Key Takeaways
- India hosts a handful of active semiconductor fabs, but most produce mature‑node wafers (180nm‑130nm).
- Major players include Tata Group - a diversified conglomerate that recently launched a 300mm fab - and its subsidiary Tata Semiconductor Limited.
- The Government of India backs the sector with the Production‑Linked Incentive (PLI) scheme, tax holidays and land grants.
- Currently manufactured devices range from power MOSFETs and analog ICs to simple CMOS image sensors; advanced logic chips are still imported.
- Challenges include high capital costs, talent gaps, and limited access to sub‑100nm process equipment, but a pipeline of new projects aims to address these by 2030.
What is semiconductor manufacturing?
At its core, semiconductor manufacturing in India refers to the series of clean‑room processes that turn raw silicon wafers into functional micro‑chips. The journey starts with crystal growth, then moves through photolithography, etching, doping, and packaging. Each step requires ultra‑precise equipment, massive capital investment, and a steady supply of ultra‑pure chemicals.
Globally, most cutting‑edge chips are produced on 5nm‑7nm nodes, but a large share of the world’s demand - especially for automotive power modules, IoT sensors, and basic analog circuitry - still relies on mature nodes like 180nm, 130nm, and 90nm. Those are the process sizes that India’s current fabs can handle.
Where are the Indian fabs?
India’s fab landscape is modest but growing. The most visible facilities include:
- Hindustan Semiconductor Manufacturing Corp (HSMC) a joint venture between Tata Group and Taiwan’s Powerchip Semiconductor Manufacturing Corp, operating a 200mm fab at Sanand, Gujarat. HSMC started low‑volume production of analog and power ICs in 2022 and is upgrading to 300mm lines.
- International Semiconductor Manufacturing Corp (ISMC) backed by the Indian government and a consortium of private investors, this new 300mm fab in Karnataka aims to hit 2027 for volume production of CMOS image sensors.
- Tata Semiconductor Limited the manufacturing arm of Tata Group, focusing on 180nm analog and mixed‑signal chips for power electronics.
- Vedanta Limited’s Fab a smaller 150mm facility in Odisha, primarily serving the domestic automotive market.
Most of these fabs are located in Special Economic Zones (SEZs) that offer tax breaks, power subsidies, and streamlined customs for imported equipment.
Government policies driving the sector
The Government of India has launched several incentive schemes, the biggest being the Production‑Linked Incentive (PLI) for Electronics Manufacturing, which earmarks $10 billion for semiconductor fabs over the next five years. Key policy levers include:
- PLI payouts based on the volume of wafers produced on 180nm‑130nm nodes.
- Capital subsidy of up to 30% for fab equipment imported from approved vendors.
- Land allocation of 100‑acre parcels in Gujarat, Karnataka, and Tamil Nadu with ready‑made water and power infrastructure.
- Skill development through partnerships with IITs and the National Programme on Technology Enhanced Learning (NPTEL).
These measures have helped attract foreign partners like Powerchip and STMicroelectronics, while also encouraging home‑grown players to scale up.
What types of chips are made locally?
India’s fabs are still focused on mature nodes, which are ideal for certain categories of devices:
- Power MOSFETs and IGBT modules used in electric‑vehicle drivetrains and renewable‑energy inverters.
- Analog front‑ends for sensor interfacing, medical devices, and industrial control.
- CMOS image sensors - the tiny chips that capture pictures in smartphones and security cameras. CMOS sensor technology at 130nm is a sweet spot for cost‑sensitive camera modules.
- Microcontrollers (MCUs) for IoT gateways, home automation and simple robotics.
High‑performance CPUs, GPUs, and 5G base‑band chips remain the domain of foundries in Taiwan, South Korea, and the United States. Indian designers still outsource the actual wafer fabrication for those advanced products.
Challenges and the road ahead
Even with policy push, a few hurdles slow down rapid expansion:
- Capital intensity - a modern 300mm fab can cost $5‑7 billion. Access to long‑term financing is still limited.
- Equipment access - most sub‑100nm lithography tools are controlled by a handful of OEMs (ASML, Nikon, Canon) and are subject to export restrictions.
- Talent pool - while India produces many electrical engineers, specialized clean‑room training is scarce. Companies are setting up apprenticeship programs to bridge the gap.
- Supply‑chain fragility - raw wafers, chemicals, and ultrapure water must be imported or produced domestically; any disruption can halt production.
Looking forward, the sector aims to achieve the following milestones by 2030:
- Increase total fab capacity to >5 million 300mm wafers per year.
- Introduce 90nm‑130nm mixed‑signal processes for automotive safety‑grade ICs.
- Launch at least one semiconductor manufacturing India pilot line for sub‑90nm logic, leveraging EUV partnerships.
- Build a domestic ecosystem of equipment refurbishers, test houses, and packaging facilities.
If these targets are met, India could move from a “consumer of chips” to a modest “producer of chips” within the global supply chain.
How Indian fabs compare to global leaders
| Metric | Indian Fab (e.g., HSMC) | Global Leader (e.g., TSMC) |
|---|---|---|
| Wafer Size | 200mm‑300mm (primarily 200mm, transitioning to 300mm) | 300mm (full‑scale 300mm lines) |
| Process Node | 180nm‑130nm (mature) | 5nm‑7nm (advanced) |
| Annual Capacity | ~0.5 M 300mm wafers | ~12 M 300mm wafers |
| Primary Products | Power MOSFETs, analog ICs, CMOS sensors | Logic CPUs, GPUs, high‑end SoCs |
| Ownership | Joint‑venture (private + foreign) | Majority private (TSMC), some state‑owned (SMIC) |
The table shows that Indian facilities excel in cost‑effective production of mature‑node chips, while global leaders dominate the high‑performance, low‑node market. The gap isn’t a drawback-it’s a niche that India can own.
Staying updated on Indian semiconductor news
Because the sector evolves fast, here are a few practical ways to keep tabs:
- Follow the Ministry of Electronics & Information Technology (MeitY) press releases.
- Subscribe to industry newsletters such as “Chip India Insights” and “Semiconductor Weekly”.
- Track quarterly earnings of listed Indian fab owners like Tata Group and Vedanta.
- Join local chapters of the Semiconductor Society of India for webinars and workshops.
These sources often surface the latest capacity kicks, new equipment orders, and policy tweaks before they appear in mainstream media.
Frequently Asked Questions
Are any chips made in India?
Yes. Indian fabs currently produce power MOSFETs, analog ICs, basic microcontrollers and CMOS image sensors mainly on 180nm‑130nm processes.
Which companies operate semiconductor fabs in India?
The main players are Hindustan Semiconductor Manufacturing Corp (HSMC), International Semiconductor Manufacturing Corp (ISMC), Tata Semiconductor Limited and Vedanta’s small‑scale facility. Several foreign partners like Powerchip and STMicroelectronics have joint‑venture stakes.
What incentives does the Indian government provide?
The PLI scheme offers cash payouts tied to wafer volume, up to 30 % capital subsidy for imported equipment, tax holidays for 10 years and dedicated SEZ land parcels with free utilities.
Will India produce advanced 7nm chips soon?
A full‑scale 7nm line requires EUV lithography, which currently isn’t available domestically. Plans exist for a pilot sub‑90nm line by 2030, but mass production will likely still rely on imports for at least another decade.
How can I source locally‑made semiconductors for my project?
Contact the fab’s sales offices or use Indian electronics distributors such as Arrow India, Avnet India, or local OEMs that list “Made in India” part numbers. Verify the wafer provenance through the supplier’s certification documents.
