India’s semiconductor sector poised for lift-off: Smartphones to space tech

A state-of-the-art national research and development centre for next-generation display devices and optical technologies based on semiconductors is being established by Council for Scientific and Industrial Research at Central Scientific Instruments Organisation (CSIO) in Chandigarh. This centre, named Opto Microelectronic Research Centre, will address the needs of strategic sectors like defence and space, as well as healthcare, telecommunications, and automotive sectors.

The facility, the first of its kind in the country, will initially focus on the design, assembly, testing, and packaging of mini-displays and later move on to other equipment like new types of head-up displays for aircraft. This will fill the gap in the indigenisation of futuristic high-technology gadgets.

“Our aim is to address the existing and future challenges obstructing indigenisation in strategic and commercial display devices and optical technologies and to take a step forward in providing a well-versed research and development ecosystem for the rising semiconductor industries in India,” a scientist at CSIO said.

Importance of semiconductors

Semiconductors have become a critical part of the industry because they are the foundational building blocks of modern electronics, acting as the “hidden brains” that make devices work. They are crucial for a vast array of technologies across different disciplines. Acting as a brain, semiconductor chips help machines take decisions while processing heavy data, giving them iterative direction.

Their ability to control electrical conductivity makes them ideal for use in virtually all electronic devices, ranging from smartphones and computers to cars and spacecraft. Semiconductors are materials whose electrical conductivity lies between that of conductors and insulators. They can behave as either, depending on the conditions and requirements, making them ideal for electronic devices.

This unique property allows them to be used in the creation of tiny electronic chips that control modern devices. Semiconductors are also essential for the development of advanced technologies such as artificial intelligence, edge computing, and 5G communication. A great deal of resources is being devoted to semiconductor technology, and its advancement is fuelling innovation in various fields, leading to smaller, faster, and more powerful electronic devices.

With greater digitalisation and automation in day-to-day activities, semiconductors have become integral to economic security and strategic independence. The acute shortage of chips during the Covid pandemic and its aftermath, as well as the Ukraine-Russia war that affected the manufacture of cars, mobile phones, and other electronics, is a pointer towards this end.

Semiconductors are a major global industry, with a significant economic impact and projected growth. Industry data shows that in 2024, the semiconductor industry grew 19 per cent with chip sales totalling USD 627 billion. The sales are projected at USD 697 billion in 2025 and USD 1 trillion by 2030.

Taiwan, South Korea, Japan, the United States, and China are among the top players in the semiconductor industry. Germany, Netherlands, and Israel also have a significant presence in the semiconductor industry, while other countries like Malaysia and Singapore are making a foray in this field.

Where does India stand

India is among the countries that have set a strong foothold in the semiconductor industry. According to government figures, the Indian industry grew from USD 38 billion in 2023 to USD 45-50 billion in 2024-2025 and is projected to reach USD 100-110 billion by 2030. If so, it would account for about 10 per cent of the global market, up from the estimated 7 per cent at present.

Besides civilian applications, India has a rapidly expanding defence industry and an ambitious space programme. In Chandrayaan 3 Mission, the Vikram lander used Indian-made technology and AI to find a safe landing spot all on its own by executing complex calculations and taking critical decisions.

India has the capacity to emerge as a key contributor to the three primary pillars of the semiconductor manufacturing supply chain: equipment, materials, and services. These include leveraging a strong base of MSMEs to produce components for semiconductor equipment, utilising a rich source of chemicals, minerals, and gases, and providing research and development, logistics, and supply chain services, as well as human talent in AI, big data, cloud computing, and IoT.

In December 2021, the Union Cabinet approved the India Semiconductor Mission (ISM), of which the CSIO centre is a part, with an outlay of Rs 76,000 crore. The programme aims to provide financial support for investments in semiconductor fabrication, display manufacturing, and chip design, as well as skill enhancement to strengthen India’s integration into global electronics value chains and build a strong semiconductor and display ecosystem.

ISM is being implemented by the Ministry of Electronics and Information Technology and associated government agencies in collaboration with various industry associations, research organisations, and educational institutions. Several strategic collaborations with Indian and overseas institutions have also been forged under ISM for training, future skills development, research, fostering innovation, access to advanced labs, internships, and practical exposure.

Capacity building

To foster talent development in semiconductor chip design, the central government has also launched several initiatives, such as a new curriculum by All India Council for Technical Education (AICTE) for VLSI design and technology and integrated circuit manufacturing. The goal is to develop 85,000-strong skilled manpower in the semiconductor design sector and provide special tools to design semiconductor chips.

In May 2025, two state-of-the-art semiconductor design facilities were inaugurated at Noida and Bengaluru, which are India’s first to focus on advanced 3-nanometre (nm) chip design. This marks a significant milestone in the nation’s semiconductor innovation journey, building on previous achievements of 7nm and 5nm designs. To put the size into perspective, the width of a human hair is approximately 80,000 nanometres.

The same month, the cabinet also approved the establishment of another semiconductor unit under India Semiconductor Mission (ISM), which is a joint venture between HCL and Foxconn. This plant, with a design output capacity of 36 million units per month, will manufacture display driver chips for mobile phones, laptops, automobiles, PCs, and numerous other devices that have displays.

At Global Investors Summit 2025, the government announced that India’s first indigenous semiconductor chip would be ready for production this year. Currently, five production units are under construction, signalling a significant milestone for domestic capability.