The rise of india’s chip industry

India's semiconductor industry is undergoing a revolutionary phase driven by rising demand from industries like consumer electronics, automotive technologies, industrial automation, and telecom infrastructure. According to IMARC, India semiconductor market size is approximated at USD 53.2 Billion in 2024 and is anticipated to grow to USD 161.0 Billion by 2033, driven by positive government support, increasing digital penetration, and a drive to localize chip making through the Semiconductor Mission as well as initiatives such as "Make in India". Moreover, the industry is also being supported by strategic foreign investments and the establishment of semiconductor fabrication and assembly facilities to reduce reliance on imports. Semiconductors are at the heart of virtually all contemporary technologies facilitating capabilities in smartphones, computers, medical equipment, electric vehicles, and connectivity networks. They are also critical to the emergence of artificial intelligence (AI), Internet of Things (IoT), 5G networks, and data centers. These chips not only boost operational efficiency and innovation but also strengthen national competitiveness and economic resilience by enabling advanced manufacturing and reducing reliance on foreign technology. As India aspires to be a world leader in semiconductor production and design, the sector is critical in determining the future digital economy. It is therefore a strategic pillar for sustainable, innovation-driven development over the next decade.

Inside the Boom: Emerging Trends in India’s Chip Industry

India’s Path to Building a Homegrown Semiconductor Industry

India's targeted push towards indigenous chip manufacturing has gained strength through government-initiated programs such as the Production Linked Incentive (PLI) program. This scheme is expected to reduce reliance on imports and develop a domestic value chain that is robust. With greater investments in design, fabrication, and packaging, the industry is witnessing the emergence of advanced infrastructure. According to recent findings, in May 2025, India launched its first locally developed Shakti RISC-V microprocessor, for use in IoT and edge devices as part of System-on-Chip (SoC), a key milestone for Indian chip companies and domestic chip manufacturing initiatives. Furthermore, policies supporting capital aid, efficient regulatory mechanisms, and skill-building are driving this change. Consequently, top Indian semiconductor companies are increasingly establishing themselves as globally competitive players, supporting national technological self-sufficiency while catering to the growing demand of industries like electronics, telecommunications, and industrial automation.

India Taps Global Partnerships

India is entering strategic collaborations with leaders in the global semiconductor industry, including the United States, Taiwan, and Japan. These partnerships facilitate technology transfer, research synergies, and talent exchange key drivers for ecosystem growth. As per The KGP Chronicle, in May 2025, IIT Kharagpur entered into an MoU with Singapore's Institute of Microelectronics of A*STAR at SEMICON Southeast Asia 2025 to promote semiconductor R&D, talent development, and global collaboration in cutting-edge chip technologies. In alignment with this initiative, the agreement also paves the way for co-development of leading-edge semiconductor processes and chip design strength. Cross-border partnerships assist India in becoming a semiconductor hub, with greater reliability in international supply chains. One of the standout effects is the faster expansion and exposure of Indian semiconductor manufacturing companies are now enjoying amplified access to advanced front-end technologies and worldwide markets through collaborative ventures and joint manufacturing projects.

How Smart Tech Is Powering Semiconductor Growth Across 5G Automotive and IoT

Technological developments within autonomous cars, 5G, and the Internet of Things (IoT) are driving strong semiconductor demand in India. Sensors, microcontrollers, and real-time communication chips' integration is crucial to facilitate operational efficiency in these applications. This industry growth represents a premium opportunity for chip design and embedded systems to expand domestically. With smart mobility and digital infrastructure on the rise, top Indian semiconductor companies in India are investing in capabilities for future-proofed chipsets. As per the reports, in June 2025, Ericsson added more than 150 R&D positions in Bengaluru to boost Application-Specific Integrated Circuit (ASIC) and System on Chip (SoC) design, deepening India's semiconductor ecosystem and 5G infrastructure development capabilities. These efforts will play a key role in filling the domestic supply-demand gap while fulfilling the changing needs of high-growth sectors dependent on semiconductor innovation.

