India’s Position in Global Semiconductor Supply Chain 2026.
Semiconductors have become the backbone of human civilization due to their ability to compute. No other metal or non-metal has left such a deep impact as silicon. Without semiconductors, the moon landing would not have been possible, and the International Space Station could not have been imagined. Semiconductors are everywhere, doing computing for us. The importance of semiconductors will keep increasing as the demand for more and more computing increases. India with its 1.4 Billion population can play an important role in the Semiconductor journey.
Presently the Global Semiconductor Supply Chain is highly concentrated in a few countries and is tightly controlled by America. The total value of the Semiconductor Industry is valued at USD 681.05 billion in 2024 (Semiconductor Market Size, Share, Growth & Forecast [2032], n.d.) The semiconductor supply chain is very diverse and spread into many countries, especially in the USA, Europe and South East Asia.
Entire Semiconductor can be split into 10 majors parts, beginning from Raw Material to end products , each country having specialising in a particular domain.
| Step | Supply chain part | Main countries |
| 1 | Raw materials | China, Japan, USA |
| 2 | Wafer making | Japan, South Korea, Taiwan, Germany |
| 3 | Chip design | USA, United Kingdom, India |
| 4 | Design software | USA (almost dominant) |
| 5 | Fabrication | Taiwan, South Korea, USA, China |
| 6 | Equipment | Netherlands, Japan, USA |
| 7 | Packaging | Malaysia, Vietnam, China, Taiwan |
| 8 | Testing | Malaysia, Philippines, China |
| 9 | Integration | China, India, Vietnam |
| 10 | Final products | China, USA, Japan, South Korea, Germany |
Technological Assessment of Indian Semiconductor Industry.
The value of each component varies widely, for example Raw material constitutes only 2-3 % of the supply chain, whereas Chip design and Fabrication value vary from 30-35 %. (OECD, 2025). Presently India has a good presence in Chip designing but its share in other parts of the supply chain is minimal. The recently announced Semiconductor mission mainly focused on Packaging with exception to Tata Semiconductor Plant at Dholera and SiCSem in Bhubaneswar, Odisha that will do fabrication in India.(Powering the Future, n.d.) .
Chips Fabrication and India
Further it is important to highlight that the Tata Semiconductor plant of Dholera will produce 28 Nm chips that are based on roughly a decade old technology, however 28nm chips are still widely used in the Electronics industry, nearly two third of all global chips belong to these mature 28 nm chips. Modern Electronics vehicles, Defence industry, medical equipment etc all used these mature chips. These chips are stable and can tolerate high heat. Technologically these Chips are manufactured from old DUV machines. Presently China produce large chunk of these Chips and Indian companies will directly compete low cost Chinese chips
High end chips such as 6nm to 2nm are used in Mobile Phones and Laptop. For a country like India this mature 28nm node is believed to be the right place to occupy. Once India gets sufficient experience in manufacturing it can climb the next ladder. For manufacturing these advanced chip advanced EUV machines are required. China is aggressively trying to master this technology, China is able to produce 5nm chips with old DUV machines with multiple patterning and etching to replicate the precision required for advanced chips. However these chips are more costly than chips made from advanced EUV machines.
Chips Packaging and India
Packaging is where India is making a strong entry, it is less technology and capital intensive than fabrication. However, India can find strong challenges from other countries like Thailand, Malaysia, Indonesia and Vietnam etc, who are also pursuing the fabrication of Dream. Thailand has launched a 25 years plan to target Power, Sensors, Photonics, Analog, and Discrete chips, Vietnam will also open its first fabrication factory in 2026, Malaysia is also has 13% share of Packaging and is now focusing in chips designing, Indonesia has taken different approach it is focusing on basic Rare earth extraction and sending it China for further processing.
However, given the scale of local Research and Development, cheap and skilled labor force and vast market size, India can easily dominate this part of the supply chain in near future.
