From Phones to Fabs: How India Is Building a Complete Semiconductor Manufacturing Ecosystem
India’s electronics success story is moving upstream
For more than a decade, India’s electronics manufacturing transformation has been most visible through one product: the mobile phone.
The numbers are extraordinary.
Electronics production has grown from approximately ₹1.9 lakh crore in FY2014-15 to ₹13.11 lakh crore in FY2025-26. Electronics exports have risen from around ₹38,000 crore to ₹4.24 lakh crore over the same period.
Mobile phone production has climbed from just ₹18,000 crore to ₹6.27 lakh crore, while mobile exports have surged from approximately ₹1,500 crore to ₹2.59 lakh crore.
India now manufactures 99.2% of the mobile phones it uses and has transformed from a net importer into a net exporter. Smartphones, which did not even feature among India's top 100 exported commodities in 2014, became the country's largest individual exported commodity in FY2025-26. (The Economic Times)
But India's technology manufacturing ambitions are now moving significantly further upstream.
The next objective is not simply to assemble the devices.
It is to increasingly design, manufacture, package and test the chips inside them.
And that shift could create an entirely new industrial ecosystem in India.
India Is Moving From Electronics Assembly to Semiconductor Manufacturing
Semiconductors sit at the heart of almost every modern industry.
They power smartphones, automobiles, industrial machinery, telecommunications networks, medical devices, defence systems, data centres, artificial intelligence infrastructure and countless connected products.
India's rapid growth in electronics manufacturing has therefore created the foundation for the next stage of the value chain.
The country's semiconductor strategy now spans:
Chip design
Wafer fabrication
Compound semiconductors
Advanced packaging and testing
Semiconductor equipment
Speciality materials and chemicals
Research and development
Talent development
Electronics and systems manufacturing
The theme of SEMICON India 2026, Silicon to Systems: Building the Ecosystem, reflects precisely this transition. (The Economic Times)
The strategy increasingly recognises that a semiconductor industry cannot be created simply by building a handful of fabrication plants.
The entire ecosystem around the chip must develop with them.
A ₹2 Lakh Crore-Plus Policy Commitment
The scale of India's policy commitment has expanded substantially.
The original Semicon India Programme, approved with an outlay of ₹76,000 crore, was designed to develop domestic capabilities across the semiconductor value chain rather than focusing only on fabs.
In July 2026, the government approved Semicon 2.0 with an outlay of ₹1,27,500 crore. (The Economic Times)
Together, the two programmes represent more than ₹2 lakh crore of policy outlay towards building India's semiconductor ecosystem.
Semicon 2.0 is structured around six broad pillars:
Chip design
Semiconductor equipment and materials
Fabrication facilities
Advanced packaging
Research and development
Talent development
This broader approach is important because semiconductor manufacturing is one of the world's most complex industrial ecosystems.
A fab may be its most visible component, but hundreds of businesses, technologies and services are required around it.
12 Semiconductor Projects. More Than ₹1.64 Lakh Crore in Investment.
India's semiconductor ambitions are also beginning to move from policy announcements into physical manufacturing.
As of July 2026, 12 semiconductor manufacturing projects had been approved under Semicon 1.0, representing investments exceeding ₹1.64 lakh crore across six states. (The Economic Times)
The approved projects span:
Silicon fabrication
Silicon carbide fabrication
Gallium Nitride-based Mini/Micro-LED display fabrication
Advanced semiconductor packaging
Memory packaging
Importantly, commercial production has already begun at three facilities: Micron, Kaynes and CG Semi. (The Economic Times)
This represents an important turning point.
India is no longer discussing semiconductor manufacturing only in terms of future investment commitments.
Parts of the ecosystem are now producing commercially.
Dholera Is Emerging as a Major Semiconductor Manufacturing Cluster
One of the most significant projects is Tata Electronics' semiconductor fabrication facility at Dholera, Gujarat, being developed in partnership with Taiwan's Powerchip Semiconductor Manufacturing Corporation.
The project represents an investment of approximately ₹91,000 crore and is designed for a capacity of 50,000 wafer starts per month. (Press Information Bureau)
In April 2026, the government notified a 66.166-hectare Special Economic Zone at Dholera for Tata Semiconductor Manufacturing.
