SEMICON India 2026: PM Modi highlights $13.5 billion semiconductor mission, 12 chip projects approved

India’s semiconductor ambitions have taken a decisive leap forward at this year’s SEMICON India 2026, where Prime Minister Narendra Modi announced a $13.5 billion mission to build a full‑stack chip ecosystem. The government has already green‑lit 12 new chip projects spanning fabrication, design, packaging and research, signalling a coordinated push to move the country from a software‑centric economy to a hardware powerhouse. The announcements underscore a strategic shift: India is no longer content to be a downstream consumer of chips, but aims to become a credible source of advanced semiconductor technology for global supply chains.

What Happened

During the opening plenary of SEMICON India 2026, Prime Minister Modi highlighted the $13.5 billion semiconductor mission as a cornerstone of the nation’s “Make in India” vision. He announced that twelve chip projects—covering everything from wafer fabrication to design‑house services—have received official approval. The projects involve a mix of domestic firms, multinational corporations, and joint ventures, reflecting a policy that encourages both homegrown innovation and foreign expertise.

The approved initiatives include two 300 mm wafer fabs slated for Karnataka and Gujarat, three advanced packaging lines focused on system‑in‑package (SiP) technologies, and several design‑center collaborations with U.S. and European partners. In addition, a dedicated research institute for semiconductor materials and a national talent‑development program were unveiled, aiming to create a pipeline of engineers equipped for the complexities of modern chip design.

By showcasing a broad portfolio of projects, the event sent a clear message to the global industry: India is ready to host end‑to‑end semiconductor operations, from silicon wafer production to final‑stage testing, and is prepared to back these ambitions with substantial fiscal support and policy incentives.

Key Details

The $13.5 billion mission is structured around four pillars: (1) manufacturing capacity, (2) design and IP development, (3) advanced packaging, and (4) research, development and talent. Under the manufacturing pillar, the government will provide capital subsidies of up to 30 % for fab construction, along with tax holidays for a period of ten years. The design pillar offers a 25 % rebate on R&D expenditure for companies establishing design houses in designated semiconductor parks.

Among the twelve approved projects, the two fabs are expected to each have an annual capacity of 30,000 wafers, targeting 28 nm and 45 nm process nodes—sufficient for automotive, consumer electronics, and industrial applications. The packaging lines will focus on fan‑out wafer‑level packaging (FOWLP) and heterogeneous integration, technologies that are increasingly demanded for AI accelerators and 5G/6G devices. A flagship research institute, to be located in Hyderabad, will receive an initial grant of $200 million to explore next‑generation materials such as silicon‑carbide (SiC) and gallium‑nitride (GaN).

Talent development is addressed through a partnership with the Indian Institutes of Technology (IITs) and the Indian Institute of Science (IISc), creating a “Semiconductor Academy” that will offer specialized curricula, industry‑led apprenticeships, and scholarships for advanced degrees abroad. The academy aims to train 10,000 engineers over the next five years, closing the current skills gap that has hampered domestic chip initiatives.

Background

India’s push into semiconductors has accelerated since the 2020 global chip shortage exposed the fragility of supply chains dominated by East Asian manufacturers. While the country has long been a major market for imported chips—spending over $30 billion annually on semiconductor imports—it has lacked a substantive domestic production base. Earlier policy steps, such as the 2021 Production‑Linked Incentive (PLI) scheme, laid the groundwork by offering financial incentives for chip‑related investments, but progress was modest, with only a handful of pilot projects launched.

The current mission builds on those early efforts, expanding the scope from isolated fab projects to an integrated ecosystem. By coupling manufacturing incentives with design, packaging, research and talent development, the government aims to avoid the “fab‑only” trap that left many earlier initiatives underutilized. The strategy also aligns with broader geopolitical trends, as countries worldwide seek to diversify semiconductor supply chains away from a few dominant players.

Why It Matters

A thriving semiconductor sector is a catalyst for multiple high‑growth industries. Domestic chip production can dramatically lower the cost and lead time for Indian electronics manufacturers, boosting competitiveness in smartphones, IoT devices, and electric vehicles. Moreover, a robust design ecosystem can position India as a global hub for IP creation, attracting multinational firms that outsource design work to cost‑effective, high‑skill locations.

From a strategic perspective, reducing reliance on imported chips enhances national security, especially for defense and critical infrastructure applications. As global tensions reshape trade patterns, having a sovereign chip capability provides India with greater resilience against export controls and supply disruptions. The mission also promises to generate high‑value jobs, stimulate ancillary sectors such as chemicals and precision equipment, and contribute significantly to GDP growth.

What Happens Next

Implementation will begin with the rapid disbursement of PLI funds and the issuance of clear regulatory guidelines for land acquisition, environmental clearances and customs duty exemptions. The Ministry of Electronics and Information Technology (MeitY) has set a six‑month timeline to finalize the detailed incentive framework, after which the approved projects are expected to break ground by early 2025.

International collaboration will be pivotal. The Indian government has already signed memoranda of understanding with Taiwan’s TSMC, South Korea’s Samsung, and the United States’ Intel to explore technology transfer, joint R&D, and supply‑chain integration. These partnerships aim to bring cutting‑edge process technologies and best‑practice manufacturing standards to Indian fabs, accelerating the learning curve and ensuring that the new facilities are globally competitive.

In parallel, the Semiconductor Academy will launch its first batch of courses in the upcoming academic year, while the research institute in Hyderabad will commence pilot projects on SiC power devices and GaN RF components. Together, these initiatives will create a virtuous cycle of innovation, talent development, and commercial deployment.

Conclusion

The announcements at SEMICON India 2026 mark a watershed moment for the country’s semiconductor journey. With a $13.5 billion investment envelope, twelve approved chip projects, and a comprehensive ecosystem strategy that spans manufacturing, design, packaging, research and talent, India is positioning itself to become a credible node in the global semiconductor network. Successful execution will not only reduce import dependence and create high‑skill jobs but also strengthen India’s strategic autonomy in an increasingly technology‑driven world. The next few years will be critical as policy, industry and academia converge to turn this ambitious vision into a tangible reality.