- The NITI Aayog roadmap targets a $120-$150 billion semiconductor value chain for India by 2035.
- Micron Technology’s $2.75 billion facility in Sanand began commercial chip production in March 2026.
- India’s stock market dropped to seventh globally, exposing its limited capture of core chip supply chain value.
India’s stock market has not kept pace with the AI-driven rallies in Taiwan and South Korea, where semiconductor demand has significantly boosted valuations.
exists as a named entity and that the cited “Future of India’s Semiconductor Industry” roadmap is a real, published document –> “Future of India’s Semiconductor Industry” roadmap sets out how the country plans to close it.
Ambitious Government Policy and Investment
The India Semiconductor Mission (ISM) is the policy backbone here. The Union Budget 2026-27 announced ISM 2.0, allocating ₹1,000 crore for the fiscal year, shifting the programme’s focus from standing up the ecosystem to deepening it. The second phase targets domestic production of semiconductor equipment and materials, full-stack Indian semiconductor IP, and stronger local and global supply chains.
The NITI Aayog roadmap puts projected state capital expenditure at roughly $45-$60 billion over a decade, prioritising projects with lower risk and clearer returns for investors. Subsidies of up to 50% are available for semiconductor fabrication units, according to the roadmap.
Expanding Assembly and Packaging Capabilities
The most tangible progress so far is in Assembly, Test, Marking and Packaging, ATMP in industry shorthand. Micron Technology‘s $2.75 billion plant in Sanand, Gujarat began commercial production in March 2026, making it India’s first commercial chip production site. The facility converts advanced DRAM and NAND wafers into finished memory and storage products. Micron plans to scale to hundreds of millions of chips annually by 2027 and has flagged high-bandwidth memory (HBM) as a future target, the memory architecture that AI accelerators depend on most.
Tata Electronics‘ ₹27,000 crore ATMP facility in Jagiroad, Assam is expected to begin production within the current financial year. That plant is designed to produce up to 48 million chips per day, covering automotive, electric vehicle and telecom applications. Together, these two facilities give India real supply chain presence rather than just policy ambition.
Strategic Leap into Fabrication
ATMP gets India into the supply chain. Front-end fabrication is what would make India genuinely sovereign in chips, and that gap is much harder to close.
The Tata Electronics partnership with ASML for a 300mm commercial fab in Dholera, Gujarat is the most significant move in that direction. The memorandum of understanding, signed in May 2026, involves an $11 billion investment by Tata Electronics, with ASML supplying lithography tools and supporting the facility’s ramp-up. The Dholera fab is planned to start at 28nm nodes, with 14nm cited as a future possibility. Both nodes are trailing-edge by current standards, leading AI accelerators are built on 3nm and 4nm processesbut establishing a domestic foundry at any node is a prerequisite for moving up the curve.
Tata Electronics has also signed a technology transfer agreement with Taiwan’s Powerchip Semiconductor Manufacturing Corporation (PSMC), bringing in manufacturing process knowledge alongside the ASML hardware.
AI Chip Design and the Startup Layer
India’s real semiconductor strength has always been design. Global chip firms including Intel, Qualcomm and Texas Instruments all run significant R&D
One concrete example: Indian startup Netrasemi is preparing to begin mass production of its A2000 edge AI processor. Built on TSMC’s 12nm process, the A2000 targets real-time video analytics for surveillance cameras and robotics, the kind of edge inference workload that doesn’t require the latest process node but does require purpose-built silicon.
Design Linked Incentive (DLI) are meant to encourage more of this. The question is whether India can go from producing design IP to owning the manufacturing of its own designs domestically, a much longer leap.
Talent and International Partnerships
None of the fabrication ambition works without the workforce to run it. ISM 2.0 includes skill development programmes aimed at building semiconductor manufacturing talent, and the Tata-ASML partnership explicitly covers domestic talent development and research collaboration.
On the geopolitical side, India has deepened technology partnerships with the US, Japan and the EU. The US-India Roadmap on Accelerating AI Infrastructure addresses financing, infrastructure and connectivity constraints for large-scale US-origin AI data centres in India. That initiative sits at the intersection of chip infrastructure and AI deployment, for India, access to US-origin compute at scale matters as much as building domestic fabrication capacity. The two tracks are complementary, not competing.
India has the policy framework, the early manufacturing capacity and the design talent. What it lacks, domestic leading-edge fabrication, a position in the HBM supply chain, and proven volume at scale, is exactly what the current roadmap is trying to build. Whether the Dholera fab reaches production on schedule and whether Micron’s HBM ambitions materialise in India will be the real tests of whether this strategy moves from document to infrastructure. For more coverage of AI chips and infrastructure, visit our AI Hardware section.
