In recent years, in the current context of the global semiconductor industry's anti globalization wave and geopolitical games, India is rising at an impressive speed as the core coordinate of the strategic layout of international chip giants.
From Renesas Electronics announcing the launch of 3nm advanced process research and development in India, to Texas Instruments settling its smallest MCU design team in Bangalore, to Foxconn partnering with HCL to build a semiconductor packaging base A 'India fever' is unfolding across the entire industry chain of chip design, manufacturing, and packaging.
Indian semiconductor, lively now
Renesas 3nm, strong entry into India
On May 13, 2025, Japanese semiconductor giant Renesas Electronics launched two 3nm chip design centers in Noida and Bangalore, India. This is India's first 3nm chip design project and marks a crucial step in its semiconductor ambitions.
Renesas 3nm Design Center focuses on the research and development of automotive grade and high-performance computing chips, with plans for mass production in the second half of 2027. The project has received strong support from the Indian government, with over 270 academic institutions receiving EDA software and learning kits for engineer training. Renesas plans to increase its workforce in India to 1000 by the end of 2025 and collaborate with over 250 academic institutions and startups through its "Semiconductor Program" and "Production Linked Incentive Program (PLI)". In the manufacturing process, Renesas, together with India's CG Power and Thailand's Star Microelectronics, has invested 76 billion rupees (approximately 920 million US dollars) in Gujarat to build an outsourcing packaging and testing plant, focusing on defense and space chip packaging. It collaborates with Tata Group's 28nm wafer fab to build a "design manufacture package" full industry chain.
Renesas focuses on end-to-end capability expansion and hopes to obtain a 50% financial subsidy through cooperation with the Indian government, while deeply integrating into the Indian talent development system. India plans to train 85000 VLSI engineers and support 100 startups within five years, with the goal of building India into Renesas' second-largest global research and development base. The Indian Ministry of Electronics and Information Technology sees it as a 'major leap' in the semiconductor roadmap, aiming to achieve a semiconductor output value of $109 billion by 2030, accounting for 10% of the global market.
However, the project implementation faces many challenges. In the manufacturing process, the precision requirements for 3nm process equipment are extremely high, and only a few companies such as TSMC and Samsung can mass produce it globally. Renesas plans to outsource to TSMC for outsourcing, but geopolitical risks may affect the stability of outsourcing. On the supply chain, India's domestic system is not perfect, and the supply of raw materials and equipment relies on imports, resulting in high and unstable costs. On the technical level, although India has a large group of engineers, they lack high-end design experience and currently only have mature process design capabilities. The 3nm process has extremely high requirements for transistor density and energy efficiency optimization, and there is a lack of IP libraries and design toolchains locally, requiring external support.
The ambition and challenges of India's semiconductor industry coexist, and the landing of Renesas' 3nm design center is an important progress. However, whether it can overcome manufacturing dependence, supply chain difficulties, and technological shortcomings in the future will determine whether it can truly occupy a place in the global semiconductor landscape.
Foxconn and HCL Joint Venture: Building Semiconductor Packaging Plant in India
On May 14, 2025, the Indian Cabinet approved the joint venture between Foxconn and HCL Group to build a semiconductor packaging plant, with a total investment of 37.06 billion rupees (approximately 435 million US dollars), located at Jawar Airport in Uttar Pradesh, and expected to start production in 2027. The project is divided into two phases, with the first phase focusing on packaging testing and the second phase upgrading to a complete manufacturing factory, ultimately achieving a monthly production capacity of 20000 wafers and 36 million display driver chips.
In terms of technology and product planning, in the initial stage of the project, we will provide downstream services for overseas chips to avoid the shortcomings of domestic manufacturing in India; The second phase will shift towards the manufacturing of display driver chips, covering fields such as mobile phones and automobiles, forming a vertically integrated ecosystem of "chip module whole machine" with Foxconn's iPhone assembly plant in India. The project is deeply tied to Apple's supply chain restructuring needs. Currently, Indian made iPhones account for 20% of US imports, and Apple plans to expand production capacity in India to cope with geopolitical risks. Foxconn not only responds to Apple's "Made in India" strategy, but also reduces import tariffs on electronic components by 20% through localized chip supply. Its panel factory, which cooperates with Innolux Optoelectronics, will also collaborate with packaging factories to promote localization of the display industry chain.
