Sustaining momentum is India’s chips challenge

This progress is significant because it indicates that India is striving to establish an end-to-end semiconductor ecosystem. The partnership between Tata and Taiwan’s PSMC for a fabrication facility at Dholera, Gujarat, is particularly important. Fabs are high-tech facilities, where silicon wafers are washed, etched and doped to transform into complex integrated circuits, which then power electronic devices. For long, India’s role was confined to providing manpower for global design centres. The move into wafer fabrication, although still in its early stages, shows a shift in ambition. The progress has been enabled by policy clarity. Both the Union and state governments have provided financial incentives, streamlined approvals, and framed semiconductor-specific policies. This seriousness of intent has helped attract global players such as Micron alongside domestic investors like the Tatas.

The challenges ahead are daunting. Around the world, investment is pouring in at a scale far beyond India’s reach. The United States has pledged more than $50 billion in support, sparking over $500 billion in private investment. East Asian countries are only tightening their grip on the industry. By comparison, India is starting from a much smaller base with limited capabilities. To say in the game, India must move past construction projects and subsidies. The real task is to climb the value chain—by creating homegrown intellectual property, building electronic design tools, and shifting towards advanced devices. The unveiling of the first chips is a welcome milestone, but only the beginning of a long journey, not the finish line. Semiconductors reward scale, innovation, and resilience. India’s true test lies in whether it can keep up the momentum and turn early gains into lasting strength.

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