With the beginning of 2026, the global perception of India has undergone a fundamental shift, with the country emerging as a frontrunner in the global semiconductor hardware segment. As of March 2026, India is no longer just designing the world’s silicon chips; it is fabricating, packaging and shipping them to the global market. This has been enabled by immense policy support through the India Semiconductor Mission (ISM), a $10 billion worth government incentive package, which has now evolved to ISM 2.0, along with increased efforts by private players.
Private players step up investments
A significant operational milestone was achieved on February 28, 2026, with the official inauguration of Micron Technology’s $2.75 billion worth (Rs 225.16 billion) assembly, testing, marking and packaging facility in Sanand, Gujarat. The facility was developed at an unprecedented speed, transitioning from an MoU to full-scale commercial production in approximately 900 days.
The Micron plant, featuring over 500,000 square feet of cleanroom space, is the anchor of the Sanand semiconductor cluster. This facility transforms advanced DRAM and NAND wafers from Micron’s global network into finished storage products, serving as a critical buffer for global supply chains. In March 2026, the facility achieved its first major commercial milestone with the shipment of the first Made-in-India memory modules to Dell Technologies and HP for use in locally manufactured laptops and servers. By the end of 2026, Micron expects to assemble and test over tens of millions of chips in the country, scaling to hundreds of millions by 2027.
While Micron leads in packaging, the Tata Group has emerged as the vanguard of India’s indigenous fabrication and high-volume testing ambitions. Tata Electronics, in partnership with Taiwan’s PSMC, is currently working on the most ambitious construction project in the country’s industrial history – the Rs 910 billion ($11 billion) megafab facility in the Dholera special investment region.
As of March 2026, civil infrastructure for the Dholera fab unit has reached the 50 per cent completion mark. This artificial intelligence (AI)-enabled megafab is on track to begin initial chip production by late 2026, targeting the 28nm node, with plans to migrate to 22nm. These nodes are essential for automotive sensors, power management systems, and the burgeoning internet of things market. The facility is designed for a massive capacity of 50,000 wafer starts per month, deploying data analytics and machine learning to achieve industry-best efficiency.
Simultaneously, the group has expanded its footprint to the Northeast. To this end, the Jagiroad facility in Assam, a Rs 270 billion investment, is currently undergoing final equipment calibration. The site is poised to become one of the world’s largest greenfield outsourced semiconductor assembly and test (OSAT) plants. Expected to be commissioned by April 2026, it will produce 48 million chips per day, creating over 25,000 jobs and positioning Assam as a high-tech manufacturing hub. This decentralisation of the tech industry away from the western coast is a strategic move to build a pan-India semiconductor talent pool.
Increased consortium play
Another critical player in building a solid semiconductor ecosystem in India is the consortium led by CG Power and Industrial Solutions (part of the Murugappa Group), in partnership with Japan’s Renesas Electronics and Thailand’s Star Microelectronics.
Their facility in Sanand, known as CG Semi, successfully launched its first unit (G1) in August 2025. By March 2026, the plant has ramped up its production of automotive-grade microcontrollers and power modules. Unlike the memory focus of Micron, this venture targets the specialised electronics required for the global electric vehicle market. Their G2 expansion is already under construction nearby, aimed at reaching a capacity of 14.5 million units per day by the end of 2026. This localised production has been a boon for Indian electric vehicle manufacturers, who can now bypass the long lead times of global imports.
New entrants diversifying the market
The landscape has grown even more diverse with the entry of homegrown players like Kaynes Semicon. The government is scheduled to inaugurate Kaynes’ new OSAT plant in Sanand on March 31, 2026. With an investment of Rs 33 billion, this plant is designed to roll out 6 million chips daily. Kaynes’ success is particularly notable because it represents a successful example of how an Indian electronics manufacturing services company has transitioned from printed circuit board assembly to advanced semiconductor packaging. The company’s focus on niche, high-reliability chips for medical electronics and aerospace has helped establish a highly profitable and strategically vital segment of the ecosystem.
