India accelerates semiconductor ambitions with focus on talent and foreign partnerships

India’s semiconductor strategy shifts from subsidies to building domestic engineering expertise and forging international collaborations, with the launch of its first full-front wafer fab amid logistical and technical challenges.

India’s semiconductor campaign is moving beyond subsidy-backed factory announcements towards a harder question: whether the country can supply the engineers, researchers and equipment ecosystem needed to keep a chip industry running. Reporting by the South China Morning Post says the second phase of the India Semiconductor Mission carries a budget of about US$13 billion and widens support from basic industrial set-up to the full chain from design to manufacturing, with manpower development pushed to the centre of policy. (scmp.com)

That change reflects lessons from the pandemic, when chip shortages exposed how much of the world’s supply depended on a narrow group of East Asian production hubs. The SCMP said Japan and Singapore are also outlining multibillion-dollar plans, while Tom’s Hardware noted that India still has no front-end wafer fabrication capacity of its own, making the hunt for design and process talent as important as the buildings themselves. (scmp.com)

India is no longer starting from zero. The SCMP reported that 12 semiconductor manufacturing projects have been cleared across six states, and that Micron, Kaynes Semicon and CG Semi have begun commercial production this year. However, those plants are chiefly focused on assembly, testing and packaging, leaving Dholera in Gujarat as the crucial test of whether India can graduate from back-end work to wafer fabrication. (scmp.com)

That is why Tata Electronics’ agreement with ASML matters. Hindustan Times reported that the pact was signed in the presence of Narendra Modi and Dutch Prime Minister Rob Jetten during the Netherlands leg of Modi’s five-nation tour. India’s Press Information Bureau said both leaders welcomed the tie-up for what it described as India’s first front-end semiconductor fab in Gujarat, while the companies’ joint statement said ASML would help establish and ramp up Tata’s 300mm facility in Dholera. (hindustantimes.com)

The technical scope is substantial. Tom’s Hardware reported that Taiwan’s Powerchip Semiconductor Manufacturing Corporation is licensing the process technology for nodes from 28nm to 110nm and is also helping with design and construction under a 2024 definitive agreement with Tata Electronics. At full capacity, the Dholera plant is designed for 50,000 wafers a month and a product mix including power-management chips, display drivers, microcontrollers and high-performance computing logic for automotive, mobile, AI and communications uses. (tomshardware.com)

Execution, however, remains the central challenge. Tom’s Hardware said civil construction at Dholera was roughly 50% complete last month and that the scheme had to be redesigned after soil tests found the site too soft and saline for the original plan, although trial production was still being targeted for later in 2026. The same report said New Delhi is covering 50% of eligible project costs through the India Semiconductor Mission, while Gujarat is adding local incentives. The site, whose foundation stone ceremony took place on 13 March 2024, is therefore both a factory project and a state-backed industrial experiment. (tomshardware.com)

The ASML deal also shows how heavily India is relying on foreign partnerships to build domestic capability. Reuters quoted ASML chief executive Christophe Fouquet as saying: “India’s rapidly expanding semiconductor sector represents many compelling opportunities, and we are committed to establishing long-term partnerships in the region.” The Economic Times said the collaboration covers advanced lithography tools, training for local talent, lithography-focused skill development and research infrastructure. It also reported Tata chief executive Randhir Thakur saying the partnership would help “create a resilient and trusted supply chain for our global customers” and “develop talent locally”. ET added that Tata has already assembled a broader partner network including PSMC, Tokyo Electron, Rohm, Merck and Intel. (indianexpress.com)

Some of the numbers around India’s chip build-out are still fluid. Reuters said the country had eight semiconductor projects under way and referred to a $14 billion Tata Electronics facility in Gujarat, whereas Tata Electronics, the Economic Times and Tom’s Hardware described the Dholera fab itself as a $11 billion investment. That discrepancy underlines how fast-moving the sector remains. The official Indian line, set out by the Press Information Bureau, is that the ASML-Tata alliance is an important step in building a national semiconductor ecosystem. Whether the wider strategy succeeds may depend less on the volume of announcements than on India’s ability to convert its engineering base into sustained design, process and manufacturing expertise – the shift the SCMP summed up as moving from “Make in India” towards “Engineer in India”. (indianexpress.com)