India is rapidly expanding its domestic semiconductor industry, moving beyond policy frameworks into active manufacturing. The country has approved a dozen semiconductor projects across six states, attracting investment commitments exceeding Rs 1.64 lakh crore. This wave of development includes silicon and compound semiconductor fabrication, display manufacturing, and advanced packaging facilities. Three of these plants have already started commercial production, marking a significant milestone for India’s self-reliance in chip production.
An official factsheet highlights that Indian institutions have made substantial progress in chip design, with 211 chips taped out across 75 organizations by April 2026. India has achieved semiconductor fabrication at multiple technology nodes, including advanced 12-nanometer processes, showcasing its growing expertise in complex chip manufacturing. The ambitious Semicon 2.0 program, backed by a Rs 1,27,500 crore funding package approved in July 2026, aims to build on this momentum by enhancing semiconductor intellectual property (IP) development, system design, and fostering India's emergence as a global design hub.
The semiconductor industry underpins much of modern technology, powering devices from smartphones to satellites and AI systems. The synergy between AI advancements and semiconductor innovation is especially pronounced, as AI fuels increased demand for specialized chips and high-performance computing. India is aligning its capabilities accordingly, integrating efforts in chip fabrication with robust AI infrastructure and indigenous AI model development.
The IndiaAI Mission complements this semiconductor push, having secured approximately Rs 10,372 crore in funding. Over the past year, it expanded shared compute resources to over 45,000 Graphics Processing Units (GPUs) by June 2026. By August, more than 230 projects accessed subsidized AI computing resources, collectively consuming over 93 lakh GPU hours. This initiative lowers barriers for researchers, startups, and innovators seeking affordable, high-performance computing for AI model training, testing, and R&D, critical for advancing domestic AI technologies.
Through coordinated investment in semiconductor manufacturing and AI infrastructure, India aims to position itself as a strategic player in the global tech ecosystem, fostering innovation across chip design, fabrication, and artificial intelligence development.