India’s ambition to capture around 25 per cent of global semiconductor demand by 2032 will depend not only on new fabrication and advanced packaging facilities, but also on the development of a robust domestic supply chain, technical talent and supporting manufacturing infrastructure.
According to a report by JM Financial, projects approved under the first phase of the India Semiconductor Mission (ISM 1.0) are expected to require capital equipment worth USD 12–13 billion. The report highlighted the importance of building a reliable local supplier base to support semiconductor facilities and minimise operational disruptions.
The global semiconductor market is projected to expand from USD 775 billion in 2024 to USD 1.6 trillion by 2030. India’s semiconductor market is expected to reach USD 110–120 billion over the same period, creating the need for additional fabrication and packaging facilities.
Building a Local Vendor Network
The growth of semiconductor manufacturing is also increasing demand for suppliers located close to production facilities, where rapid access to equipment, materials and maintenance services can help reduce downtime.
Tata Electronics’ semiconductor fabrication facility in Dholera is expected to rely on more than 400 suppliers. To support this ecosystem, the company is developing a vendor park spread across more than 350 acres in Dholera.
The planned park is designed as a plug-and-play facility for global suppliers, allowing them to establish operations close to the fabrication unit and support its manufacturing requirements.
India’s semiconductor policy has also expanded beyond fabrication capacity to cover design and supporting infrastructure. ISM 1.0 led to the approval of 12 facilities, including fabrication and packaging projects, while ISM 2.0 has placed greater emphasis on semiconductor design capabilities.
According to remarks cited by JM Financial, work on ISM 3.0 is also underway. The report identified fabrication, advanced packaging and semiconductor design as areas that will require continued policy support.
Global Equipment Firms Strengthen India Presence
India’s semiconductor expansion is also attracting investments and partnerships from global equipment manufacturers.
ASML is considering bringing advanced lithography capabilities to India as domestic semiconductor manufacturing capacity grows.
Applied Materials has announced its India Vision 2035, which includes a USD 5 billion investment aimed at expanding local supply-chain capacity tenfold and developing a network of more than 100 suppliers.
LAM Research has committed INR 100 billion towards its first vertically integrated silicon-component manufacturing unit in India.
Tata Electronics has also entered into collaborations with around 16 entities spanning materials, packaging and talent development. These partnerships are intended to strengthen capabilities beyond fabrication and build a broader semiconductor supply chain.
Semiconductor Projects Move Towards Production
State-level support is also playing a role in advancing approved semiconductor projects, with governments providing infrastructure such as dedicated power and water supplies.
Tata Electronics secured approvals within 100 days of submitting its proposals, while Gujarat and Assam have supported semiconductor projects through infrastructure development.
Tata Electronics’ Dholera facility is expected to begin commercial operations by 2028. Micron’s semiconductor plant in Sanand began manufacturing in February 2026 and employs more than 2,000 people.
The developments indicate that India’s semiconductor strategy is increasingly focused on building an end-to-end ecosystem spanning fabrication, advanced packaging, equipment, suppliers, talent and design. Strengthening these interconnected capabilities will be critical to supporting the country’s longer-term semiconductor manufacturing and market ambitions.