This project is the sixth semiconductor manufacturing project approved by India, supported by the "Semiconductor Plan" policy. The Indian government provides capital subsidies, land concessions, and tax exemptions, and Uttar Pradesh also grants exemptions from electricity taxes and grants for skills training. Foxconn holds 40% of the shares and HCL Group holds 60%. Both parties plan to adopt a "technology introduction+local operation" model to build automotive electronic manufacturing capabilities, and plan to build two more wafer fabs and one packaging plant in the future. As of May 2025, the project has completed company registration and site survey, and is expected to start infrastructure construction by the end of the year. HCL Group is in talks with NXP and Tesla to establish OEM cooperation for automotive display driver chips.
However, the project faces multiple challenges. India lacks sufficient accumulation of display driver chip technology, and although Foxconn has introduced panel technology, chip design relies on external IP authorization. In addition, the global market is dominated by Samsung and LG, and Foxconn needs to break through technical indicators to enter the mainstream supply chain. Moreover, India can only absorb 30% of its domestic production capacity, and the remaining capacity depends on exports. Geopolitical risks may affect order stability.
Overall, this cooperation is an important attempt for India's semiconductor "differentiation breakthrough". If mass production goes smoothly, it is expected to form regional advantages. However, to achieve a leap from "packaging and testing" to "independent design and manufacturing", many bottlenecks such as technology and production capacity still need to be overcome.
TSMC to build its first 12 inch wafer fab in India
In September 2024, TSMC signed a contract with India's Tata Electronics to jointly build India's first 12 inch wafer fab in Gujarat, with a total investment of $11 billion and a monthly production capacity of 50000 wafers. It is expected to start mass production in 2026. This project is not only a milestone in semiconductor manufacturing in India, but also a key part of TSMC's global layout.
TSMC is responsible for the design and construction of wafer fabs, transfer of mature process technology (28nm and above processes), and talent training, while Tata Group undertakes over 90% of investment and operational management. Both parties will build a full industry chain ecosystem of "design manufacturing packaging" through a "technology authorization+local operation" model. The factory focuses on automotive grade, panel drivers, and high-speed computing logic chips, with target markets covering electric vehicles, AI, and other fields. Tata Electronics has negotiated OEM cooperation with NXP and Tesla, and plans to build two more factories in the future to simultaneously promote the construction of the Assam packaging plant.
For TSMC, technology transfer can consolidate its mature process influence and obtain market access at low cost through India's "Semiconductor Plan" subsidy of 760 billion rupees and the "Production Linked Incentive Plan". The Indian government provides up to 50% financial subsidies for the project, promising land concessions and tax reductions. India has included the project in its "Self Reliance India" strategy, aiming to cultivate 50000 semiconductor talents and increase self-sufficiency to 50% by 2030. At present, 30% of the factory infrastructure has been completed, 12 mature process patents have been transferred, the first batch of 500 students have entered the training stage, and Tata and NXP's OEM cooperation has entered the technology verification stage.
However, the project faces numerous challenges. In terms of the market, there is overcapacity in mature processes worldwide, and the demand in India may be difficult to digest the scale of producing 50000 pieces per month, requiring reliance on OEM orders to balance production capacity. In terms of policy implementation, India's previous $10 billion subsidy plan had little effect due to slow approval and low participation, and it is doubtful whether this subsidy can be delivered on time.
The cooperation between TSMC and Tata is a bold attempt by India's semiconductor industry to achieve "leapfrog development". Its success or failure depends not only on technology transfer, but also on the Indian government's sustained efforts in policy implementation, infrastructure support, and market cultivation.
