India’s semiconductor mission moves from foundation to industry at scale

MUMBAI: India’s semiconductor story is moving from blueprint to production line, with the government saying the country has entered the next phase of building the industry at scale. Speaking at a fireside chat at SEMICON India 2026, Union Minister for Electronics and IT Ashwini Vaishnaw said the first phase of the India Semiconductor Mission (ISM) focused on establishing the foundation, while ISM 2.0 will build out a complete semiconductor ecosystem across six pillars design, materials and machines, more fabs, more ATMP units, R&D and talent.

Vaishnaw said ISM 1.0, originally designed as a six-year programme, achieved its objectives in four years. He said the government expects ISM 2.0 to similarly move ahead of schedule, backed by growing interest from investors.

The shift is already visible on the factory floor. Five semiconductor manufacturing plants in India have commenced commercial production, with chips being supplied to the domestic market as well as exported.

According to Vaishnaw, the ability to manufacture and export chips demonstrates that Indian facilities can compete on two fundamentals of the global semiconductor business cost and quality.

Demand, meanwhile, is giving manufacturers another reason to keep the machines running. Vaishnaw said several companies are expanding production rapidly, while a semiconductor fab scheduled for commissioning in 2028 already has a large portion of its capacity booked.

The minister also pointed to the inherently global nature of the industry, where components and finished products move across borders through interconnected supply chains. Building a competitive domestic ecosystem, therefore, is not about shutting the door on global trade but strengthening India’s position within it.

Design is expected to be one of the biggest engines of that ecosystem. Vaishnaw said India’s existing design capabilities, built through its IT industry and global capability centres, are increasingly spilling into semiconductors. Under ISM 2.0, he expects at least 200 chip design companies to emerge, which he described as a potential game changer for homegrown semiconductor intellectual property.

The first phase has already widened access to the tools needed to make that happen. More than 105 chip design startups have gained access to advanced Electronic Design Automation tools, while 20 startups have received venture capital funding.

The government is also looking to take precision manufacturing beyond electronics. Vaishnaw said India’s electronics manufacturing ecosystem has helped MSMEs build capabilities that now serve sectors including mobile manufacturing, aerospace, aviation, defence and semiconductors.

The next step, he said, is greater applied R&D within manufacturing plants, with a focus on improving both product quality and manufacturing processes.

That expansion will also need people who can operate increasingly specialised facilities. India initially set itself a target of training 85,000 design engineers over 10 years, but has already trained around 70,000 in four years.

Students from around 400 engineering colleges, including institutions in smaller cities, have gained access to industry-grade EDA tools. They are also getting opportunities to take designs through tape-out and move from an idea on a screen towards an actual product.

Under ISM 2.0, the skilling agenda is set to broaden from chip design to system design, with the aim of developing talent sought by the wider electronics and semiconductor industry.

The workforce requirement extends well beyond engineers. Demand for cleanroom technicians and maintenance personnel is also rising, with the government initially targeting one lakh technicians under ISM 2.0. Vaishnaw indicated that the target may need to be increased as industry requirements grow.

The semiconductor push is also increasingly intersecting with artificial intelligence. Vaishnaw highlighted the expanding ecosystem for AI servers and said major server manufacturers are showing interest in setting up production in India.

The wider ecosystem is gradually stretching from components and chips to finished products, laptops, servers and accessories. The government’s stated objective is to create enough depth across these layers to make growth more consistent rather than dependent on individual projects.

Trust and intellectual property protection are another part of the equation. Vaishnaw said India’s position as a trusted destination is helping attract global semiconductor and electronics companies, including companies that had previously not established operations outside their home countries.

The larger ambition is now moving towards a product-led semiconductor economy. Vaishnaw said some chips developed in India are already being used in strategic sectors, while others are being exported, with more Made-in-India and designed-in-India chips expected as the programme expands.

The export pipeline is already extending beyond chips themselves. ATMP units in India are exporting to Japan, while chips are being incorporated into products exported to the US and European markets, including Switzerland and Germany.

Against the backdrop of SEMICON India 2026, which features more than 600 participating companies, representatives from 52 countries, over 400 executives and more than 150 speakers, the message from the government is clear: India’s semiconductor programme is no longer only about building the foundation, it is now about scaling the ecosystem around it.