2 September 2025 marked a watershed moment for India's technological sovereignty as Prime Minister Narendra Modi received the first set of 'Made-in-India' chips from a pilot line, the Vikram 32-bit processor, developed by the Indian Space Research Organisation's (ISRO) Semiconductor Laboratory at the Semicon India 2025 conference.
The pilot chip system on display had the involvement of more than 28 entities including engineering colleges in far flung areas of the country. With 12 strategic MoUs signed and a $1 billion Deep Tech Alliance launched, the event at New Delhi's Yashobhoomi marked a pivotal moment in India's quest to establish itself as a global semiconductor powerhouse despite being a late starter.
Designed to withstand the harsh environmental conditions of space launch vehicles, the processor demonstrates India's capability to create high-reliability, mission-critical semiconductors.
This achievement represents far more than a single chip—it symbolises India's rapid transformation from a semiconductor import-dependent nation to an emerging powerhouse in the global chip ecosystem.
This milestone comes at a time when six semiconductor manufacturing units are under construction across the country, signalling the breadth and depth of India's commitment to building a comprehensive semiconductor manufacturing ecosystem.
A Dozen MoUs Signed
The dozen MOUs signed at Semicon India 2025 represent far more than ceremonial agreements. They constitute a carefully orchestrated strategy to build India's semiconductor ecosystem from the ground up, going further up from the design strength for years.
The agreements span critical areas including camera modules, microphone technology, miniature packaging, and crucially, talent development—addressing both the technical and human capital requirements for a robust semiconductor industry.
What makes these MOUs particularly significant is their focus on indigenous technology development. Rather than merely becoming an assembly hub for foreign companies, India is positioning itself to develop proprietary technologies that could give it a competitive edge in specific niches. The emphasis on areas like camera modules and microphone technology aligns perfectly with India's strengths in the smartphone and electronics manufacturing sectors, creating natural synergies that could accelerate adoption and scaling.
The talent development component of these agreements deserves special attention. The semiconductor industry's most persistent challenge globally has been the shortage of skilled professionals.
By embedding talent development into these partnerships from the outset, India is attempting to solve this bottleneck proactively rather than reactively—a lesson learned from other countries' semiconductor development experiences. Odisha's separate MOUs worth Rs 2,655 crore with firms like TopTrack Hi-Tech PCB demonstrate how states are competing to become semiconductor hubs.
This healthy competition among states could accelerate infrastructure development and create multiple centers of excellence, reducing the risk of over-concentration in any single region.
With Gujarat, Assam, Andhra Pradesh and Punjab already in the fray for various aspects of the ecosystem, the spread across the country is a optimal approach.
Markets, Investments, and the Semiconductor Mission
The numbers tell a compelling story of India's semiconductor ambitions. The India semiconductor market is expected to reach USD 13.54 billion in 2025 and grow at a CAGR of 7.39 percent to reach USD 23.58 billion by 2030.
However, other projections suggest even more aggressive growth, with the market projected to reach USD 105 billion by 2030 and estimated to grow at a CAGR of around 18 percent during the forecast period, ie, 2025-30. These varying projections reflect the dynamic nature of the sector and the potential for exponential growth as manufacturing capabilities mature.
Currently, India's semiconductor ecosystem forms only three percent of the overall global market, but this represents a significant opportunity rather than a limitation.
The market size progression from $38 billion in 2023 to $45–50 billion in 2024–2025 demonstrates the momentum already building in the sector.
The scale of investment commitments underscores the seriousness of India's semiconductor push. The union cabinet sanctioned four additional semiconductor manufacturing projects under the India Semiconductor Mission (ISM), bringing the total to 10 approved projects with a cumulative investment commitment of about INR 1.60 trillion (US$18.23 billion).
This represents one of the largest industrial investments in India's recent history, demonstrating both government commitment and private sector confidence.
The Production Linked Incentive (PLI) scheme has already shown impressive results across manufacturing sectors. The PLI scheme attracted INR 1.61 lakh crore (USD 18.72 billion) in investments, generated INR 14 lakh crore (USD 162.84 billion) in production, and INR 5.31 lakh crore (USD 61.76 billion) in exports, while creating 11.5 lakh jobs. These figures, while spanning multiple sectors, indicate the potential economic impact when similar schemes are applied specifically to semiconductor manufacturing.
The Global Chip Economy
Critics often point to India's late entry into the semiconductor race, noting that countries like Taiwan, South Korea, and China had decades-long head starts. However, this perspective misses the dynamic nature of the semiconductor industry and the emerging opportunities that India is uniquely positioned to capture.
The semiconductor industry is undergoing a profound transformation driven by artificial intelligence, edge computing, and the Internet of Things.
These new paradigms require different types of chips and manufacturing approaches, creating opportunities for new players to establish themselves in growing market segments rather than competing directly in mature, capital-intensive areas dominated by established players.
India's timing, while seemingly late, may actually be fortuitous.
The industry is fragmenting from its traditional concentration in East Asia due to geopolitical tensions, supply chain vulnerabilities exposed during the pandemic, and the "China+1" strategies adopted by global companies. This fragmentation creates openings for countries like India that offer political stability, engineering talent, and large domestic markets.
