Fabbing India into a Global Semiconductor Superpower
In the heart of New Delhi, a 30cm silicon wafer hangs on the wall of Electronics and IT Minister Ashwini Vaishnaw’s office — a gleaming symbol of India’s boldest technological ambition yet: to manufacture the world’s most advanced microchips entirely on home soil.
These chips, built with circuits measured in nanometers, are among the most complex objects ever created — and, alongside oil, rank among the most valuable traded goods in the world. Prime Minister Narendra Modi has made their production a cornerstone of his vision to propel India into the top tier of global technology manufacturing.
Dholera: The Future “Semicon City”
The epicenter of this vision is Dholera, a barren expanse in Gujarat the size of Singapore. Now in the early stages of transformation, it boasts ruler-straight roads, new power plants, diverted river canals, and the footprint of a massive international airport — yet remains largely empty, awaiting industry.
The government is offering unprecedented subsidies — covering 50% to 70% of project costs — to attract global and domestic chipmakers. In July, Vedanta Group chairman Anil Agarwal promised “Made-in-India chips” by 2025. Leading the charge is David Reed, a veteran of Texas Instruments and other global chip giants, tasked with building India’s first advanced semiconductor foundry from scratch.
A Herculean Challenge
While India’s tech hubs like Bengaluru are global leaders in chip design, the country has no track record in chip fabrication. Unlike smartphone assembly — where India now ranks second only to China thanks to Modi’s production-linked incentives — semiconductor manufacturing demands ultra-specialised engineers, precision infrastructure, and years of trial and error.
Reed’s mission includes recruiting 300 foreign specialists from East Asia and Europe, lured with triple their current salaries, and pairing them with an equal number of Indian engineers. But persuading global experts to relocate to rural Gujarat, with limited housing, schools, and leisure facilities, remains a challenge.
Still, India’s 1.4 million annual engineering graduates — many of world-class calibre — provide a strong talent pool, especially as Taiwan faces a shortage of new chip engineers.
Beyond the Moonshot
Critics warn that Vedanta’s 2025 target is highly ambitious, if not unrealistic. But even if full-scale fabrication proves elusive, India is well-positioned to expand its role in the global chip supply chain.
A Plan B is already taking shape: U.S.-based Micron Technology is investing $2.7 billion in a Gujarat facility for ATMP — assembly, testing, marking, and packaging — processes essential to modern chip performance. This could help India capture market share from Malaysia while strengthening its position in design.
State Capitalism for Tech Sovereignty
India’s semiconductor strategy blends tariffs, subsidies, and industrial policy — echoing not just China’s state-led capitalism, but also the U.S. and other major economies now racing to secure chip sovereignty.
Whether Modi’s moonshot results in full-fledged chip fabs or a dominant niche in the semiconductor ecosystem, one thing is certain: the scale of ambition is enormous — and it signals India’s intent to compete head-to-head in the technology race shaping the 21st century.
