India-Semiconductor Mission

Fri Aug 29, 2025

n August 15, 2025, Prime Minister Narendra Modi, in his Independence Day address, announced that “Made-in-India” semiconductor chips will be available in the market by end of 2025.

The Union Cabinet recently approved four new semiconductor assembly and testing plants in Odisha, Punjab, and Andhra Pradesh.
This development is part of the India Semiconductor Mission (ISM), aiming to reduce dependency on imports and promote India as a global hub for semiconductor manufacturing.

About the Indian Semiconductor Mission (ISM)

Launched in December 2021 under the Ministry of Electronics and Information Technology (MeitY).

A part of the ₹76,000 crore production-linked incentive (PLI) scheme to develop a sustainable semiconductor and display ecosystem.
Managed by the India Semiconductor Mission (ISM), a dedicated institution with technical and domain experts.

Key components include:

Semiconductor Fabs
Display Fabs
Design Ecosystems
ATMP (Assembly, Testing, Marking, and Packaging) Units

Key private sector projects:

Tata-PSMC semiconductor fabrication plant (~$11 billion)
Micron ATMP facility
Murugappa-Renesas collaboration
HCL-Foxconn JV

Importance Related to UPSC

Strategic Autonomy: Reduces dependence on China, Taiwan, and South Korea for semiconductors—vital for national security.

Digital India Push: Semiconductors power smartphones, laptops, and digital infrastructure.
Economic Growth & Job Creation: High-potential sector to attract FDI and skilled jobs.
Atmanirbhar Bharat: Key component of self-reliant India strategy.
Geopolitical Significance: India aspires to be part of trusted global supply chains amid US-China tech tensions.
Critical for Emerging Sectors: Supports AI, IoT, electric vehicles, defense, 5G, and space technology.

Challenges in Implementation

High Capital Investment: Semiconductor fabs need billions of dollars and long gestation periods.

Lack of Skilled Workforce: India has limited semiconductor fabrication experience.
Water and Power Requirements: Fabrication plants need large, uninterrupted resources.
Technological Complexity: Cutting-edge semiconductor technology is highly specialized and IP-intensive.
Global Competition: Facing tough competition from Taiwan (TSMC), South Korea (Samsung), and China.
Supply Chain Issues: India lacks an end-to-end ecosystem for raw materials and tools.

Future Prospects

Global Hub Vision: India aims to be among the top 5 semiconductor manufacturing nations.

Innovation Ecosystem: With government support, India can emerge as a design and R&D hub.
FDI Boost: Strategic tie-ups with global majors like Intel, TSMC, and Samsung could increase.
Export Opportunities: Once self-sufficient, India could become a net exporter.
Strategic Alliances: QUAD and other partnerships can aid India’s tech sovereignty.

UPSC Prelims Objective Question

Q. Consider the following statements regarding the India Semiconductor Mission (ISM):

1. It is implemented by the Ministry of Science and Technology.

2. It aims to provide financial assistance for setting up semiconductor fabs and display fabs.

3. It is part of the Production Linked Incentive (PLI) scheme. Which of the above statements is/are correct?

A. 1 and 2 only

B. 2 and 3 only

C. 1 and 3 only

D. 1, 2, and 3

Answer: B. 2 and 3 only

Explanation: ISM is under MeitY, not the Ministry of Science and Technology. It is part of the PLI scheme and provides support for semiconductor fabs.