To understand India's semiconductor opportunity, it's crucial to grasp the economic dimensions of the global chip economy. The semiconductor industry has evolved into one of the world's most economically significant sectors, with global revenues exceeding $500 billion annually and projected to reach $1 trillion by 2030.
This makes semiconductors more valuable than many national GDPs, positioning them as critical economic assets that nations compete fiercely to control. The chip economy operates on unique economic principles that differ from traditional manufacturing.
Unlike most industries where labour costs dominate, semiconductor manufacturing is characterised by enormous upfront capital investments—often $10–20 billion for a single advanced fabrication facility—but relatively low marginal production costs once operational. This capital intensity creates significant barriers to entry but also generates substantial returns for successful players.
The economic multiplier effects of semiconductor manufacturing are particularly pronounced. Every direct job in semiconductor manufacturing typically creates 3–5 indirect jobs in the broader economy, from equipment suppliers and materials providers to logistics and support services. The high-value nature of chip production means that countries with strong semiconductor capabilities enjoy substantial trade surpluses and economic resilience.
For India, entering this economy represents a strategic economic transformation. The country's traditional strength in services, particularly software, provides a natural bridge to semiconductor design and manufacturing.
The economic benefits extend beyond immediate job creation to include technology spill-overs, industrial upgrading, and enhanced competitiveness across multiple sectors that depend on chips—from automotive and telecommunications to consumer electronics and defence systems.
India’s Talent Advantage
India's human capital advantage in semiconductors is well established but continues to expand. Approximately 20 percent of the global chip design workforce is based in India, with many employed by top-tier multinational firms. This represents roughly 200,000 engineers currently engaged in chip design activities, providing a substantial talent foundation for manufacturing expansion.
The economic benefits of semiconductor employment are particularly attractive. The average salary for a Semiconductor Engineer is INR 9.6 lakhs per year in India, which represents approximately 2.5 times the national average engineering salary. For senior positions, salaries for senior-level positions, such as director or vice president, can range from INR 50–100 lakhs per annum. These compensation levels reflect the high-value nature of semiconductor work and its potential to drive economic mobility.
The talent pipeline appears robust, with 1,581 open jobs for semiconductors in India as of August 2025, indicating active hiring across the sector. The semiconductor industry in India also offers good career growth opportunities, with skilled professionals able to progress to senior-level positions within a few years.
Strategic Win
What makes this achievement particularly remarkable is the collaborative nature of India's semiconductor development. The Vikram processor exemplifies how distributed expertise across multiple institutions can create world-class technology. The processor's development represents a collaborative effort spanning ISRO's various centres, the Semiconductor Laboratory in Chandigarh, and multiple academic and research institutions like IITs and NITs.
This distributed approach leverages India's diverse talent pool and institutional strengths, creating a resilient ecosystem where different entities contribute specialised modules—from design and verification to testing and packaging.
Such collaborative models not only reduce development risks but also build institutional knowledge across multiple nodes, ensuring that India's semiconductor capabilities are not concentrated in any single location or organisation. This distributed approach has proven particularly valuable in creating the expertise needed for the transition from design to manufacturing.
The strategic dimensions of this achievement cannot be overstated.
In an era where semiconductors have become the new oil, controlling chip production means controlling technological destiny. The same ecosystem that created the Vikram processor can pivot to automotive-grade semiconductors—a market projected to cross $100 billion globally by 2030.
This technological sovereignty reduces India's vulnerability to global supply chain disruptions and provides leverage in international technology negotiations.
The economic transformation potential is enormous. India's semiconductor journey requires sustained commitment across multiple dimensions, but the returns justify the investment. Research and development investment must increase substantially, particularly in advanced materials science and process engineering. Academic institutions need upgraded laboratories and industry partnerships to stay relevant.
Export possibilities are already emerging. The 2025 Semicon India brought over 350 companies from around the world with 50 top CEOs in attendance and attracted 20,750 visitors from 48 nations, demonstrating international interest in India's semiconductor capabilities.
These figures were almost double from the 2024 event, indicating rapidly growing global confidence in India's semiconductor ecosystem. Twelve Memorandums of Understanding (MoUs) were announced during Semicon India 2025 which focus on enhancing product development, expanding service capabilities, and strengthening the skills development sector.
The government has strategically approved 25 per cent local value addition by 2025–26 and 40 per cent by 2030 in electronics manufacturing, creating clear milestones for industrial development. This approach ensures that India's semiconductor capabilities develop genuine depth rather than remaining merely assembly operations.
Need for Sustained Efforts
Looking ahead, India's semiconductor journey requires sustained commitment across multiple dimensions. To sustain this momentum and advance to higher-end chip manufacturing, India must focus on several critical areas.
First, scaling from the current 28–90 nm technology nodes to advanced nodes below 14 nm requires massive capital investment and cutting-edge clean room facilities.
Most importantly, India must resist the temptation to compete on cost alone and instead focus on innovation, reliability, and specialised applications where Indian engineering excellence can create differentiated value. The journey has to be more robust.
(Subimal Bhattacharjee is a Visiting Fellow at Ostrom Workshop, Indiana University Bloomington, USA, and a cybersecurity specialist. This is an opinion piece. The views expressed above are the author’s own. The Quint neither endorses nor is responsible for them.)