India Launches Semiconductor Mission 2.0 to Build Domestic Chip Ecosystem
The Finance Minister has officially announced the launch of India Semiconductor Mission 2.0, a strategic initiative aimed at accelerating the development of domestic capabilities in the critical semiconductor equipment, chemicals, and gases market. According to industry bodies India Electronics and Semiconductor Association (IESA) and SEMI India, this market is projected to reach an estimated $400 billion by 2030, presenting a massive economic opportunity for the country.
Global AI Demand Creates Supply Bottlenecks and Opportunities
This announcement comes at a pivotal moment, as global supply bottlenecks intensify due to the surging demand for artificial intelligence (AI) workloads. The rapid expansion of AI technologies is driving significant capital expenditure and shifting specific equipment resources toward high-bandwidth memory and advanced DRAM for both training and inference processes. This shift is straining global original equipment manufacturers (OEMs), creating what experts describe as a rare window of opportunity for India to establish a robust semiconductor ecosystem.
Industry veterans emphasize that India can leverage this situation by encouraging global players to source more components from Indian micro, small, and medium enterprises (MSMEs), while simultaneously nurturing domestic champions for long-term growth. Raja Manickam, founder and CEO of fabless startup iVP Semi, highlighted the importance of incentives in the initial phases. "The demand for new wafer fabs is extremely high because of AI," he stated, underscoring the need for policies that attract global OEMs to increase their procurement from India.
Strategic Focus on Export Markets and Competitive Segments
Experts caution that while the timing may be favorable, success hinges on sustained AI demand. Sanjay Kumar, Vice President at AT-Kearney and former senior director at the US Department of Commerce's CHIPS Program office, noted that "Indian internal consumption is not going to match major hubs like Taiwan and Korea, so production should target export markets, which only global OEMs are able to qualify for." This insight points to the necessity of aligning India's semiconductor strategy with international standards and export-oriented manufacturing.
Looking ahead, industry leaders outline a phased approach to building competitive strength. Ashok Chandak, President of IESA and SEMI India, projected that within 5-7 years, India could develop expertise in low to mid-complexity segments. These include:
- Sub-fab equipment vacuum systems
- Automation systems for wafer handling
- Precision mechanics
- Advanced packaging equipment
By focusing on these areas, India aims to carve out a significant niche in the global semiconductor supply chain, reducing dependency on imports and enhancing technological self-reliance.
