India’s semiconductor ambitions are no longer just a distant dream—they’re rapidly taking shape, and the country’s strategy is turning heads across the global tech landscape. While much of the world’s attention is fixed on the multi-billion-dollar race to build cutting-edge chip fabrication plants, or “fabs,” India is quietly carving out a niche in areas where it can win: mature-node chip manufacturing, assembly, and testing. It’s a shift that could redefine India’s place in the global semiconductor supply chain.
At the heart of this transformation is a calculated decision to focus on what’s known as mature-node manufacturing—specifically, chips in the 28nm to 65nm range. According to Bastion Research, this approach is a “smart move,” positioning India to fill a vital gap in the world’s chip supply. These mature nodes might not have the glitz of the latest 5nm or 3nm chips produced by giants like TSMC and Samsung, but they’re the backbone of high-demand industries: automotive electronics, telecommunications, industrial machinery, and medical devices. As Bastion Research notes, “India is building its strength in the mature nodes that are essential for high-demand industries.”
But why not aim for the bleeding edge? The answer lies in the sheer complexity and cost of advanced chipmaking. Manufacturing semiconductors involves between 400 and 1,400 distinct processes, grouped into three acts: design, manufacturing, and what’s called Outsourced Semiconductor Assembly and Testing (OSAT). The second act—manufacturing in billion-dollar fabs—gets most of the headlines, and for good reason. These facilities anchor local economies, create thousands of jobs, and offer nations a degree of geopolitical autonomy. The Indian government has certainly noticed, offering incentives worth $10 billion to lure global chipmakers to build fabs on its soil.
Yet, as Finshots explains, India is not alone in this incentive game. The US and China have rolled out similar packages, often on an even grander scale. And building a fab is just the beginning. Getting it to full capacity, calibrating equipment, fine-tuning yields, and ensuring minimal defects can take years—assuming you have a deep pool of experienced engineers and a robust supply chain. Countries like Taiwan and South Korea have spent decades perfecting their craft. For India, catching up is a daunting challenge, even with government support.
That’s why the real opportunity may lie in the third act: OSAT. India already boasts a large pool of electronics and software talent, established supply chains in handsets and automotive sectors, and logistics networks that are improving by the day. Bengaluru and other hubs have decades of chip design experience, thanks to the presence of global semiconductor giants. As Finshots puts it, “India’s immediate strengths fit OSAT for a few reasons. We have a large pool of electronics and software talent, strong handset and automotive supply chains, and improving logistics networks.”
This isn’t just theory. Several anchor projects are already in motion, including Micron’s ATMP (Assembly, Testing, Marking, and Packaging) facility, a joint venture between HCL and Foxconn, and a major Tata Semiconductor plant. These initiatives are buoyed by the government’s 50% capital expenditure grant, which lowers the risk for early movers and signals a serious commitment to building a domestic semiconductor ecosystem.
But there are hurdles. Building and running fabs require reliable electricity and water—commodities that are sometimes in short supply in India. Semiconductor plants, especially fabs, are notorious for their appetite for ultra-pure water and round-the-clock power. As Finshots points out, “Utilities must meet stringent 24/7 process specifications, and the current dependence on imports for tools and substrates can slow down production ramps.”
So, India’s strategy is to walk before it runs. By focusing on OSAT and mature-node manufacturing, the country can build expertise in the latter stages of the supply chain, then gradually move toward wafer fabrication and even chip design. The goal is to move quickly into higher-value segments within OSAT, such as wafer-level packaging, fan-out technology, and heterogeneous integration—areas that require airtight intellectual property protection, a stable policy environment, and long-term customer commitments.
The government’s ambitions are clear. In 2021, it launched the ₹76,000-crore Semicon India Programme, a sweeping initiative designed to attract global chipmakers, set up fabs and packaging units, and nurture a local supply chain. This year, the pace has quickened: in August 2025 alone, four new semiconductor projects worth ₹4,600 crore were approved across Odisha, Andhra Pradesh, and Punjab. That brings the India Semiconductor Mission’s tally to 10 projects in six states, with combined investments of ₹1.6 lakh crore.
Prime Minister Narendra Modi, in his Independence Day address on August 15, 2025, doubled down on the vision, declaring, “Made-in-India semiconductor chips will be available in the market by the end of this year.” It’s a bold promise, but one that reflects just how far the country has come. Already, six semiconductor plants have been approved, marking a significant milestone in India’s technological journey.
India’s approach is reminiscent of the early days of Taiwan and South Korea’s semiconductor odysseys back in the 1970s and 1990s. Those countries started with mature nodes and system integration, steadily climbing the value chain until they became global powerhouses. Experts now see India following a similar path, with a rapidly evolving role in system integration—excelling at integrating semiconductor components into advanced systems for automotive, consumer, telecom, and medical industries.
There’s another factor working in India’s favor: the global “China +1” strategy. As companies seek to diversify their supply chains and reduce their dependence on China, India is increasingly viewed as a reliable, cost-effective alternative. This trend is expected to help India capture a bigger slice of the global semiconductor pie.
Of course, challenges remain. India must ensure airtight intellectual property protections, cultivate a predictable policy environment, and convince global customers to sign on for the long haul. The competition is fierce—established OSAT hubs like Taiwan, Malaysia, and the US won’t cede ground easily. But with the right execution, India could become indispensable to the world’s chipmakers. As Finshots sums up, “India can become a global hub for chip packaging even before it produces wafers competitively.”
The next few years will be critical. If India can lock in marquee customers, build a robust vendor ecosystem, and upgrade its talent pool—perhaps through joint programs with global toolmakers—it could leapfrog into a position of real influence. The upside isn’t just economic value, but resilience and national security as well. For now, the world is watching to see if India can deliver on its promise—and rewrite the rules of the global semiconductor game.
