For decades, India’s position in the semiconductor industry was defined by a clear contrast. Indian engineers contributed to the design of sophisticated chips, but the country remained heavily dependent on overseas facilities for manufacturing, packaging and testing. That gap is now beginning to narrow.
Since the launch of the India Semiconductor Mission in 2021, India has moved from policy intent towards building semiconductor factories, developing supply chains, training skilled talent and commencing commercial production.
The next challenge, however, is larger than establishing individual plants. A semiconductor fabrication facility cannot succeed as an isolated unit. It requires continuous access to packaging and testing facilities, equipment maintenance, ultra-pure chemicals and gases, precision engineering, logistics, research institutions and skilled workers.
Bringing these capabilities closer together can reduce transportation and inventory costs, shorten lead times, improve coordination and lower execution risks. India therefore needs to focus on developing integrated semiconductor clusters, rather than standalone fabrication plants.
The Government of India has established the foundation through the Rs 76,000-crore Semicon India Programme, providing support for semiconductor fabrication, assembly, testing, packaging and chip design.
Twelve semiconductor projects have been approved across six states, with investment commitments exceeding Rs 1.64 lakh crore. These projects cover wafer fabrication, advanced packaging, memory assembly and testing, compound semiconductors and specialised technologies.
Projects in Assam, Gujarat, Odisha, Punjab, Uttar Pradesh and Andhra Pradesh are developing complementary capabilities. At the same time, support for semiconductor design companies, advanced tools, foundry access and academic collaboration is strengthening India’s innovation pipeline.
The principle of ‘Sand to Silicon to Systems’ should now guide this national effort. India’s advantage will emerge when raw materials and equipment support are seamlessly connected with chip design, fabrication, packaging, testing and finished electronics products.
Co-location can accelerate supplier qualification, enable shared infrastructure and allow manufacturers, start-ups and researchers to work together on production challenges. It can also help domestic MSMEs enter the semiconductor supply chain by locating close to anchor customers and gradually meeting global standards of quality and reliability.
Gujarat’s Emerging Semiconductor Cluster
Gujarat illustrates how this cluster-based approach can develop within the wider national mission. The state introduced India’s first dedicated semiconductor policy and established the Gujarat State Electronics Mission as a single-point facilitator.
It now accounts for six approved projects and investment commitments of more than Rs 1.24 lakh crore. More significant, however, is the emerging link between fabrication, packaging, infrastructure, suppliers and talent across Dholera, Sanand and Surat.
Sanand is developing as a major packaging cluster around facilities established by Micron Technology, Kaynes Semicon and CG Semi. According to the author, three major facilities in Gujarat commenced commercial production in 2026.
Their operations are expected to create sustained demand for equipment, specialty chemicals, industrial gases, cleanrooms, testing, logistics and precision engineering. This demand can attract suppliers, reduce dependence on distant service networks and create opportunities for Indian technology companies and MSMEs.
Dholera provides the fabrication anchor. Tata Electronics, in partnership with Taiwan’s Powerchip Semiconductor Manufacturing Corporation, is establishing India’s first commercial semiconductor fab there.
Its dual-grid power supply, assured water availability, treatment facilities, expressway connectivity, international airport and dedicated industrial zones highlight the infrastructure-intensive nature of semiconductor manufacturing.
Crystal Matrix’s compound-semiconductor and advanced-packaging project and Suchi Semicon’s facility in Surat further expand Gujarat’s technology base and potential supplier network.
Connecting Factories with Knowledge
Semiconductor clusters must also connect factories with knowledge and research institutions.
The packaging training centre at Pandit Deendayal Energy University, the ChipIN Extension Centre and the SAMARTH nanofabrication facility at IIT Gandhinagar can support industry-ready talent, research and process development.
At the national level, similar connections between anchor plants, universities, design centres and shared testing facilities will be essential for developing capabilities that extend beyond the initial investment incentives.
No country can build a complete semiconductor ecosystem entirely on its own. Global technology partnerships, capital and markets will remain important. India’s opportunity lies in combining these international partnerships with its large domestic market, engineering talent and established institutions.
From Projects to Clusters
SEMICON India 2026, under the theme ‘Silicon to Systems: Building the Ecosystem’, can help advance the shift from individual projects towards integrated clusters.
Gujarat provides an important demonstration of this approach, but the ambition is national: interconnected semiconductor clusters that reduce risk, deepen domestic value addition and strengthen India’s position as a global source of chips, technologies and systems.
Ultimately, the success of this effort can be measured through indicators such as lower lead times, faster supplier qualification and a growing share of semiconductor and electronics value being created within India.
The author is Mission Director, Gujarat State Electronics Mission.