Prime Minister Narendra Modi's Independence Day speech placed semiconductors and critical minerals at the centre of India's industrial ambitions, highlighting the progress already made in chip manufacturing while outlining the next stage of the country's semiconductor push.
According to the information presented in the source, three semiconductor facilities in Sanand, Gujarat, have already begun commercial production, with their output being prepared for domestic use and exports. Another nine projects remain under development.
The developments mark an important step for India's semiconductor industry, although the country still has a considerable distance to cover before it can manufacture advanced chips at the leading edge of global technology.
Three Semiconductor Plants Are Already Operational
The three operational facilities highlighted in the speech are located in Sanand, Gujarat.
These facilities primarily operate in the assembly, testing and packaging segment rather than manufacturing semiconductor wafers from raw silicon.
The three facilities are:
Micron Technology
Micron's $2.75-billion facility was inaugurated in February.
The plant focuses on packaging and testing DRAM and NAND memory products used in applications ranging from smartphones to data centres.
According to the source, the facility has already started shipping products.
Kaynes Semicon
Kaynes Semicon's facility became commercially operational on March 31, around 14 months after construction began.
The company is working towards scaling production to approximately 6.3 million chips per day.
The rapid transition from construction to commercial production represents a significant milestone for India's semiconductor manufacturing ambitions.
CG Power
CG Power's semiconductor facility is being developed through a joint venture involving Renesas of Japan and Stars Microelectronics of Thailand.
The facility began commercial production on July 4 and is the newest of the three plants highlighted in the report.
These Plants Do Not Manufacture Chips From Scratch
An important distinction is necessary when discussing India's semiconductor progress.
The three facilities are primarily involved in OSAT — outsourced semiconductor assembly and testing — or ATMP, meaning assembly, testing, marking and packaging.
In simple terms, the silicon wafer is manufactured elsewhere. The Indian facility then cuts, connects, tests and packages the semiconductor so that it can ultimately be used as a finished component.
This is an important part of semiconductor manufacturing, but it is different from fabrication, where the actual transistor structures are created on silicon wafers.
Fabrication is substantially more capital-intensive and technically demanding.
Nine More Projects Are in the Pipeline
The India Semiconductor Mission's first phase currently includes 12 projects, according to the information cited in the source.
With three already in commercial production, nine projects remain in development.
One of the most significant is Tata Electronics' semiconductor fabrication facility at Dholera in Gujarat.
Unlike the packaging plants already operating in Sanand, the Tata project is intended to manufacture semiconductor wafers and is described as India's first genuine fabrication facility.
According to the source, Union IT Minister Ashwini Vaishnaw has indicated that the first chip from the facility could be produced by December.
Other projects in the pipeline include:
Tata Electronics' assembly and testing facility in Jagiroad, Assam
HCL-Foxconn's semiconductor packaging facility at Jewar
A silicon-carbide semiconductor facility in Odisha
Two additional packaging facilities approved in Gujarat
A newly approved semiconductor project in Rajasthan
The Prime Minister's projection that five to eight additional plants could become operational over the coming seven to eight years therefore covers a significant portion of these projects.
Why Semicon 2.0 Is More Important
India's next challenge is not simply to increase the number of semiconductor plants.
The country's newly approved Semicon 2.0 programme is designed to take the industry beyond packaging and mature-node manufacturing.
The first semiconductor mission was launched in 2021 with an allocation of ₹76,000 crore.
The programme helped establish the foundation for semiconductor assembly, testing and packaging while also supporting the development of India's first fabrication project.
Semicon 2.0, approved by the Cabinet in July, has an outlay of ₹1,27,500 crore.
Its objectives are considerably broader.
Moving Towards Advanced Semiconductor Technology
A major focus of Semicon 2.0 is the ecosystem surrounding semiconductor fabrication.
India currently imports more than 90% of the equipment and specialised materials required by semiconductor fabs, according to the source.
Reducing this dependence will require the development of domestic suppliers, specialised manufacturing capabilities and technical expertise.
The programme also aims to strengthen India's ability to develop its own semiconductor designs.
One of its targets is to support at least 50 fabless semiconductor companies.
Fabless companies design chips but do not operate their own manufacturing facilities. Instead, they outsource production to semiconductor foundries.