The project is expected to generate approximately 21,000 direct and indirect employment opportunities. (Press Information Bureau)
This is significant from an industrial real estate perspective.
A semiconductor fab of this scale is not simply another factory.
It requires an exceptionally sophisticated surrounding infrastructure ecosystem involving power, water, gases, chemicals, logistics, cleanroom infrastructure, environmental systems and highly specialised suppliers.
As these ecosystems deepen, locations such as Dholera can potentially develop into semiconductor manufacturing clusters rather than remain isolated manufacturing sites.
Sanand Is Developing Its Own Semiconductor Ecosystem
Nearby Sanand is another important location in India's emerging semiconductor geography.
Micron's semiconductor assembly and testing facility represents a capital investment of approximately ₹22,516 crore and is expected to create up to 5,000 direct jobs and 15,000 indirect employment opportunities over five years. (Press Information Bureau)
CG Power, in partnership with Renesas Electronics of Japan and Stars Microelectronics of Thailand, is also developing semiconductor operations in Sanand.
The project was originally approved with an investment of approximately ₹7,600 crore and a planned capacity of 15 million semiconductor units per day. (Press Information Bureau)
The clustering effect is important.
Once multiple semiconductor manufacturers establish themselves within the same geography, the business case strengthens for suppliers of equipment, materials, gases, engineering services, logistics and other specialised inputs to locate nearby.
That is how a semiconductor cluster begins to develop depth.
India's Semiconductor Map Is Becoming More Geographically Diverse
The semiconductor opportunity is not confined to Gujarat.
Approved projects are spreading across multiple states, creating the beginnings of a geographically diverse manufacturing ecosystem.
Tata Semiconductor Assembly and Test is developing a major semiconductor assembly facility in Morigaon, Assam, involving an investment of approximately ₹27,000 crore.
The facility is designed for capacity of around 48 million chips per day and is expected to create approximately 15,000 direct jobs and 11,000-13,000 indirect jobs. (Press Information Bureau)
Other approved semiconductor investments are also extending India's footprint across fabrication, packaging and compound semiconductor technologies.
This diversification matters because semiconductor supply chains require resilience.
The development of multiple manufacturing nodes can reduce geographic concentration while creating specialised regional ecosystems.
The Semiconductor Opportunity Extends Far Beyond the Fab
A semiconductor fab is only one stage in a highly complex value chain.
Before fabrication, chips must be:
Designed.
Simulated.
Verified.
Tested virtually.
After fabrication, they must be:
Packaged.
Tested.
Integrated.
Qualified for end applications.
Surrounding all these activities is an enormous network of specialised suppliers.
These include manufacturers and distributors of:
Speciality chemicals.
Industrial and ultra-high-purity gases.
Silicon wafers.
Advanced materials.
Semiconductor equipment.
Cleanroom systems.
Precision engineering equipment.
Water treatment infrastructure.
Testing equipment.
Automation systems.
Software.
Logistics and supply-chain services.
This is why India's transition from isolated semiconductor projects towards a complete ecosystem could have much broader industrial implications.
Chip Design Is Becoming a Critical Part of the Strategy
India already has a significant base of semiconductor design talent.
The policy objective is increasingly to convert that human capital into domestic intellectual property and commercial semiconductor products.
The Chips to Start-up programme, launched in 2022, aims to develop 85,000 industry-ready semiconductor professionals across undergraduate, postgraduate and doctoral levels. (The Economic Times)
More than 68,000 students have already been trained under the programme.
Electronic Design Automation tools, which are essential for designing, simulating and verifying chips, have been made available across hundreds of academic institutions.
The government has also approved 24 semiconductor design projects for financial support, while 105 startups and MSMEs have received access to industry-standard EDA tools under the Design Linked Incentive scheme. (The Economic Times)
This is a critical component of India's semiconductor strategy.
Manufacturing chips is valuable.
Owning the intellectual property behind those chips can create even greater long-term strategic value.
211 Chips Taped Out by 75 Institutions
The progress within India's semiconductor design ecosystem is becoming increasingly tangible.
