Asia has remained the center of global semiconductor production, with Taiwan, South Korea, Japan, and mainland China accounting for over 72% of production since 2020. The US and Japan have shifted focus to higher-value design segments. As the industry seeks to diversify geographic risk, this concentration of production is increasingly being questioned.

Policies promoting economic nationalism and supply chain resilience in Japan, South Korea, and India are reshaping the industry. More countries are developing onshore capabilities to reduce reliance on offshore, geographically concentrated supply sources. India is also moving beyond its traditional role in electronics and technology services to become a significant participant in the semiconductor value chain.

India’s semiconductor growth is driven by strong policy direction and an ambitious ecosystem, setting the stage for the policy discussion that follows.

The Government of India has strengthened its in-country semiconductor capabilities to support regional self-sufficiency. India aims to become a trusted partner in developing critical semiconductor technologies for global and domestic clients.

Government policies and incentives supporting this ambition have been announced. This approach aligns with the global semiconductor industry’s evolution, which now emphasizes ecosystem development as much as manufacturing location.

In 2021–22, under the India Semiconductor Mission (ISM), the government allocated $30 billion in incentives to establish India as a global hub for semiconductor manufacturing, display technologies, electronics, and related sectors.

India Semicon Mission:

By 2026, this vision has evolved further. India Semiconductor Mission 2.0 (ISM 2.0), announced in the Union Budget 2026–27, is designed to create a more complete semiconductor ecosystem moving beyond fabrication to include equipment, materials, and design IP. Backed by a proposed Rs 1.2 lakh crore outlay, the initiative targets 75% domestic self-sufficiency in demand by 2030. It also aims to enable India to manufacture advanced 2nm–3nm chips by 2035. ISM 2.0 is expected to accelerate local innovation, supply chain resilience, and technology transfer. It supports the growth of India’s skilled workforce and ecosystem leadership in next-generation semiconductor technologies.

  • A broadened scope covering the full value chain, including equipment, raw materials, and specialized chemicals.
  • A stronger design and IP focus, with emphasis on full-stack Indian intellectual property and fabless design companies.
  • Supply chain resilience, both domestic and global, to counter geopolitical uncertainty
  • Research and training, through industry-led R&D and skill-building centers, to create a strong workforce pipeline.

India’s key advantage is its established base of capabilities in the High-Tech sector.

  • A design powerhouse for 200+ semiconductor companies
  • Home to 20% of worldwide EDA for automotive, smartphone, PC, server, wireless, and IoT chips
  • The second-largest mobile phone manufacturer
  • A market with a semiconductor size of approximately $25B today, striving to become $110B by 2030
  • A country whose technology sector crossed USD 280 B in annual revenues in 2025
  • A technology and AI ecosystem employing over 6 million people
  • Home to 1,800+ Global Capability Centers, including 500+ focused on AI
  • A market where 26% of companies have achieved AI maturity at scale
  • An innovation ecosystem with around 1.8 lakh startups. Nearly 89% of new startups launched last year use AI in their products or services.
  • A country scoring 2.45 out of 4 on the NASSCOM AI Adoption Index, with 87% of enterprises actively using AI solutions
  • Ranked 3rd among the top four countries in AI skills, capabilities, and policies in the Stanford AI Index

These indicators underscore that India’s semiconductor advance relies on its established, large-scale technology ecosystem and deep engineering strength.

Why GCCs are becoming central to India’s semiconductor story

India’s growing importance in semiconductors is underpinned by global technology leaders establishing capability centers (GCCs) that serve as strategic hubs for innovation, talent development, and operational excellence.

The global top 10 semiconductor companies already have long-established design centers in India. These include:

  • Qualcomm for high-end smartphone SoCs
  • Intel and AMD for desktop and laptop processors
  • NVIDIA for GPUs
  • MediaTek for digital TV, IoT, and smartphone SoCs
  • Infineon and STMicro for automotive
  • Micron for memory and SSD

This sustained presence reflects continued confidence in India’s engineering capabilities.

India GCCs today support a broad set of semiconductor capabilities, including:

  • ASIC, RTL, design, and verification
  • System software and firmware
  • DFT and physical design
  • Pre-silicon verification and post-silicon validation
  • Product engineering and architecture
  • SW verification, QA, DevOps, and multimedia software

These capabilities are applied across the semiconductor value chain, including GPUs, CPUs, Ethernet, wireless, memory, SSDs, 5G chipsets, smartphone SoCs, automotive microcontrollers, IoT devices, networking chips, and power electronics.

This makes the GCC model especially relevant to India’s semiconductor sector. GCCs serve as strategic anchors, driving product innovation, fostering cross-border collaboration, and enhancing global competitiveness. India is not just hosting support functions; it is actively engaged in core engineering and product development for leading global semiconductor companies. The GCCs’ deep integration into core technology operations elevates India’s strategic value in the global semiconductor ecosystem.

The pace of this transformation is accelerating as fresh investments continue to reinforce India’s upward trajectory.

India’s existing strengths are now leading to new investments and collaborations aligned with Semiconductor Mission 2.0.

Recent examples highlight this momentum:

  • Micron started its ATMP facility at the Sanand SEZ, Gujarat, in Q1 2024, with a LEED Gold-certified cleanroom dedicated to wafer-to-BGA processes for DRAM and NAND, creating 5,000 direct and 15,000 contract jobs.
  • Applied Materials is expected to invest USD 400 million to build an R&D lab for chemicals and gases in Whitefield, Bengaluru.
  • Lam Research will establish R&D, engineering, and tool prototyping capabilities for semiconductor capital goods, investing USD 30 million and aiming to train 60,000 engineers using SemiVerse technology.
  • NVIDIA and Reliance aim to build India’s foundation for a large language model trained on multiple Indian languages for generative AI, hosted in Reliance Jio’s data centers and powered by NVIDIA GPUs.

These investments demonstrate that India is now recognized as a location where semiconductor capabilities can be designed, built, and scaled.

Why this matters now

India’s semiconductor opportunity results from a convergence of policy direction, engineering scale, AI maturity, GCC experience, and growing global investment, rather than a single development. This makes the present moment pivotal.

India is steadily establishing itself as both a semiconductor market and a manufacturing hub, as well as a Global Capability Center for semiconductor and high-tech leaders. GCCs accelerate R&D cycles, create sustainable talent pipelines, and enable real-time transfer of innovation between Indian and global teams. We believe semiconductor companies can no longer afford to overlook India.

In the next part, we will move from identifying opportunities to discussing actionable strategies: how to credibly and sustainably build and scale GCC semiconductor capabilities, delivering real and measurable outcomes. Stay tuned for practical insights that build on this conclusion and sharpen the close.