India's Semiconductor Breakthrough: First Made-in-India Chip by 2025

India is on the cusp of a historic milestone in its technological journey, with the country set to launch its first domestically manufactured semiconductor chip by the end of 2025. This achievement marks a pivotal moment in India’s quest for self-reliance and positions the nation as a rising player in the global semiconductor industry.

Prime Minister Narendra Modi announced the breakthrough at the Semicon India 2025 conference, highlighting that commercial chip production will commence this year. Test chips from global giants like Micron Technology and Tata Electronics are already in production, signaling rapid progress in India’s semiconductor capabilities. The inauguration of CG Power’s Outsourced Semiconductor Assembly and Test (OSAT) facility in Sanand, Gujarat, in August 2024, laid the foundation for India’s first end-to-end semiconductor production, with the first “Made in India” chips expected to roll out soon.

The Indian government’s ambitious India Semiconductor Mission (ISM), backed by a ₹76,000 crore investment, has catalyzed this transformation. The mission has approved ten major projects across six states, spanning fabrication, assembly, and testing facilities. These investments are projected to create a daily production capacity of 90 million chips once fully operational. The government has also committed nearly ₹629 billion (US$7.17 billion) in incentives, with the remaining funds reserved for smaller projects.

India’s semiconductor market, valued at US$38 billion in 2023, is projected to reach US$45–50 billion in 2024–25 and could double to US$100–110 billion by 2030. This growth is driven by rising demand in sectors such as artificial intelligence, electric mobility, defense, and next-generation telecom networks. The Design Linked Incentive (DLI) scheme has further boosted the ecosystem, supporting 23 design projects, 278 institutions, and 72 startups, while training over 100,000 engineers in design and process technology.

India’s first commercial chips will utilize 28nm to 90nm technology nodes, which are well-suited for automotive systems, industrial equipment, and consumer electronics. Notably, eight of the first 20 chipsets were designed by students, primarily from IIT-Hyderabad, showcasing India’s strength in design and innovation. The Vikram 32-bit processor, India’s first fully indigenous microprocessor developed by ISRO’s Semiconductor Lab, was recently presented to the Prime Minister, underscoring the country’s growing design and manufacturing prowess.

Major global firms, including Intel, AMD, Qualcomm, NXP, and Texas Instruments, are investing in India’s semiconductor push. The Union Cabinet recently approved four new semiconductor projects worth ₹4,594 crore, with Intel and Lockheed Martin among the backers. These projects will be set up in Odisha, Punjab, and Andhra Pradesh, further diversifying India’s semiconductor footprint. Additionally, India has inaugurated its first centers for advanced 3-nanometer chip design in Noida and Bengaluru, marking a leap in R&D capabilities.

India’s semiconductor ambitions are not limited to manufacturing. The India AI Mission, launched with a budget outlay of ₹10,371.92 crore over five years, aims to make India a global leader in artificial intelligence. The mission has already expanded the country’s computing infrastructure to 38,000 GPUs, providing affordable access to world-class AI resources.

As India’s semiconductor sector expands, the country is consolidating into distinct regional hubs in Gujarat, Tamil Nadu, and Karnataka. These hubs mirror the factors that have driven semiconductor clusters in the United States, with state-backed incentives, university-industry partnerships, and targeted infrastructure investment. India’s emergence as a trusted production base outside East Asia is attracting global partnerships and supplier integration plans, compressing the learning curve from years to months.

India’s semiconductor moment has arrived, and the country is poised to become a global leader in both manufacturing and design. Sustaining this momentum will depend on reliability, skills, and partnerships that build a trusted design-to-manufacturing ecosystem. For businesses and investors, India’s semiconductor revolution offers unprecedented opportunities for growth and innovation.

Written by Deepak Periyasamy.

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