India needs to ‘shift gears’ in case it wants to ‘win’ the race to be a global power in making semiconductors, says a report put out by the Niti Aayog – the planning body of the government.
The report, titled ‘Future of India’s Semiconductor Industry’, says “winning the semiconductor race will not be easy if India continues to ‘run’ the existing race; instead, it should shift gears and target becoming the ecosystem player that the global semiconductor industry cannot run without.”
This requires India to pivot away from the ‘catch-up’ game in the foundry race and focus on winning where advanced packaging, system integration and manufacturing scale matter as much as ‘transistor nodes’ – a name to define the architecture of a semiconductor chip.
Semiconductors sit at the core of a modern economic power. They serve as the critical backbone powering artificial intelligence, telecommunications, electric mobility, defence systems, healthcare technologies and digital public infrastructure.
By 2035, the global semiconductor market is expected to exceed $ 1.5 trillion; the Indian semiconductor market is projected to reach around $ 200 billion, said the report, adding “However, despite the growing domestic demand, nearly 90–95 per cent of this demand is currently met through imports, leading to large foreign exchange outflows and increasing the vulnerability of critical sectors to supply-chain disruptions”.
Instead of chasing the ‘race’ from behind, India should define its own pathway—one that is not only distinct but shaped by strategic self-sufficiency, ecosystem strength and global indispensability, said the report.
At the core of this vision, India needs to have a resilient and disciplined manufacturing foundation, anchored by world-class fabrication that focuses on the economy and strategic autonomy.
The report says India needs to focus on speciality analog and mixed-signal chips, compound semiconductors such as Silicon Carbide (SiC) and Gallium Nitride (GaN).
Together, these will power India’s automotive, energy, industrial, telecom and strategic sectors—ensuring that technologies critical to India’s future are built on Indian soil.
India needs to play to its greatest strengths, including its design talent, high quality workforce and materials and chemistry ecosystem potential. Building on these advantages, it should aim to emerge as a global leader in semiconductor design and system architecture, a top-three destination for outsourced semiconductor assembly and test (OSAT) and advanced packaging and a trusted supplier of critical semiconductor materials.
The global semiconductor industry is entering a phase of sustained, technology-led expansion. This transition is largely driven by artificial intelligence (AI)-centric computing, 5G/6G networks, electric vehicles, data centres, industrial automation and edge intelligence. Demand is moving beyond general-purpose chips toward specialised architectures, accompanied by a growing emphasis on advanced packaging and system-level performance, the Nit Aayog said.
