For decades, India designed chips for the world but made almost none of them. Its engineers worked in Bengaluru and Hyderabad design centres, while the silicon itself came from Taiwan, South Korea and China. In 2026, that began to change. Production has started in OSAT plants, and India is past the announcement stage. The shift is still early and incomplete, but it is one of the most consequential industrial stories in the country right now. business-standard
The three layers of chipmaking
It helps to understand the supply chain. Chip production has three stages: design, fabrication plants that etch circuits onto wafers, and OSAT/ATMP plants that turn wafers into finished chips ready to ship. India has long been strong in the first stage. The government’s ₹76,000 crore India Semiconductor Mission, launched in 2021, backs fabrication, display and chip design. Under its funding schemes, the fab scheme offers 50% fiscal support for wafer fabrication facilities, and a parallel scheme offers 50% support for assembly, testing and packaging. An Indian encore, for chips: Meity’s semiconductor plan is just beginning +2
The packaging layer has come first. It is the easiest to start and the quickest to set up, which is why India began there.
Three plants open in 2026
According to the government, the first two semiconductor plants were launched on 28 February and 31 March 2026, with a third now in commercial production. The first was Micron’s facility in Sanand, Gujarat. In March, it shipped the first Made-in-India memory modules to Dell Technologies and HP for use in locally manufactured laptops and servers. Reports suggest the plant is expected to produce tens of millions of chips in 2026, scaling to hundreds of millions annually by 2027, and at full capacity could contribute around 10% of Micron’s global output. tele.net.in +2
The second was Kaynes Semicon’s plant, also in Sanand, which launched on 31 March 2026 with an investment of ₹3,307 crore and a design capacity of 6.33 million chips per day. Kaynes has already shipped India’s first commercially packaged multi-chip modules to California-based Alpha and Omega Semiconductor, barely a year after breaking ground. pocketfulswarajyamag
The third was CG Semi’s facility. It became the country’s third semiconductor unit to begin commercial production in 2026, and its output will go into automobiles, scooters and industrial equipment in India, with exports to Japan, the United States and Europe. The minister overseeing the sector said the pilot line is meant to produce 500,000 chips per day, and he described the moment as India entering a new semiconductor era. India has entered new semiconductors era: Ashwini Vaishnaw as CG semi OSAT plant starts commercial production in Sanand – The Tribune +2
Together, these plants have made Sanand India’s first major semiconductor manufacturing cluster. pocketful
The bigger bets: Assam and Dholera
Two larger Tata projects are the real test. In Assam, Tata Electronics is building an OSAT facility worth ₹27,000 crore that aims to generate around 27,000 jobs. Industry coverage says it is expected to produce 48 million chips per day once operational. Reports indicate the plant is already operating for packaging and testing, with capacity ramping through 2026. techovedaspocketful
The most ambitious project is the fab in Dholera, Gujarat, built with Taiwan’s PSMC. This is where wafers will actually be made. As of March, civil infrastructure for the Dholera fab had reached the 50 per cent completion mark. Targets for first output have been consistent: one recent analysis expects first silicon by December 2026 and full production by 2028. The technology is not cutting-edge. The plant is designed for 28nm nodes, which can meet India’s demands, with a move to higher-end chips after several years. manufacturing momentum india seeks to strengthen its semiconductor value chain with fresh investments +2
That mature-node focus is deliberate. Such chips go into cars, appliances, industrial machinery, power systems and consumer electronics. They are less glamorous than the processors in smartphones and AI servers, but demand is huge and steady.
What India cannot yet do
It is important to stay realistic. For leading-edge logic, such as AI chips and advanced mobile processors, India is not yet a supply option. Early projects are also dependent on foreign partners for technology, tools and customers. The Dholera fab relies on Taiwanese expertise, and the Micron plant is run by an American firm. zetwerk
Observers also point to a missing ecosystem. One analysis argues that the fabless design cohort continues to route most of its production to foreign foundries because that is where its chips have always been made, and describes the gap as solvable but time-limited. Another outlook says the next stage needs to ensure buyers and supply chains, meaning guaranteed customers, reliable materials and chemicals, and domestic equipment suppliers. swarajyamagyourstory
There are early signs of that ecosystem forming. L&T Semiconductor’s chief executive said the company is shifting its OSAT outsourcing to India and working closely with Tata Electronics’ plant in Assam. Upstream suppliers, including the machines that make chips, are for the first time beginning to develop alongside the fab and OSAT layers in India. business-standardswarajyamag
Why now
Several forces explain the timing. Global companies are diversifying away from over-reliance on one country, the so-called China+1 approach. The government sees mature-node chips and a larger share of global OSAT business as the sensible entry point. Domestic demand also helps: India’s electronics manufacturing sector has grown to nearly Rs 13 lakh crore, supporting over 25 lakh jobs. business-standardtribuneindia
Security is another factor. Chips sit inside power grids, telecom networks, vehicles and defence systems, so a country that makes none of them depends on others for critical infrastructure. Recent supply shocks showed how quickly shortages can halt car production and electronics assembly.
Talent and jobs
Skilled people are the real bottleneck. The government says 315 universities now offer semiconductor design-related courses. The Tata projects alone are expected to create nearly 50,000 jobs combined. Operating a fab, however, requires process engineers and technicians with practical experience that cannot be built from classroom learning alone. Training programmes and overseas placements are helping, but the pipeline will take years to mature. teletechovedas
What to watch next
The biggest milestone is the first wafer out of Dholera. A smooth start would show that India can handle the hardest part of the chain, while delays or poor yields would be a sobering reminder of how difficult fabs are. Other markers include whether packaging plants reach their stated volumes, whether Indian design firms move their production onshore, and whether the second wave of projects, including display and compound-semiconductor plants, gets built on schedule.
The honest summary is that India has crossed a threshold without finishing the journey. Chips are now being packaged and shipped from Indian soil, which was not true a year ago. The goal of a deep, competitive semiconductor industry is still years away, and it will depend less on announcements than on yields, customers, skills and patience. For a country that spent decades watching the chip revolution from the design desk, simply getting onto the factory floor is a significant step.