It is called a ‘chip’, though it is thinner than the favourite potato chip you snack on. And, what India’s entrepreneurs and workforce choose to do with it in the coming years could well shape the country’s destiny.
This is no exaggeration.
Innovations in circuitry, chip design and packaging in recent years have made semiconductors—the accurate term for chips—the invisible engines of the modern world. They power your smartphone, the car you drive, the television you watch, and even the washing machine you use.
Today, a small car can contain more than 500 chips. In an electric vehicle, that number can go up to 5,000, managing everything from motor control and power conversion to the touchscreen infotainment system.
As the world evolves into a geek’s dream (or nightmare), semiconductors are becoming the foundation of a brave new era of connected devices and machine intelligence. They act as the ‘brains’ that power industrial machinery, medical devices, data centres, power grids, radars, drones and missiles.
Most importantly, advanced chips form the backbone of the massive computing power driving breakthroughs in artificial intelligence (AI). They have become so strategically important that countries like the US have imposed restrictions on the export of certain high-end AI chips.
As semiconductors become the most powerful pawn in the new global strategic order, India, too, has recognised the importance of this technology. The country abandoned its ‘import-only’ approach with the launch of the India Semiconductor Mission (ISM) in late 2021—an ambitious effort to transform India from a bystander to a serious player in the global chip race.
Nearly four years later, the results are beginning to show. In a major boost for the Union government and Union Electronics and IT Minister Ashwini Vaishnaw—who tied his reputation to this build-from-scratch moonshot—the first batch of semiconductor manufacturing plants began operations this summer. Prime Minister Narendra Modi inaugurated two semiconductor assembly and testing facilities in Gujarat in recent weeks: one by US-based Micron and the other by electronics manufacturing services company Kaynes. “This is the time to shape the tech landscape of the future. I call this decade ‘India’s Techade’,” the prime minister said while inaugurating the Kaynes facility in Sanand on March 31. “The India of the 21st century is not just witnessing change, but moving forward with the resolve to lead it.”
The eventual aim? Transform India from a net importer into a major manufacturing hub capable of producing eight crore chips a day once current facilities become fully operational.
“We have a great engineering talent pool, but we have always helped foreign companies build products—which means the intellectual property rights remained with them,” said R.K. Patil, CEO of Vayavya Labs, an engineering services and products company focused on automotive, semiconductor and embedded systems. “Indian companies were never challenged enough to go and invest in unique R&D opportunities to build a product.”
As an example, Patil points to China, which started with semiconductor manufacturing but systematically worked towards developing its own intellectual properties and integrating them into its existing manufacturing prowess.
Central to India’s fab dream (pun intended) are young engineers like Deepa Jayasri. A gold medallist from her engineering college in Andhra Pradesh, Deepa was recruited straight out of college by Kaynes, one of the first companies to establish a chip facility under ISM.
She was trained from basics, including OSAT, or outsourced semiconductor assembly and test, the particular aspect of chip making which involves how the basic silicon chip is assembled.
The training helped her understand the strategic importance of semiconductors. “We got to know how we used to get chips from abroad, what their uses are and how now we are [trying to] make them here. As I am from an electronics and computer science background, I got interested,” she said.
Companies like Kaynes realised early on that making a start in a greenfield sector like semiconductor manufacturing required engineers with the right skills. Since India simply did not have enough engineers trained in chip manufacturing, the workforce had to be created from scratch.
“Skilled manpower was a problem. Raw material was a problem. Everything was a problem [when we started out],” said Raghu Panicker, CEO of Kaynes. His solution? Recruit fresh graduates like Deepa and get experts from abroad to train them. One such recruit is Asad Sadique, a diploma holder in computer science from Bharuch, Gujarat. “I underwent OSAT training for a few months—hands-on training under senior engineers in the R&D department,” said Asad. “I was assigned to the copper wire bonding machine.”
Wire bonding—often done using copper or aluminium—is the process of creating electrical connections between the semiconductor die and the lead frame.
Deepa was trained by experts from countries such as Malaysia and the Philippines. But beyond the technical skills, she said what motivated her most was the realisation of how important the semiconductor mission was for India. “I got interested when I realised India was now trying to manufacture our own wafers, our packing, our integrated circuits, etc—all in our own country,” she said.
