New Delhi: India is positioned to benefit from a global semiconductor shortage driven by demand for artificial intelligence, even though it still cannot manufacture a chip on its own, Ashok Chandak, the President and CEO of SEMI India and the India Electronics and Semiconductor Association (IESA), said ahead of Semicon India 2026, which opens in Delhi on September 17.
“We are sitting on a sweet spot,” Chandak said in an interview with ThePrint on Thursday. A worldwide shortage set off by the surge in AI computing has pushed prices for memory chips, processors and graphics chips, the hardware that runs AI systems, “out of the roof”, he said.
Data centres also need conventional chips such as power-management devices and sensors, a segment Indian plants can supply. The three chip units already operating in the country are sold out and shipping worldwide, he said, and two more are expected to start production this year.
India, however, does not have the technology to fabricate chips and will depend on foreign partners to build it. “India never had this manufacturing technology for semiconductors,” Chandak said. Developing it from scratch would take 10 to 20 years, by which time “time will be again gone”, he said, so the programme has been built around global collaboration.
India’s strength is in chip design, the software-led step of laying out a chip before it is made, where more than 140,000 engineers work with Indian and global firms. The domestic market, worth $45-50 billion in 2024-25, is projected to touch $100-110 billion by 2030.
A fabrication plant, or fab, is the front-end factory that etches circuits onto silicon wafers, the hardest and most expensive step, and one India has never done at scale. The three units now running, Micron, Kaynes and CG Semi, all in Sanand in Gujarat, are back-end plants known as OSAT, or outsourced semiconductor assembly and test, which package and test chips whose wafers are made abroad. That gap is the basis of the long-running criticism that India is only doing packaging and not making chips of its own.
Chandak pointed to the Tata-Powerchip fab coming up at Dholera in Gujarat, a Rs 91,000-crore plant that would be India’s first true wafer-fabrication unit, with a planned capacity of 50,000 wafers a month.
Union Information Technology Minister Ashwini Vaishnaw has said its first chip is expected in December 2026, with commercial output scaling through 2027 and 2028.
Asked whether the plant would be ready on time, Chandak said, “Let us not ask these questions right now, because we have shown the proof.” The three operating units showed Indian companies could execute such projects, he said, and Tata and its Taiwanese partner PSMC were building fast, with the firm having already signed customer agreements.
He also rejected the charge that India is stuck with outdated technology. Chip performance is measured by the node, in nanometres, with a smaller number meaning a more advanced chip. Cutting-edge phone and AI chips use 3 to 7 nanometre nodes, while India’s plants make older chips of 28 nanometres and above, used in cars, appliances and power systems.
Those older chips are the highest-volume part of the market, with more than 60 per cent of global chip volume at the 28, 45, 90 and 110 nanometre nodes India is making, Chandak said. “We are not doing something which is outdated or which has no demand,” he said.
Prime Minister Narendra Modi will inaugurate Semicon India 2026 on the morning of September 17 at Yashobhoomi in Delhi, where it runs to September 19. The exhibition is close to sold out and will carry more than 525 exhibitors, 60 per cent more than last year, including 243 global companies, with participation from over 40 countries.
Organisers expect more than 40,000 visitors across three days. The venue will house a workforce-training pavilion, a startup pavilion with more than 40 firms, a venture-capital pitching arena, a women’s forum, and tracks on electronic components and display technology.
Japan, Korea, the Netherlands, Singapore, Malaysia and Sweden will set up country pavilions, and India will hold roundtables with them and other countries it is courting for technology.
“These are the countries today they have got the highest level of technology continuum,” Chandak said. India had earned what he called “the currency of trust”, he added, because its earlier announcements had turned into operating plants.
Semicon India 2026 follows the government’s notification of Semicon 2.0, the second phase of the India Semiconductor Mission, which the Cabinet approved on 15 July with an outlay of Rs 1,27,500 crore.
The scheme covers six pillars: design, equipment and materials, fabrication, packaging, research, and talent. It cut capital support for fabs to between 25 and 40 percent, from up to 50 per cent earlier, and directed money towards equipment, chemicals and gases, which India imports almost entirely. Over 90 percent of chipmaking equipment and 85-90 percent of specialty chemicals are also imported.
Close to 10 percent of the global chip market is expected to be in India in the coming years, Vaishnaw has said.
The design and startup provisions are among the biggest changes, Chandak said. The first phase gave more than 100 startups access to EDA tools, the software used to design chips, funded 24 of them, and extended access to over 355 institutes.
Semicon 2.0 opens eligibility to large corporations and to Overseas Citizens of India, with conditions. “Companies must be set up in India, IP must remain in India, it should be owned by Indian citizens,” he said. Startups can now get seed funding of up to Rs 15 crore, or half a project’s cost.
A research pathway towards 3 to 7 nanometre nodes has also been set out. Vaishnaw has spoken of targeting 3nm and 2nm, and of India ranking among the top four chip-making nations by 2035. On skills, the government says it has trained more than its target of 85,000 engineers within four years and is now aiming for another 100,000.
Over the next couple of years, Chandak expected five to seven more fabs and foundries to be announced, in logic, memory and compound semiconductors, the last being chips made from materials other than plain silicon for usage such as power and telecom. One such unit has already been cleared in Odisha. More than 50 equipment and materials companies would come up as well, he said.
He summed up India’s progress as a shift through four Cs, from establishing credibility in the first phase to building capability in the second, backed by government commitment and policy continuity.
“The real success of our semiconductor sector will not be measured by fabs alone,” he said, but by the intellectual property, products, companies and talent India builds, the value it keeps at home, and the markets it serves abroad.
(Edited by Ajeet Tiwari)
Also read: Semicon 2.0 cuts fabrication subsidy to 40%, puts Rs 1.27 lakh crore into chip supply chain