This business model is used by major global semiconductor companies such as AMD and Qualcomm.
The 2nm and 3nm Challenge
Another major ambition is to create a pathway towards manufacturing 2-nanometre and 3-nanometre chips.
These represent advanced semiconductor manufacturing technologies used in high-performance computing, artificial intelligence and other sophisticated applications.
India's current semiconductor manufacturing base remains far from this level.
This means that Semicon 2.0 is not merely about adding more factories. It is about building the technological ecosystem required to compete in increasingly advanced segments of the global semiconductor industry.
India's Semiconductor Demand Is Rising
India already consumes a substantial volume of semiconductor products.
According to the estimates cited in the source, the country currently consumes nearly $50 billion worth of chips annually, while domestic manufacturing contributes less than $3 billion.
That gap is expected to become significantly larger as demand increases.
Industry estimates from the India Electronics and Semiconductor Association and Counterpoint Research suggest India's semiconductor consumption could exceed $100 billion by 2030.
This growing demand provides a major opportunity for domestic manufacturing.
However, closing the gap between consumption and domestic production will require much more than semiconductor assembly plants.
Critical Minerals: The Other Side of the Semiconductor Push
Semiconductors were a major focus of the Prime Minister's Independence Day address, but critical minerals form another important part of the same industrial strategy.
Critical minerals are essential for a wide range of modern technologies, including:
Semiconductors
Batteries
Electric vehicles
Permanent magnets
Renewable-energy equipment
Advanced electronics
India's National Critical Mineral Mission, launched in January last year, has an allocation of ₹34,300 crore.
The mission covers 24 critical minerals, including lithium, cobalt, nickel, graphite and rare-earth elements.
Its strategy includes increasing domestic mining, acquiring mineral resources overseas, recycling existing materials and developing international partnerships.
India Looks Overseas for Mineral Resources
India is also attempting to secure access to critical mineral resources outside the country.
Government-owned Khanij Bidesh India has secured lithium exploration rights covering approximately 15,700 hectares in Argentina, according to the source.
India has also entered into mineral cooperation agreements with countries including Australia and Chile, while a cooperation agreement with Brazil was signed in February.
These arrangements are intended to strengthen India's supply chains for minerals that are increasingly important to advanced manufacturing.
Critical Mineral Corridor
The government has also announced a Critical Mineral Corridor, which focuses on four mineral-rich coastal states:
Odisha
Kerala
Andhra Pradesh
Tamil Nadu
The objective is not limited to mining.
The corridor is intended to encourage processing and manufacturing alongside mineral extraction, creating a more complete domestic value chain.
Processing Could Be the Biggest Challenge
Having access to mineral resources does not automatically guarantee supply-chain security.
The difficult part can be processing the raw material into forms that manufacturers can actually use.
The same issue exists in the semiconductor sector.
Building a facility is only one part of the equation. India also needs specialised technology, equipment, materials, skilled workers and supporting industries.
The government has separately approved a programme to encourage domestic production of sintered rare-earth magnets, with a targeted capacity of 6,000 tonnes annually.
These magnets are produced by compacting rare-earth mineral powder and then heat-fusing it into a solid material.
India Has Made Progress, But the Bigger Test Is Ahead
The developments highlighted in the Independence Day speech show that India's semiconductor ecosystem has moved beyond the planning stage.
Three facilities are already producing and shipping semiconductor products, while several more projects are under construction or development.
But the country's larger ambition is much more challenging.
India wants to move from packaging and testing to fabrication, advanced chip design, specialised materials and cutting-edge semiconductor technology.
At the same time, it wants to secure reliable access to the critical minerals required for chips, batteries, magnets and clean-energy technologies.
The success of this strategy will ultimately depend on how quickly India can develop these capabilities domestically and reduce its dependence on imports.
For now, the three operational plants represent the beginning of India's semiconductor manufacturing journey. Semicon 2.0, advanced fabrication and critical-mineral processing will determine how far that journey ultimately goes.
Disclaimer
This article is a rewritten version based on the source material provided. Figures, project status, government programme details and estimates reflect the supplied source and should be independently verified before publication if subsequent developments have occurred.
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