Scaling up chip design and indigenous IP
While the physical factories have witnessed growth, India’s strength in chip design has also scaled up to unprecedented heights in the past year. Global design players like Intel, Qualcomm, NVIDIA, AMD and Marvell have moved beyond simply using India as a support hub. As per industry reports, nearly 20 per cent of the world’s integrated circuit (IC) design workforce is located in India.
Another notable development has been the rise of indigenous intellectual property (IP) in the semiconductor space. In late 2025, the Centre for Development of Advanced Computing launched DHRUV64, India’s first homegrown 1.0 GHz, 64-bit dual-core microprocessor. Built on the open-source RISC-V architecture, DHRUV64 represents a major step toward technological sovereignty. As of March 2026, this chip is being integrated into domestic smart meters and industrial controllers. In particular, the use of RISC-V is a strategic move, which would allow Indian start-ups to design chips without paying the exorbitant licensing fees associated with proprietary architectures. Following the success of DHRUV64, next-generation Dhanush processors are already under development, targeting higher clock speeds and AI-edge capabilities.
Policy impetus driving momentum
The driving force behind this momentum is the ISM 2.0, announced in Union Budget 2026. While Phase I focused on attracting global giants and laying the foundational bricks, ISM 2.0 is about building the entire ecosystem’s depth and ensuring technological sovereignty. Its focus includes:
Subsidising localised chemicals and gases: Recognising that a fab is useless without ultra-pure inputs, the government now provides significant subsidies for the local production of photoresists, specialised gases and high-purity chemicals. This has attracted companies like Air Liquide and Linde to set up dedicated purification plants adjacent to the Dholera and Sanand clusters.
New incentives for equipment manufacturing: New incentives have been introduced to attract players like Applied Materials and Lam Research to manufacture semiconductor equipment parts within India. This ensures that the long-term maintenance and scaling of fabs are not entirely dependent on foreign imports.
Transforming legacy centres: The government has also committed Rs 80 billion to upgrade the semiconductor laboratory in Mohali, transforming it from a legacy centre into a 180nm/90nm pilot fab for strategic defence and academic research.
India leveraging geopolitical dynamics
Another key factor driving the rapid growth of the semiconductor ecosystem in 2025-26 is India’s advantageous position in the global geopolitical context. As the “China Plus One” strategy matured, India positioned itself as the only democratic partner capable of offering the scale of both a massive domestic market and a vast talent pool for semiconductor players. Additionally, strategic partnerships under the Initiative on Critical and Emerging Technology with the US have paved the way for technology transfers. Therefore, India is increasingly being seen as a trusted geography for the semiconductor supply chain, providing a hedge against regional instabilities.
Tapping talent and developing workforce
India has also launched a massive workforce training initiative to sustain this growth. Through partnerships with universities and specialised institutes like Namtech and Micron are training thousands of engineers in advanced manufacturing roles. The design-linked incentive scheme now supports 24 semiconductor design start-ups, which have attracted nearly Rs 4.30 billion in venture capital as of January 2026. This focus on transitioning education to employment ensures that the 10 approved semiconductor projects, representing a cumulative investment of over Rs 1.6 trillion, have the human capital required to operate at global standards.
Strengthening infrastructure backbone
Another critical factor responsible for the swift development of semiconductor hubs across the country has been the government’s initiatives to address logistical issues. Dholera, for instance, now has a dedicated multimodal logistics park and an international airport nearing completion. To meet the power requirements of the fabs, Gujarat has commissioned a dedicated 400 kV substation exclusively for the semiconductor park, backed by a massive solar-wind hybrid farm to ensure that the chips are green-certified. Water security, a major concern for high-volume manufacturing, has been addressed through the implementation of massive-scale desalination and tertiary water treatment plants that recycle up to 90 per cent of the water used in the cleanrooms.
The road ahead
Despite these positive developments, the road ahead to sub-7nm fabrication remains a long-term, multi-billion-dollar aspiration. While India has successfully navigated the path between policy announcement and plant inauguration, the narrative has now shifted from whether India can make chips to how fast it can scale. With the Dholera Fab expected to produce its first commercial wafer by late 2026, the country is no longer a spectator in the semiconductor race. It has become an active competitor.
Kuhu Singh