After training, employees were allowed to choose the section of the assembly line they wanted to work in. “After that, we were given hands-on, eye-on training, and now we are assisting in the production process,” said Deepa.
It is this sense of purpose—of helping build a national capability from the ground up—that has been a big motivator for many people entering this sector. Raunak, son of a farmer from Chapra, Bihar, joined to work on research and product development. Whether it is a fresher like Raunak saying, “I like research and have a passion for innovation”, or an experienced professional like Partha De—who returned to India after stints in the Middle East and Europe to become facilities engineering director at Micron—the sentiments are strikingly similar.
For now, India may have found a workaround to its manpower shortage by combining fresh engineering talent with international expertise. But scaling up would require a much more planned approach.
The stakes are very high. Tata’s ambitious semiconductor fabrication plant in Dholera, Gujarat—expected to begin operation later this year—will manufacture chips from scratch. It is among ten projects approved with government support under ISM with a total investment of around Rs1.6 lakh crore.
But it is just the beginning. Finance Minister Nirmala Sitharaman allocated Rs1,000 crore in this year’s budget to kick off ISM 2.0, the contours of which are set to be announced soon. The next phase aims to not just establish fabrication plants, but to create a completely self-reliant ecosystem for semiconductors to be made in India—including manufacturing equipment, specialty chemicals and full-stack chip design.
The ambition is lofty: meet 75 per cent of chip demand domestically by 2030 (today, nine out of ten chips are imported) and become one of the world’s top five semiconductor producers by 2035.
Achieving that vision will require far more than accidental talent discovery. The software-first engineering ecosystem that powered India’s IT revolution may not be enough for the deep-tech manufacturing era that is now unfolding.
“As India scales its deep-tech manufacturing, the talent demand is shifting from general software coding to specialised industrial engineering,” said Shree Harsha, senior sales director (growth industries) of Dassault Systèmes, a multinational tech giant. “We are seeing a critical gap in ‘process literacy’—the ability to manage the intricate physics of a semiconductor shop floor, where professionals [need to] understand the convergence of electronics, chemistry, and manufacturing.”
Public-private partnerships may offer part of the solution. “Companies currently investing into semiconductor manufacturing in India are getting into collaboration with academic institutes to bring semiconductor focused courses into the curriculum,” said Kathir Thandavarayan, partner, Deloitte India. “Secondly, the government is also coming out with semiconductor-specific courses. We also see a third angle [of] academia on its own coming out with semiconductor-specific curriculum when they see a significant opportunity of talent requirement.”
Kaynes is planning school outreach programmes and on-ground, seminar-style job workshops. “For the general public to understand the semiconductor industry, complex processes need to be explained in simple, accessible language,” Panicker said. “Content needs to be readable and relatable. A step-by-step social media content plan is being developed to maintain public awareness.”
The leapfrogging of technology has left conventional curricula lagging behind. “Only 45-50 per cent of graduates are considered employable, exposing a widening gap between what institutions teach and what industry needs,” said Ankur Jain, cofounder and chief business officer of Sunstone, a leading private education provider.
According to Jain, there needs to be an institutional shift from degree-centric to skill-centric education, where continuous curriculum updates, hands-on learning and employer integration are non-negotiable. “Institutions must also focus on building strong foundations in communication, critical thinking and problem-solving, while enabling students to develop project portfolios and certifications, which are increasingly preferred by employers over academic scores alone,” he said.
Ironically, despite India’s late start in manufacturing, there is one area in the semiconductor ecosystem where Indians dominate—in chip design and R&D. About 20 per cent of all chip designers are Indians, though many work for giants like Nvidia, Intel and AMD. Along with a vigorous push for creating a future-ready workforce, one area the second phase of ISM could strive for could be creating truly ‘Made in India’ semiconductor brands.
As India’s semiconductor journey begins to gather momentum, there is excitement spreading across the business world, manufacturing sector and academia. The new initiatives are expected to trigger a chip revolution akin to the IT revolution—creating new jobs and technologies, and generating wealth.
If that happens, Vaishnaw may well be remembered as one of the most consequential ministers of this government.