Laying the Foundation with Policy Support and Government Initiatives

The Indian government has launched several policy reforms and financial programs to support the growth of the semiconductor industry. Programs such as Digital India and the Semiconductor Mission focus on research and development (R&D), infrastructure building, and foreign investment inflow. According to the recent reports, in May 2025, India gave its nod for its sixth semiconductor fab—a joint HCL-Foxconn facility near Jewar—under the India Semiconductor Mission. Five more facilities are also being built, taking the nation's indigenous chip production drive further. Moreover, these initiatives aim to strengthen technological independence and make India a central hub in the international semiconductor network. Capital subsidisation, speedier clearances, and skill enhancement measures are attracting international investors. These investments have helped foster a pro-innovation and scale-friendly environment. As a result, top Indian semiconductor companies are benefiting from enhanced ease of doing business, allowing them to scale operations and compete fairly on the global map.

AI and EV Revolution Powering the Semiconductor Surge

With artificial intelligence (AI), electric vehicles (EVs), and smart devices gaining traction, the demand for energy-efficient, high-performance semiconductors is increasing in India. All these technologies need powerful computing, small chip packaging, and real-time processing, which is made possible by semiconductors. The use of AI applications in healthcare, finance, and logistics, as well as India's EV drive, is driving demand for sophisticated microchips. Besides, consumer demand for wearables and smart home technology is fueling ongoing innovation. To this end, Indian chip makers are aligning product creation with these trends, solidifying their position as key players in India's technological landscape and digital self-reliance ambitions. As per the Times of India, in May 2025, India joined the development of advanced semiconductors when Renesas Electronics opened 3nm chip design facilities in Noida and Bengaluru, representing the country's maiden first entry next-gen chip innovation.

Mapping Market Segments Across Regions:

Top Product Picks Shaping the Market

• Memory Chips: Memory chips contain digital information utilized by computers and electronic devices. Memory chips consist of DRAM and flash memory, which are indispensable for temporary and extended storage. Commonly implemented in smartphones, PCs, and servers, they facilitate effortless data processing and multitasking, boosting performance in consumer electronics, automotive, and data center markets.
• Logic Chips: Logic chips run instructions and control processes in electronic systems. They consist of programmable logic devices (PLDs) and application-specific integrated circuits (ASICs), which provide customized processing. Used in mobile phones, industrial controls, and communications systems, they provide device intelligence, automation, and efficiency in industries such as IoT, robotics, and automotive.
• Microprocessors: Microprocessors are CPUs on a single chip, responsible for logic, arithmetic, and control operations within computers and smart devices. These are a must in PCs, smartphones, and embedded systems, as they provide multitasking and enhanced system performance. Advances in technology keep their speed, power efficiency, and AI capabilities improving.
• Analog Devices: Analog chips convert actual-world signals such as sound, temperature, and pressure into digital information. Used in sensors, amplifiers, and signal converters, they are critical to communication, health care, automotive, and industrial systems. Smart infrastructure, wearable technology, and power-saving systems benefit from analog semiconductors as the need for precision and connectivity increases.

Unlocking Value Across End-Use Sectors

• Consumer Electronics: Semiconductors drive everyday devices such as smartphones, laptops, tablets, and smart TVs. They facilitate high-speed processing, energy efficiency, and miniaturization. Rising demand for smart home appliances, wearables, and gaming consoles fuels semiconductor integration for increased functionality, AI capabilities, and enhanced user experience in digital consumer products.
• Automotive: It relies semiconductors for safety, infotainment, battery management, and advanced driver-assistance systems (ADAS). Electric vehicles (EVs), autonomous driving, and car connectivity have driven chip demand. They provide smart control, reduced emissions, and real-time responsiveness, and semiconductors are essential for tomorrow's mobility and next-generation transportation technologies.
• Telecom: The telecommunications industry employs semiconductors in wireless communication systems, network infrastructure, and mobile devices. Chips facilitate 5G, data routing, signal processing, and optical transmission. With increased high-speed connectivity and data consumption, semiconductors provide optimal bandwidth management, low latency, and secure global communication networks for personal and industrial usage.
• Industrial: Semiconductors are applied in industry to automate, robotize, power electronics, and control systems. Manufacturing, energy, and logistics applications demand rugged, high-performance chips for precision and efficiency. With Industry 4.0, there is increased demand for semiconductors that enable smart factories, predictive maintenance, and digital twins, enhancing operational productivity and data-driven decision-making.