By April 2026:
211 chips had been taped out by 75 institutions.
Seven had subsequently been fabricated across various technology nodes, including 12-nanometre designs. (The Economic Times)
At the centre of this effort is the ChipIN Centre at C-DAC Bengaluru, which provides shared access to semiconductor design infrastructure.
Its capabilities include:
EDA tools.
Computing resources.
Fabrication support.
Technical assistance.
Shared infrastructure can dramatically lower the entry barrier for universities, startups and smaller companies that would otherwise struggle to access extremely expensive semiconductor design tools.
India Is Democratising Access to Chip-Design Infrastructure
The scale of participation is notable.
According to figures cited by The Economic Times:
Around 1 lakh individuals from approximately 400 organisations have used shared national EDA infrastructure.
More than 175 lakh hours of tool usage have been recorded.
Six shared wafer runs have enabled 122 chip-design submissions from 46 institutions.
56 student-designed chips have been fabricated, packaged and delivered.
Participating institutions have filed more than 75 patents.
More than 500 IP cores, ASICs and system-on-chip designs are under development. (The Economic Times)
These figures demonstrate that India's semiconductor strategy is attempting to build capability from the ground up.
The objective is not simply to attract foreign semiconductor manufacturers.
It is also to develop domestic design talent, startups, intellectual property and technology capability.
From Sand to Silicon to Systems
SEMICON India 2026 provides a useful representation of how broad the ecosystem has become.
The event includes a new “Sand to Silicon to Systems” Value Chain Experience, designed to demonstrate the semiconductor journey from raw materials and equipment through fabrication, packaging, electronics and finished systems. (The Economic Times)
The fifth edition of SEMICON India is being held from September 17-19, 2026 at Yashobhoomi in New Delhi.
More than 600 exhibitors, including approximately 300 international companies, are expected to participate, alongside delegations from more than 40 countries. (Press Information Bureau)
Country pavilions include:
Japan.
South Korea.
Malaysia.
The Netherlands.
Singapore.
Sweden.
The programme also includes state booths, a startup pavilion, innovation showcases, a student hackathon and workforce-development initiatives. (The Economic Times)
The conference itself covers areas including supply chains, chemicals and materials, manufacturing technology, AI, digital transformation, product design, sustainability, startups, talent and government programmes.
That breadth is intentional.
India's semiconductor competitiveness will ultimately depend on how effectively all these pieces connect.
Semiconductors and AI Are Becoming Part of the Same Infrastructure Story
India's semiconductor push is also converging with another major technology priority: artificial intelligence.
Modern AI systems depend on enormous computing power.
That requires advanced processors, accelerators, memory and high-performance computing infrastructure.
India's IndiaAI Mission has an outlay of approximately ₹10,372 crore, while shared computing capacity had expanded to more than 45,000 GPUs by June 2026. (The Economic Times)
By August 2026, 237 projects had accessed subsidised computing capacity, accounting for approximately 93.18 lakh GPU hours.
India is simultaneously supporting indigenous foundation models, AI datasets, public-sector AI applications and Centres of Excellence. (The Economic Times)
This convergence has strategic implications.
The chips powering AI infrastructure are no longer simply another electronics component.
They are becoming critical infrastructure for the digital economy.
The Global Semiconductor Supply Chain Is Being Reorganised
India's semiconductor push is taking place during one of the biggest shifts in global technology supply chains in decades.
The pandemic exposed the vulnerability created by concentrating semiconductor manufacturing in a limited number of locations.
Chip shortages disrupted industries ranging from automobiles to consumer electronics.
Governments and multinational companies have since sought to diversify semiconductor manufacturing, packaging and critical supply chains. (The Economic Times)
India wants to capture part of this diversification.
Its proposition increasingly combines:
A massive domestic electronics market.
Rapidly expanding electronics manufacturing.
Deep semiconductor design talent.
Government incentives.
Industrial land.
Engineering capabilities.
Growing domestic demand for chips.
A strategic position within global technology supply chains.
The ambition is therefore larger than achieving semiconductor self-sufficiency.