Infineon opens research and development center in India
On March 24, 2025, Infineon officially opened its Global Competence Center (GCC) in Ahmedabad, Gujarat, India. As its fifth research and development base in India, the center is located in GIFT City and plans to hire 500 engineers over the next five years, focusing on chip design, product software development, information technology, supply chain management, and system application engineering. Currently, Infineon has over 2500 employees in India, with Bangalore being its largest research and development base.
Infineon regards India as a global innovation core, aiming to achieve sales of over 1 billion euros by 2030, closely focusing on India's automotive regulations and industrial chip demand, and accelerating its layout with up to 50% financial subsidies under the "Semiconductor Plan". It adopts a "localization of research and development+outsourcing of manufacturing" model, with a focus on developing next-generation automotive specifications and industrial control chips on the R&D side, and utilizing Indian engineers to reduce costs; The manufacturing side has reached a wafer supply agreement with Indian companies CDIL and Kaynes, with Indian companies responsible for packaging, testing, and sales, forming a "design packaging sales" collaborative chain. Currently, there are no plans to build a self built wafer fab, and the strategy may be adjusted in the long term based on the maturity of the Indian supply chain.
In addition, Infineon actively builds a local ecosystem, collaborates with universities to cultivate semiconductor talents, and deepens government enterprise cooperation by leveraging preferential policies such as land and taxation in Gujarat. It aims to capture over 10% of the $100 billion semiconductor market in India by 2032. Infineon's India layout is a key outcome of its "global localization" strategy, attempting to seize the opportunity during India's semiconductor boom period and help India transform into a "manufacturing powerhouse" through research and development centers, local cooperation networks, and policy resource integration.
Micron is building a sealing and testing factory in India
The factory focuses on wafer segmentation, packaging, testing, and module production. It is expected that the first batch of products will be produced in the first half of 2025, and after full production, it will create over 5000 high-tech jobs and become a large-scale storage chip packaging and testing base in South Asia. The site selection forms a 50 kilometer industrial cluster with Tata Electronics wafer fab and Renesas Electronics packaging and testing project, and initially constructs a closed loop of "design manufacturing packaging and testing" area. The factory adopts mature processes of 40nm and above to serve the Indian, Southeast Asian, and Middle Eastern markets, which can reduce Micron Asia Pacific's packaging and testing costs by 15% -20%.
In the progress of the project, Micron is promoting the localization of the supply chain, Korean material suppliers are investing with factories, Indian local enterprises are also cooperating in equipment maintenance, chemical supply and other fields, and the US government is providing key raw material support. Although production has been delayed by 6 months due to India's infrastructure shortcomings, Micron still sees great potential in the Indian market.
This project is a result of the Modi government's "Self Reliance India" strategy, marking a breakthrough in India's chip manufacturing process. As India plans to launch a new round of semiconductor incentive policies worth over billions of dollars, Micron is evaluating phase two expansion and plans to increase monthly testing capacity to 150000 wafers by 2030, covering advanced technologies. Micron's layout in India demonstrates India's determination and potential to accelerate its transformation into a new global hub for chip manufacturing through "policy leverage+international cooperation".
Semiconductor giants gather in India
In addition, many leading global semiconductor companies are accelerating the construction of strategic pivot points in India.
Chip giants such as NVIDIA and AMD have taken the lead in establishing large-scale research and design centers in India, integrating India into their global innovation network to diversify supply chain risks and stay close to the rapidly growing consumer electronics market.
As a leader in the automotive chip industry, NXP announced that it will double its R&D investment in India to over $1 billion in the coming years. Currently, it has four design centers and 3000 employees, and plans to establish a second R&D department focused on 5-nanometer automotive chips at the Greater Noida Semiconductor Park, with the goal of increasing the total number of employees to 6000.
Qualcomm, TI and other companies have established research and development centers and localized teams to deeply participate in the technological development of emerging fields such as 5G communication and the Internet of Things in India.
