The Rise of India's Semiconductor Mission: Can It Rival Taiwan?

The question feels almost audacious. Taiwan — an island of 23 million people — controls approximately 90 percent of the world's most advanced chip production. India — a nation of 1.4 billion with a storied engineering tradition — is just learning to walk in this industry. And yet, the conversation about India becoming a serious player in global semiconductors is no longer hypothetical. It is a policy priority backed by real money, real factories, and real deadlines.

India's ₹76,000 Crore Bet

The India Semiconductor Mission (ISM), launched under the $10 billion (roughly ₹76,000 crore) Production Linked Incentive scheme for semiconductors, is the centrepiece of the country's chip ambitions. The scheme covers semiconductor fabrication units (fabs), display fabs, compound semiconductors, silicon photonics, and chip design — an unusually broad mandate that reflects both India's eagerness and its uncertainty about where its comparative advantage will ultimately lie. 

The first concrete milestone arrived in February 2024, when Prime Minister Narendra Modi laid the foundation stone for three semiconductor projects simultaneously: a Tata Electronics fab in Dholera, Gujarat (targeting 28nm and above chips at an investment of ₹91,000 crore), a Tata-PSMC joint venture in Morigaon, Assam (a $2.75 billion compound semiconductor facility), and a CG Power-Renesas-Stars Microelectronics assembly and test unit in Sanand, Gujarat. 

Where India Actually Has an Edge

The honest assessment is that India is not going to challenge TSMC at 2nm or 3nm process nodes in this decade, or likely the next. That race requires decades of accumulated process knowledge, yield engineering expertise, and supply chain ecosystems that cannot be bought or built quickly. But the semiconductor value chain is vast, and India has genuine, underappreciated strengths in specific segments. Chip design is the most obvious. India is already home to the R&D centres of virtually every major global semiconductor company. Qualcomm, Intel, Texas Instruments, NXP, and Broadcom all have large design teams in Bengaluru, Hyderabad, and Pune. India produces approximately 20 percent of the global semiconductor design workforce. The ISM's design incentive scheme — offering up to 50 percent reimbursement on capital expenditure for design startups — is explicitly designed to turn this latent capacity into indigenous intellectual property.

Packaging and Testing: The Overlooked Opportunity

Advanced packaging — the process of assembling multiple chips into a single module — is one of the hottest areas in the global semiconductor industry right now. Companies like Apple, AMD, and NVIDIA are increasingly relying on chiplet architectures that require sophisticated packaging solutions. This is a segment where India can realistically compete within five years. 

The CG Power-Renesas facility in Gujarat is an early indicator of this direction. Assembly, testing, marking, and packaging (ATMP) facilities are less capital-intensive than fabs, can be built faster, and still represent significant value in the chain. India's manufacturing discipline, improving infrastructure, and lower labour costs relative to established ATMP hubs like Malaysia and the Philippines make this a credible path.

The Taiwan Comparison: Honest and Unflinching

Can India rival Taiwan? Not in the near term, and not by copying Taiwan's model. Taiwan built its semiconductor supremacy over 50 years through an extraordinary combination of government strategy, industrial clustering, engineering culture, and geopolitical circumstance. What India can do is carve out a distinct, complementary role in the global supply chain — one that serves the world's desire to diversify away from concentration in East Asia. 

The US CHIPS Act, Japan's semiconductor revival, and Europe's Chips Act have all created a geopolitical opening for India. The question is whether Indian institutions — government agencies, academia, and private enterprise — can execute with the kind of discipline and speed that the window demands. The foundations are being laid. The cement is still wet.