India wants to become part of the global network that designs, manufactures, packages and deploys chips.
International Technology Partnerships Will Matter
India's semiconductor strategy is also becoming increasingly international.
The country participates in initiatives including the Pax Silica coalition, focused on strengthening global silicon supply chains across critical minerals, semiconductor manufacturing and advanced AI infrastructure. (The Economic Times)
This is important because no major semiconductor ecosystem operates entirely in isolation.
The industry depends on highly specialised global networks spanning:
Equipment.
Materials.
Design software.
Intellectual property.
Manufacturing technology.
Capital.
Talent.
End customers.
India's ability to integrate itself into these networks will be as important as building domestic production capacity.
Why Semiconductors Could Reshape India's Industrial Real Estate Market
From a commercial real estate perspective, semiconductor manufacturing is fundamentally different from conventional industrial development.
A semiconductor facility can require extraordinary levels of infrastructure.
Site selection may depend on:
Large, development-ready industrial land parcels
Extremely reliable power
High-quality water supply
Ultra-pure water infrastructure
Wastewater and effluent treatment
Specialised gas infrastructure
Environmental controls
High-quality road and logistics connectivity
Access to airports and ports
Engineering and technical talent
Space for supplier ecosystems
This means semiconductor investments can create demand far beyond the primary fab.
They can catalyse entire industrial clusters.
The Supplier Ecosystem Could Become the Bigger Real Estate Story
The fab attracts attention because of its scale.
But the ecosystem around the fab could ultimately generate a much wider real estate footprint.
Semiconductor clusters require suppliers involved in:
Chemicals.
Gases.
Equipment.
Materials.
Precision engineering.
Packaging.
Testing.
Electronics manufacturing.
Maintenance.
Automation.
Logistics.
Warehousing.
Research and development.
Technical services.
Some need to be located extremely close to fabrication facilities because of supply reliability and operating requirements.
Others may cluster across a broader industrial corridor.
For industrial real estate developers and advisors, this creates an opportunity considerably larger than simply providing land for semiconductor plants.
The long-term opportunity lies in the industrial ecosystem that develops around them.
Semiconductors Could Create a New Generation of Industrial Parks
India's traditional industrial parks have largely been designed around manufacturing requirements such as road access, electricity, water and factory plots.
Semiconductor manufacturing raises the infrastructure benchmark substantially.
Future semiconductor-oriented industrial ecosystems may require:
High-redundancy power.
Specialised water systems.
Centralised utilities.
Sophisticated wastewater treatment.
Speciality gas distribution.
Advanced environmental infrastructure.
High-speed digital connectivity.
Clean manufacturing environments.
Strong security.
Research and innovation facilities.
Supplier-ready industrial plots.
The result could be the emergence of a new generation of highly specialised industrial parks.
For developers capable of delivering this infrastructure, semiconductor manufacturing could become one of the most sophisticated industrial real estate opportunities of the coming decade.
Electronics Manufacturing Provides the Demand Foundation
India's semiconductor ambitions would be considerably harder to justify without its rapidly growing electronics industry.
The country already produces ₹13.11 lakh crore of electronics annually and exports ₹4.24 lakh crore.
The mobile manufacturing ecosystem alone supports approximately 12 lakh jobs, while the broader electronics manufacturing sector supports around 25 lakh direct and indirect jobs. (The Economic Times)
This provides semiconductor manufacturers with something critically important: customers.
Chips manufactured in India can potentially feed into growing domestic production across:
Smartphones.
Automobiles.
Industrial electronics.
Consumer appliances.
Telecommunications.
Power electronics.
Data centres.
Aerospace.
Defence.
AI infrastructure.
As electronics manufacturing expands, the commercial rationale for manufacturing components and semiconductors closer to those customers becomes stronger.
From Finished Products to Components to Chips
The progression of India's electronics strategy can be understood as a movement upstream through the value chain.
The first stage was assembling finished electronics products in India.
The second was increasing localisation of components.
The third is building capability in semiconductors.
The fourth is developing domestic capability across design, equipment, materials and intellectual property.
And ultimately, the objective is to connect these capabilities into complete technology systems.
