoT), 5G/6G, data centres and autonomous vehicles are further driving chip demand. Their availability and technological capabilities will increasingly shape innovation, competitiveness and national technological strength.
This growing importance is reflected in the rapid expansion of the global semiconductor market. The global semiconductor market grew at a compound annual growth rate (CAGR) of 6.5 per cent between 2014 and 2024. It is projected to grow at 8.5 per cent over the next 5–10 years. However, recent disruptions have exposed vulnerabilities in the interconnected global semiconductor value chain. Geopolitical tensions have further highlighted the risks of supply dependence. Major economies are therefore strengthening domestic semiconductor capabilities to secure their technological and economic interests.
India is also witnessing rapidly rising semiconductor demand. It is projected to reach USD 110 billion by FY2030 and exceed USD 200 billion by FY2035, while domestic manufacturing remains at a nascent stage. India spent almost USD 150 billion on semiconductor product imports during FY17–FY25. Imports grew at a CAGR of 23 per cent during this period. If this trend continues, annual imports could reach USD 240 billion by 2035. Building a comprehensive semiconductor ecosystem is therefore an urgent national priority. The Government of India is strengthening this ecosystem to advance self-reliance, security, skills and technological competitiveness.
| SEMICON 2026: Catalyzing India’s Semiconductor Ecosystem
Semiconductors form the core of modern electronic systems. Building a strong semiconductor ecosystem is therefore essential for technological resilience, economic security and national self-reliance. Recognising this strategic importance, the Government of India is strengthening the semiconductor ecosystem through policy support, infrastructure and global partnerships. In this endeavours, SEMICON India 2026, themed “Silicon to Systems: Building the Ecosystem,” was inaugurated by Prime Minister Shri Narendra Modi at Yashobhoomi, New Delhi, on 17 September 2026. Being held from 17 to 19 September 2026, the SEMICON 2026 brings together global industry leaders, policymakers, investors, academia and start-ups. It provides a platform to advance India’s semiconductor ambitions and strengthen the ecosystem across the entire value chain. Click To Explore Agenda |
What is a Semiconductor?
A semiconductor is a material whose electrical conductivity can be controlled. Conductors such as copper allow current to flow easily, while insulators strongly resist it. Semiconductor materials can be engineered to switch, amplify, sense or control electrical signals. A transistor is a microscopic electronic switch. Modern integrated circuits place millions or billions of transistors and other components on a small chip. Their coordinated switching makes computing, communications, sensing, memory and power management possible.
Most modern electronic devices depend on semiconductors. Smartphones, computers, medical equipment, automobiles, defence systems, satellites and data centres use semiconductor-based components. In simple terms, semiconductors are the building blocks of modern electronics.
From Silicon to a Semiconductor Chip
Silicon is the most widely used semiconductor material. It is obtained from silica, which occurs abundantly in sand. Chip manufacturing begins with highly purified silicon, which is formed into cylindrical ingots. These ingots are sliced into thin wafers and polished. Inside fabrication plants, wafers undergo hundreds of carefully controlled processes. These include deposition, photolithography, etching and ion implantation.
Together, these processes create the intricate structures that form billions of transistors and other components. During photolithography, patterns are transferred onto the wafer using light. These patterns define structures that ultimately form transistors, interconnects and other parts of a chip. Transistors are the microscopic electronic switches on the chip that control the flow of electrical current. The process is repeated across multiple layers to build complex integrated circuits.
Finished semiconductor devices then undergo Assembly, Testing, Marking and Packaging (ATMP) or Outsourced Semiconductor Assembly and Test (OSAT) processes. Packaging protects the chip and enables it to connect with other electronic components. Testing ensures that the finished devices meet required performance and quality standards.
Understanding Semiconductor Node
A semiconductor node identifies a generation of manufacturing technology. Historically, labels such as 90 nm, 45 nm and 28 nm tracked particular physical dimensions. Today, node names function mainly as shorthand for a process generation. A smaller node can enable higher transistor density, better performance or lower energy use, but the result also depends on circuit design, materials, packaging and the intended application. Advanced nodes attract attention because they support high-performance computing and leading-edge processors. Mature nodes remain essential for automobiles, industrial electronics, telecommunications, power systems and many consumer products. India is now building capabilities that extend from established nodes towards more advanced semiconductor technologies.
Why Semiconductors: A Strategic Perspective
Semiconductors have emerged as a strategic resource for economic growth, technological leadership and national security. Today, Taiwan, South Korea, Japan, China and the United States dominate global semiconductor manufacturing. Taiwan alone accounts for over 60% of global chip production and nearly 90% of advanced chips. This concentration has highlighted the need for secure, diversified and resilient semiconductor supply chains. For India, domestic semiconductor capabilities are more than an industrial opportunity. They are essential for reducing import dependence, strengthening national security and creating high-value employment. They can also deepen technological self-reliance and reduce vulnerabilities across strategic sectors. No single country controls the complete semiconductor value chain. Different economies lead in chip design, fabrication, equipment, materials, memory and packaging. This specialisation has improved efficiency, but it also creates concentration risk. India’s policy therefore focuses on trusted partnerships alongside stronger domestic capacity.
| Semiconductors Power India’s Strategic Missions
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India’s Emerging Semiconductor Ecosystem
India’s semiconductor journey has evolved from building strategic capabilities to creating a broader domestic ecosystem. Early institutions such as the Semiconductor Laboratory (SCL) laid the groundwork, while recent policy interventions have accelerated investment, innovation and talent development. These efforts are positioning India to participate across the semiconductor value chain.
Semicon 1.0: Laying the foundation
The Government of India approved Semicon 1.0 in December 2021, with an outlay of ₹76,000 crore. It aimed to establish a domestic semiconductor and display manufacturing ecosystem. The programme introduced dedicated Schemes for setting up Semiconductor Fabs and Display Fabs. It also introduced the Scheme for setting up Compound Semiconductors, Silicon Photonics, Sensors and Semiconductor ATMP/OSAT facilities. Additionally, the Design Linked Incentive (DLI) Scheme strengthened India’s semiconductor design capabilities. Together, these schemes established the foundation across chip design, fabrication, packaging and related technologies.
