Silicon Dreams and India’s Semiconductor Future

Explore India’s semiconductor mission—challenges, policies, talent, and global chip geopolitics shaping India’s digital future.

Semiconductors are the steel of the digital age, powering phones, AI, cars, and defence. India’s semiconductor mission—through policy push, global partnerships, and rising talent—seeks to secure its place in the world chip race. This blog unpacks India’s opportunities, challenges, and future in the global semiconductor landscape.

Introduction

In his article Shaping the Future, Chip by Chip published in The Indian Express on 3 September 2025, Ashwini Vaishnaw explains how semiconductors—tiny chips that power almost every digital device—are now as important to modern society as steel was during the industrial age. These chips lie at the heart of mobile phones, satellites, medical machines, cars, and even artificial intelligence. He argues that India must become self-reliant in making semiconductors to protect its economy, society, and security. This essay brings together ideas from Vaishnaw’s article, studies on India’s place in the global semiconductor value chain, and Chris Miller’s book Chip War (Scribner, 2022) to explore how semiconductors shape technology, geopolitics, and India’s future.

The Power of Chips

Semiconductors are tiny but mighty. They control electricity in devices, allowing computers to think, phones to connect, and machines to work with speed. A single chip may pass through more than 1,000 steps and cross over 70 borders before it reaches the user. During the COVID-19 pandemic, chip shortages stopped car factories, delayed phones, and slowed industries across the globe. This showed that chips are not just small pieces of metal and silicon; they are the invisible threads weaving together the digital world.

Global Supply Web

The making of chips is part of what experts call the global value chain (GVC). This chain covers everything from research and design to manufacturing and packaging. The United States leads in design, while Taiwan and South Korea dominate production. Japan and parts of Europe supply special machines and chemicals. No single country controls the entire process, which means the system is fragile. If one country faces trouble, the whole chain suffers. Taiwan’s company TSMC, for instance, produces the most advanced chips in the world, and any disruption there could affect industries worldwide.

India’s Rising Role

India is not yet a major chip producer, but it is gaining ground in design and assembly. The country has around 30,000 design engineers who create about 3,000 chip designs each year for global firms. Schemes such as the Design Linked Incentive (DLI) and Chip to Startup (C2S) encourage young talent to build new ideas. India is also starting to grow in packaging and testing, which require less capital but still provide jobs and skills. Big firms like Tata have begun building plants in Gujarat and Assam. The launch of India’s first domestically produced semiconductor chip, made possible through new fabs under the India Semiconductor Mission, marks a historic turning point. This event provides a kairos moment, showing that India has moved from aspiration to achievement, signalling its intent to join the circle of nations shaping the digital future. This marks the beginning of India’s presence in the semiconductor world, though the journey is still long.

Talent and Training

One of India’s greatest strengths is its people. More than one-fifth of the world’s chip designers are Indian. The government has supported this by giving free access to design software for thousands of students and start-ups. International companies like Lam Research and Applied Materials are also training thousands of engineers. This talent pool may help India overcome the shortage of skilled workers that experts predict the world will face soon. If nurtured well, India’s engineers can play a central role in the next generation of semiconductor advances.

Policy Push

India’s government has launched the India Semiconductor Mission (ISM) to build factories, encourage research, and link industry with universities. Policies like the Production Linked Incentive (PLI) and SPECS support both big investors and smaller start-ups. States like Gujarat and Karnataka offer land, subsidies, and quick approvals for factories. These measures aim to create not just individual plants but an ecosystem where design, research, production, and testing come together. History shows that such ecosystems, like those in Silicon Valley or Taiwan, make countries successful in advanced industries.

Challenges in Manufacturing

Despite progress, India faces tough hurdles. Building a factory for advanced chips requires billions of dollars, pure water, steady power, and highly skilled workers. The technology for the smallest and fastest chips is controlled by a few firms in Taiwan, South Korea, the United States, and Europe. Even if India builds factories, competing with giants like TSMC or Samsung will be difficult. Past attempts in other countries, such as China’s huge investments, show how hard it is to catch up in this industry.

Geopolitics of Silicon

Semiconductors are not only about technology; they are about power. Miller’s Chip War shows how control over chips has shaped military strength and global politics. The United States used its chip advantage during the Cold War and still controls software and key equipment. China has invested billions to become self-sufficient but faces restrictions from Western nations that want to limit its rise. India, meanwhile, has chosen to collaborate with multiple partners, including the US, Japan, and the EU. This balanced approach helps India grow while avoiding dependence on any single power.

Society and Economy

For India, chips are more than machines; they are tools for social progress. With over 1.4 billion people, the growth of industries like telecom, healthcare, and electric vehicles will create jobs and raise living standards. Start-ups like Mindgrove and Netrasemi are already designing chips for the Internet of Things and consumer devices. Such companies show how technology can support entrepreneurship and innovation, creating opportunities beyond the major cities. In the long run, semiconductors may drive not just economic growth but also education, skills, and mobility for millions of Indians.

Lessons from the World

Other countries provide valuable lessons. Japan rose in the 1980s by focusing on quality and coordination. Taiwan built success by pioneering the pure-play foundry model. South Korea expanded rapidly through investment and innovation. These stories show that industrial policy, talent, and collaboration are essential. India is now at a stage where it can learn from these experiences and create its own model, blending international cooperation with local strengths.

The Road Ahead

The future of India’s semiconductor journey will depend on steady policies, patient capital, and strong partnerships. Success will not come overnight; it requires decades of effort. But the rewards are high. If India succeeds, it may become a hub for chip design, packaging, and even production, altering global supply chains. If it stumbles, it will still gain lessons for building other advanced industries. Either way, the effort reflects ambition, vision, and the will to shape the future rather than merely follow it.

Conclusion

Semiconductors, as Ashwini Vaishnaw writes, are the steel of the digital age. They power economies, societies, and militaries. The story of chips is one of innovation, competition, and global interdependence. For India, the journey is just beginning. With talent, supportive policies, and global partnerships, the country has a rare chance to rise as a key player. Yet the path is full of challenges, from financial demands to technological barriers. What remains certain is that chips will continue to shape the world, and India’s pursuit of them will help decide its place in the future global order.

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The Source’s Authority and Ownership of the Article is Claimed By THE STUDY IAS BY MANIKANT SINGH