That is why the theme “Silicon to Systems” matters.
The semiconductor programme is increasingly part of a much larger industrial strategy rather than a standalone technology policy.
What This Means for India's Industrial Geography
Semiconductor investments could also reshape where India's next generation of industrial clusters develops.
Gujarat has emerged as an early leader through Dholera and Sanand.
Assam is building semiconductor packaging capacity at Morigaon.
Other states are competing aggressively for projects across semiconductor manufacturing, electronics, components and supporting supply chains.
Unlike many conventional industries, semiconductor projects can anchor extremely sophisticated ecosystems.
Once a location attracts a major fab or packaging facility, the surrounding infrastructure investment can improve its competitiveness for additional projects.
That can create a powerful clustering effect.
The early semiconductor locations being established today could therefore become some of India's most important advanced manufacturing corridors over the next decade.
What SEMICON India 2026 Is Really Testing
India has now assembled many of the individual components required for a semiconductor industry.
There is policy support.
There is a rapidly expanding electronics manufacturing base.
There are 12 approved semiconductor projects with investments exceeding ₹1.64 lakh crore.
Three projects have entered commercial production.
There is an expanding design ecosystem.
Universities and startups have access to semiconductor design tools.
India possesses deep engineering talent.
AI infrastructure is expanding rapidly. (The Economic Times)
The challenge now is integration.
Can India develop enough suppliers around its fabs?
Can domestic companies build globally competitive semiconductor intellectual property?
Can advanced packaging capabilities deepen?
Can the country create a sufficiently large pipeline of specialised talent?
Can domestic companies integrate into global semiconductor supply chains?
And can industrial infrastructure scale quickly enough to support this growth?
These questions will determine whether India's semiconductor push evolves from a collection of individual investments into a globally competitive ecosystem.
The CRE Perspective: A New Advanced Manufacturing Opportunity
For India's industrial real estate market, semiconductors represent something larger than another manufacturing sector.
They demonstrate where advanced manufacturing is heading.
Future occupiers will increasingly evaluate industrial locations based not simply on land price and highway connectivity, but on the sophistication of the surrounding infrastructure.
Power quality.
Water security.
Environmental infrastructure.
Technical talent.
Supplier availability.
Research ecosystems.
Global logistics connectivity.
Expansion potential.
These factors will increasingly determine which industrial corridors attract the world's most sophisticated manufacturing investments.
Semiconductor manufacturing sits at the extreme end of this transformation, but many of these requirements will increasingly apply across electronics, EVs, batteries, aerospace, biotechnology and other advanced industries.
Looking Ahead: From Phones to Fabs, and From Fabs to Ecosystems
India's electronics transformation over the past decade provides the foundation.
Electronics production has risen from ₹1.9 lakh crore to ₹13.11 lakh crore.
Mobile phone production has increased from ₹18,000 crore to ₹6.27 lakh crore.
Mobile exports have jumped from ₹1,500 crore to ₹2.59 lakh crore.
India now manufactures 99.2% of the mobile phones it consumes. (The Economic Times)
The next chapter is significantly more ambitious.
Under Semicon 1.0, 12 semiconductor projects representing more than ₹1.64 lakh crore of investment have been approved, with three already in commercial production. Semicon 2.0 adds another ₹1,27,500 crore policy outlay to deepen capabilities across design, fabs, packaging, equipment, materials, R&D and talent. (The Economic Times)
But India's semiconductor success will ultimately not be measured simply by the number of fabs it builds.
It will be measured by whether those fabs become anchors for complete industrial ecosystems.
Design companies.
Materials suppliers.
Equipment manufacturers.
Packaging facilities.
Engineering firms.
Research centres.
Electronics manufacturers.
AI infrastructure.
Talent.
And the specialised industrial real estate needed to connect all of them.
For CRE Consultants, this is what makes India's semiconductor journey particularly significant.
The shift from phones to fabs is also a shift from conventional electronics assembly towards high-value, infrastructure-intensive advanced manufacturing.
And if India succeeds in connecting silicon to systems, the semiconductor opportunity could help create an entirely new generation of industrial clusters across the country. (The Economic Times)