Territorial Trends and Market Performance

• Gujarat is quickly transforming into one of India's leading semiconductor centers with significant investment in fabrication plants and assembly facilities. Major projects, such as Tata-PSMC's fab, are hosted by the Dholera Special Investment Region (SIR). Robust infrastructure, active governance, and industrial corridors place Gujarat at the fulcrum of India's semiconductor manufacturing plans and export drive.
• Karnataka, especially Bengaluru, is India's semiconductor design and research and development (R&D) hub. With the best engineering minds, global design houses, and pro-policies, the state nurtures fabless firms and chip design innovation. With its strong support system of electronics ecosystem and research institutions, Karnataka is a choice destination for semiconductor start-ups and international collaborations.
• Tamil Nadu is emerging as a key semiconductor assembly and testing destination, supported by industrial parks, strong logistics, and skilled workforce. Chennai’s electronics cluster and state initiatives attract investments in OSAT and ATMP facilities. The government’s push for electronics manufacturing aligns with India’s broader goal of semiconductor self-reliance.

Sculpting Tomorrow: How India’s Semiconductor Sector Is Redefining the Market Landscape

According to IMARC, India's semiconductor industry is set to expand at a CAGR of 12.45% from 2025 to 2033 on account of rising digitization in industries and taking up of advanced technologies like AI, machine learning, and quantum computing. Growing use of semiconductors in defense, healthcare, and renewable energy also complements long-term demand. The growth of fabless design startups and improved testing and assembly facilities are unfolding new market opportunities, backed by both domestic and foreign investments. Most important drivers are electronics manufacturing base growth exhibiting strong growth, growth in electric vehicles, and swift expansion of digital infrastructure. Government policies such as "Make in India" and the Production Linked Incentive (PLI) program are driving local chip demand, whereas 5G deployment, data centers, and cloud computing are accelerating the demand for high-speed semiconductors. Despite this, challenges for the sector include restricted access to sophisticated fabrication technologies, ongoing dependency on imported equipment, and a shortage of skills in chip design and engineering. Overcoming these limitations through workforce development and ecosystem cooperation is important in achieving a self-sufficient and competitive India semiconductor industry.

Insights That Shape the Strategy

India's semiconductor industry is experiencing robust growth, led by favorable government policies, growth in foreign direct investment, and growing demand from industries like consumer electronics, automotive, and telecommunications. Initiatives such as the India Semiconductor Mission and focus on domestic production are accelerating capability building in design, fabrication, and packaging. Strategic international collaborations are augmenting technology access and infrastructure development. With focus on research excellence, qualified talent, and supportive policies, India is developing a robust and innovation-driven semiconductor ecosystem. The country is steadily positioning itself as a key player in the international semiconductor value chain and advanced technology ecosystem.

In the future, creating strong domestic capabilities, supporting innovation, and maintaining supply chain resilience will be crucial in consolidating India's semiconductor ecosystem. For investors venturing into indigenous chip production trends, international technology partnerships, or infrastructure development, the IMARC Group offers customized market insights and strategic studies. With extensive understanding of semiconductor innovations, investment trends, and policy environments, IMARC offers actionable insights capable of identifying areas for growth as well as sector-specific risk management. This empowers businesses, investors, and policymakers to make data-driven decisions and support India's larger vision of becoming a technology-led and globally competitive electronics and semiconductor manufacturing hub.