Chips Design and India
In Chip design India is the dominant player with roughly 20 % of Global chip designers are India based, however India is still designing low end chips . Designing constitutes around 30-35 % of chips total value. This is the section of the supply chain India can easily master and outpaced other countries. India has a good ecosystem of software companies , a large base of MSME and a vast pool of workers. Govt of India has launched the Design linked Incentive Scheme in 2021, India is aggressively targeting the Design of Advance chips such as 2 Nm. But here India is again dependent on basic software tools imported from foreign countries mainly from the USA.
Ultra Pure Chemicals and India
Chemicals are often ignored but around 500 chemicals are used in the semiconductor Industry. These chemicals are harder to manufacture than normal chemicals. India has almost no manufacturing base for ultra pure chemicals, given the fact that India’s chemical industry is 6th largest in world.(FOUNDATION, n.d.) India still has very minimal presence in it, with sufficient policy support India can make entry into it. Presently Chemicals are outside of the Semiconductor Mission. Chemicals are required in almost every part of the semiconductor journey. If India’s Fabrication industry rises, it will lead to further import of Chemicals from other countries of China, thus India will never achieve true tech sovereignty.
Chips Integration and India
India has shifted from “screw-driver assembly” to deep Integration, moving beyond just putting parts together to manufacturing the “guts” of electronics. Currently India is now manufacturing complex 10-layer PCBs, capacitors, and connectors locally. India is now a global importance for PCBA, with companies like Dixon Technologies and Foxconn leading the integration of chips onto motherboards for global giants. The government aims to localize 16 key intermediate products by the end of 2026 to reduce dependency on China. Companies like Dixon TechnologiesLeading the integration for smartphones, laptops, and home appliances. HCL-Foxconn JV mainly Focused on specialized integration for display drivers and automotive electronics. Kaynes Technology specializes in high-precision integration for aerospace and defense.
End Products and India
India has emerged as one of the world’s largest manufacturing hubs for finished electronic goods, transitioning from a domestic consumer to a global exporter. India is the world’s 2nd largest producer of mobile phones. Presently 99% of phones sold in India are now locally made, and exports (led by Apple and Samsung) have crossed $15 Billion. Under the PLI 2.0 scheme, global giants like HP, Dell, Lenovo, and Acer have established local manufacturing lines for laptops and tablets. However, the supply chain produces a good number of jobs but it is less technology and value intensive.
Conclusion
India has a strong position in some areas such as designing and end products. Packaging and integration of chips can be mastered within a decade. In Chemicals India required policy support to mature its industry.However challenges remain in Raw material availability, Processing, Availability of advance machinery and equipment , Chips designing software and advance fabrication.
India can master extraction of Rawmaterial and its processing of its own,again Govt needs to support it. As far as equipment is concerned India can choose a part of the Secondary supply chain of equipment and need active collaboration with advanced economies. Similarly once India faster fabrication of mature nodes it can move to advance chips but it again required strong partnership with USA.
Important Links
FOUNDATION, O. R. (n.d.). Harnessing India’s chemical expertise for semiconductor ecosystem development. Orfonline.Org. Retrieved January 11, 2026, from https://www.orfonline.org/expert-speak/harnessing-india-s-chemical-expertise-for-semiconductor-ecosystem-development
India’s Semiconductor Vision Gathers Momentum with 3nm Chip Design and Large-Scale Talent Development Initiatives. (n.d.). Retrieved January 11, 2026, from https://www.pib.gov.in/www.pib.gov.in/Pressreleaseshare.aspx?PRID=2148393
OECD. (2025). Mapping the semiconductor value chain: Working towards identifying dependencies and vulnerabilities (182nd ed., OECD Science, Technology and Industry Policy Papers) [OECD Science, Technology and Industry Policy Papers]. https://doi.org/10.1787/4154cdbf-en
Powering the Future: The Semiconductor and AI Revolution. (n.d.). Retrieved January 11, 2026, from https://pib.gov.in/FactsheetDetails.aspx?Id=149242
Semiconductor Market Size, Share, Growth & Forecast [2032]. (n.d.). Retrieved January 11, 2026, from https://www.fortunebusinessinsights.com/semiconductor-market-102365