ADI has formed a strategic alliance with Tata Group to explore the construction of semiconductor manufacturing plants in India, with a focus on developing customized chips for electric vehicles and network infrastructure. This move marks the beginning of international manufacturers extending from the design phase to the manufacturing phase.
These layouts resonate with the industrial policies of the Indian government. India has attracted $10 billion wafer fab projects, including a collaboration between Israel's Tower Semiconductor and Adani Group, by revising its $10 billion semiconductor incentive plan, relaxing technology requirements, and increasing subsidy ratios.
In addition, global semiconductor equipment giants are also accelerating the construction of strategic pivot points in India, deeply participating in the reshaping of its industrial ecosystem, and improving the layout of the industrial chain.
DISCO Japan was the first to establish a legal entity in Bangalore and a service network in Ahmedabad. The initial team of 10 people will be expanded according to customer needs. Its layout aims to provide equipment installation and technical support for Micron, Tata Electronics, and other wafer fabs and packaging and testing plants in India. It also trains Indian marketing personnel in advance through its Singapore base.
Applied Materials positions India as a global hub for research and supply chain, and the $400 million investment plan launched in 2023 is steadily advancing. Establishing a Center of Excellence for Artificial Intelligence and Data Science in Chennai, focusing on the development of AI applications for chip manufacturing, with an expected creation of 500 high-end positions. The plan is to expand the total number of employees from 8000 to 10000. At the same time, we are collaborating with 15 suppliers to explore the establishment of equipment component manufacturing bases in India, striving to physically co locate verification centers with wafer fabs, shorten research and development cycles, improve material verification efficiency, and help India form competitiveness in mature process areas.
Lam Research (Panlin Group) is implementing a "localization of supply chain" strategy and announced a $1.2 billion investment in Karnataka state in 2024 to collaborate with the local government to promote the construction of local supply capabilities such as precision components and high-purity gas delivery systems. The company evaluates the potential for cooperation between Indian suppliers in the core components of wafer manufacturing equipment and plans to include India in a global network of 3000 suppliers to achieve localized support in key equipment areas such as etching and thin film deposition, thereby enhancing regional supply chain resilience and reducing supply chain risks in the Asia Pacific region.
Tokyo Electronics has established a deep cooperation with India's Tata Electronics to supply equipment for its 12 inch wafer fab in Gujarat, and will also establish a specialized training system to help Tata Electronics engineers master advanced process equipment operation techniques. We plan to establish an equipment delivery and after-sales support system in India by 2026, and form a local engineering team to serve Tata Electronics' manufacturing needs in areas such as automotive electronics and AI chips.
The layout of giants resonates with India's industrial policies, with central and local governments providing up to 75% of project cost subsidies to promote the coordinated development of equipment giants and wafer fabs. The influx of international capital confirms the strategic value of the Indian market. Its appeal lies not only in the expected chip demand to exceed 100 billion US dollars by 2026, making it the fastest-growing semiconductor market in the world, but also in the explosive growth in fields such as automotive electronics and 5G communication, providing broad application scenarios for the semiconductor industry.
Although the Indian semiconductor industry is still constrained by weak infrastructure and insufficient technological accumulation, it is gradually moving from a major chip design outsourcing country to the manufacturing sector through "policy leverage+international cooperation". With the deep participation of leading semiconductor companies, India is expected to form differentiated competitiveness in sub sectors such as automotive electronics and industrial control, becoming an important variable in the restructuring of the global semiconductor supply chain.
The Story of India's Semiconductor Industry
In fact, the development process of India's semiconductor industry is full of twists and turns and opportunities, from early technological breakthroughs to policy adjustments, and now global giants are laying out, reflecting a country's unremitting exploration in the semiconductor field.
The starting point of India's semiconductor industry can be traced back to 1984, when the government funded semiconductor manufacturing company SCL upgraded its process from 5 microns to 0.8 microns in the 1980s, only one generation behind Intel. However, a major fire in 1989 destroyed the SCL factory, and reconstruction took 8 years, causing India to miss the golden period of semiconductor development.
