India’s long and winding journey toward becoming a global semiconductor powerhouse is finally reaching a turning point. On August 15, 2025, Prime Minister Narendra Modi took the stage at the Red Fort, announcing, “We are working in mission mode in the semiconductor sector. Made-in-India chips will hit markets by the end of this year.” His words, delivered on the nation’s 12th Independence Day under his leadership, underscored a technological ambition decades in the making—and one that’s seen more than its share of setbacks and fresh starts.
For many, it’s a revelation that India once enjoyed a head start in chip manufacturing. Back in 1984, the Semi-Conductor Laboratory (SCL) in Mohali, Punjab, began operations—a full three years before Taiwan’s now-dominant TSMC opened its doors. This 51-acre facility was envisioned as the launchpad for indigenous chip fabrication and research, a bold move at a time when few countries had the technical wherewithal to produce semiconductors. According to The Economic Times, the SCL produced chips for government use, particularly in space and defense, and operated with limited capacity. But a mysterious fire in 1989 devastated the Mohali plant, derailing India’s early ambitions and forcing a nearly decade-long hiatus. To this day, there’s no clear answer as to whether the blaze was an accident or sabotage.
By the time SCL restarted in 1997, the global chip industry had raced ahead. While SCL, with help from Israel’s Tower Semiconductors in 2010, managed to manufacture 180-nanometer chips, the world’s leading fabs were already producing chips at sub-10-nanometer scales. SCL’s output remained confined to strategic sectors, its capacity utilization languishing around 10%—a far cry from the roaring success of TSMC, which now claims more than half the world’s chip production and reported $60 billion in 2022 revenue (compared to SCL’s meager $5 million).
The reasons for SCL’s stagnation are familiar in the annals of Indian public sector enterprises: insufficient investment, lack of industry partnerships, frequent management changes, and chronic underutilization. Over the years, SCL moved from the Department of Electronics to the Department of Space, and in 2022, to the Ministry of Electronics and Information Technology (MeitY). Innovation, experts say, would have demanded vast capital and close collaboration with global leaders—neither of which materialized in time.
Yet, the tide is turning. The government has earmarked about $1 billion for modernizing the Mohali facility as part of a $10 billion semiconductor incentive package. According to The Economic Times, nine bids—including proposals from the Tata Group and Tower Semiconductor—are in the running to overhaul SCL. The modernization aims to bring the plant up to legacy technology nodes of 65 and 40 nanometers before aspiring to more advanced nodes, finally giving the facility a shot at relevance in the global market.
India’s renewed urgency is driven by more than nostalgia or pride. Chips are now the lifeblood of modern economies, powering everything from smartphones and credit cards to missiles and cars. The COVID-era chip shortages and ongoing geopolitical tensions—especially China’s threats toward Taiwan—have laid bare the vulnerabilities of global supply chains. India, with its vast pool of engineering talent and growing domestic market, is determined to seize this moment.
On August 13, 2025, just days before Modi’s speech, the Union Cabinet approved four new semiconductor projects worth Rs 4,600 crore under the India Semiconductor Mission (ISM). These projects are slated for Odisha, Punjab, and Andhra Pradesh, and are expected to create over 2,000 skilled jobs directly, with many more to follow indirectly. This brings the total number of approved chip manufacturing facilities in India to 10, with projected investments of about Rs 1.6 lakh crore spread across six states, according to News18.
Among the newly approved projects, SicSem Private Limited is partnering with the UK’s Class-SiC Wafer Fab Ltd to manufacture silicon carbide devices in Bhubaneshwar, Odisha—marking the country’s first commercial compound semiconductor fabrication facility. 3D Glass Solutions will set up an advanced packaging and embedding glass substrate unit, also in Bhubaneshwar. In Andhra Pradesh, a semiconductor manufacturing unit catering to mobile phones and automobiles will be established in collaboration with South Korea-based Advanced System in Package Technologies (ASIP). Punjab’s Mohali will see the expansion of Continental Device India Private Limited’s (CDIL) facility, which plans to produce high-power devices such as MOSFETs, IGBTs, and Schottky diodes at a scale of over 158 million units annually.
The government’s approach isn’t just about fabrication. The Design Linked Incentive (DLI) scheme, rolled out after the 2021 Production Linked Incentive (PLI) scheme, provides subsidies for domestic chip design—a nod to India’s strength in engineering and software. According to a government press release cited by The Print, these manufacturing efforts will “complement the growing world class chip design capabilities coming up in the country which are propelled by design infrastructure support provided by the Government to 278 academic institutions and 72 start-ups.”
India’s ambitions are further reflected in its plans to host the fourth edition of Semicon India 2025 in New Delhi later this year. The event will feature international pavilions from Japan, South Korea, Malaysia, and 15 other countries, signaling India’s intent to become a serious player in the global semiconductor ecosystem.
Of course, the road ahead isn’t without obstacles. As The Print points out, fabrication facilities are expensive and slow to turn a profit, often requiring multiple rounds of government subsidies. Intellectual property rights remain another hurdle—India holds fewer domestic chip patents compared to China, making indigenous innovation a challenge. Policy experts stress the need for strong industry-academia partnerships and a long-term vision to foster research and development.
The India Semiconductor Mission (ISM), approved in December 2021, is the centerpiece of this push. With an outlay of Rs 76,000 crore, ISM supports investment in semiconductor fabrication, display manufacturing, and chip design. It operates as an independent business division within Digital India Corporation, with administrative and financial autonomy to “formulate and drive India’s long term strategies for developing semiconductors and display manufacturing facilities and semiconductor design ecosystem,” as News18 reports.
India’s chip market is projected to swell to $100 billion by 2030. The country’s ability to leverage its rich reserves of chemicals, minerals, and gases, coupled with a robust talent pool, could make it a vital contributor to the global supply chain. The government’s multi-pronged strategy—spanning fabrication, assembly, design, and packaging—aims to capture the full semiconductor value chain, reducing dependency on imports and boosting technological self-reliance.
As Prime Minister Modi put it, “The 21st century is technology-driven, and nations that excel in technology have achieved remarkable success.” For India, the first domestically produced chip hitting the market by year’s end won’t just be a technological milestone. It will be a testament to resilience, a rekindling of old ambitions, and, perhaps, the beginning of a new chapter in the global chip race.