Since then, India has made multiple attempts to attract foreign investment to build factories, but has repeatedly suffered setbacks due to lagging policies and insufficient resources. For example, in 2005, Intel gave up investment due to policy deficiencies, and in 2012, incentive plans were stalled due to capital and water resource issues.
Until December 2021, the Modi government launched the "India Semiconductor Plan", providing 760 billion rupees (approximately 10 billion US dollars) in incentive funds, but the initial response was limited.
The real turning point came in June 2023, when the revised plan increased the financial support ratio to 50%, covering the entire industry chain of semiconductor manufacturing, packaging and testing, and relaxed technical requirements to attract giants such as Micron and Renesas to settle in. This policy adjustment marks India's shift from slogan based incentives to substantive industrial support.
Under policy promotion, the Indian semiconductor industry has made significant progress. In addition to the manufacturers mentioned above, almost all of the world's top semiconductor companies, including Intel, Texas Instruments, Nvidia, Qualcomm, etc., have design and research centers in India, with most personnel concentrated in Bangalore, Karnataka state in southern India.
Image source: ISM
In addition, India has signed multiple cooperation agreements with the United States, Japan, and the European Union to promote technology transfer and supply chain diversification.
Market data shows that semiconductor consumption in India is expected to grow from $22 billion in 2019 to $64 billion in 2026, with a compound annual growth rate of 16%, with automotive, consumer electronics, and wireless communications being the main growth areas.
Reasons for Semiconductor Giants to Invest in India
There are several reasons why international semiconductor giants are rushing to India, in my opinion:
Policy and financial support: India provides the most generous subsidy policy in the world, with the central government bearing 50% of project costs and state governments providing additional subsidies of 20% -25%. Enterprises only need to contribute 25% -30% in actual investment, directly lowering the investment threshold for enterprises. The revised plan also provides special support for sub sectors such as packaging and testing, compound semiconductors, etc., to further reduce investment risks for enterprises. Image source: India Semiconductor Mission (ISM)
Talent reserve and cost advantage: India has 20% of the world's semiconductor design talent, 25 leading companies such as Intel and Qualcomm have established research and development centers in Bangalore, and companies such as New Think Technology have over 5500 employees. Every year, 100000 new engineering graduates are added, providing sufficient manpower reserves for the industry, and the labor cost is only one-third of that in developed countries. Intel, Qualcomm and other companies have established research and development centers in India, utilizing local talents for chip design and software development; Equipment giants such as Applied Materials and Lam Research are expected to train tens of thousands of engineers in the next five years through training programs.
Geopolitics and Supply Chain Restructuring: Under the trend of China US trade frictions and global supply chain diversification, India has become an important choice for companies to diversify their risks. Semiconductor giants can avoid geopolitical risks and stay close to rapidly growing local markets such as automotive electronics and 5G equipment by setting up factories in India. The Memorandum of Understanding on Semiconductor Supply Chain and Innovation Partnership signed between India and the United States further strengthens its position as a "reliable manufacturing center".
Market potential and industry synergy: The size of the Indian semiconductor market is expected to reach $110 billion by 2030, and the government is promoting the "Make in India" and "Digital India" plans to stimulate local demand. At the same time, India is building a complete industrial chain through local giants and international cooperation, constructing a complete ecosystem from design, manufacturing to packaging, attracting upstream and downstream enterprises to gather, forming industrial clusters, and reducing collaboration costs between enterprises. Meanwhile, Apple's production of iPhones in India can also drive demand for chip matching.
Infrastructure upgrade: India is building a "semiconductor city" in Gujarat, with supporting infrastructure such as electricity and transportation, and establishing a semiconductor manufacturing ecosystem fund for park development and logistics network construction. In addition, the Indian government is promoting the "Digital India" plan, investing 11000 kilometers of highways and smart grids to improve supply chain efficiency.
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