India’s push to become a major semiconductor manufacturing hub is moving beyond building fabs and advanced packaging facilities. The country will also need a strong domestic supply chain, skilled technical talent and supporting manufacturing infrastructure to meet its long-term semiconductor ambitions.
India aims to account for around 25 per cent of global semiconductor demand by 2032. According to a report by JM Financial, semiconductor projects approved under the first phase of the India Semiconductor Mission (ISM 1.0) are expected to require capital equipment worth around $12–13 billion.
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The scale of this investment highlights another requirement for India’s semiconductor industry: a reliable network of local suppliers that can provide equipment, materials and maintenance support close to manufacturing facilities.
Why India needs a local semiconductor supply chain
Semiconductor manufacturing depends on a large ecosystem of specialised suppliers. Fabs require a steady supply of equipment, materials, components and maintenance services, making proximity an important factor in keeping production running smoothly.
A stronger local supplier base could help semiconductor manufacturers respond faster to equipment and maintenance requirements and reduce the risk of operational disruptions.
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The requirement is becoming more significant as India’s semiconductor market expands. The global semiconductor market is projected to grow from $775 billion in 2024 to $1.6 trillion by 2030. India’s semiconductor market, meanwhile, is expected to reach $110–120 billion during the same period.
This growth will require additional fabrication and packaging capacity, along with the wider industrial ecosystem needed to support these facilities.
Tata Electronics plans 350-acre vendor park in Dholera
Tata Electronics’ semiconductor fabrication facility in Dholera, Gujarat, offers an example of how this supplier ecosystem could develop around a major semiconductor project. The facility is expected to depend on more than 400 suppliers. To support these companies, Tata Electronics is developing a vendor park spread across more than 350 acres in Dholera.
The planned park is designed as a plug-and-play facility for global suppliers. Locating suppliers close to the fabrication unit is expected to make it easier to provide equipment, materials and other manufacturing support.
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The approach also reflects a broader shift in India’s semiconductor strategy. Building a fab is only one part of establishing semiconductor manufacturing capacity. The surrounding ecosystem of suppliers, equipment companies, materials providers, packaging facilities and skilled workers is equally important.
ISM expands focus beyond semiconductor fabs
India’s semiconductor policy is also widening beyond fabrication. Under ISM 1.0, 12 semiconductor facilities, including fabrication and packaging projects, received approval. The second phase, ISM 2.0, has put greater emphasis on semiconductor design capabilities.
Work on ISM 3.0 is also underway, according to remarks cited by JM Financial. The report identified fabrication, advanced packaging and semiconductor design as areas that will continue to require policy support as India develops its semiconductor ecosystem. This means the country’s semiconductor strategy is increasingly being built around multiple parts of the value chain rather than manufacturing alone.
Global semiconductor equipment companies expand in India
India’s semiconductor push is also attracting major global equipment manufacturers. ASML is considering bringing advanced lithography capabilities to India as domestic semiconductor manufacturing capacity grows.
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Applied Materials has announced its India Vision 2035, including a planned $5 billion investment. The company aims to expand its local supply chain capacity tenfold and develop a network of more than 100 suppliers.
LAM Research has committed ₹10,000 crore towards its first vertically integrated silicon-component manufacturing unit in India. Tata Electronics has also entered into collaborations with around 16 organisations across areas including materials, packaging and talent development. These partnerships are aimed at strengthening capabilities beyond semiconductor fabrication and building a broader supply chain.
Semiconductor projects move closer to production
State governments are also playing a role in supporting semiconductor projects by providing infrastructure such as dedicated power and water supplies. Tata Electronics secured approvals within 100 days of submitting its proposals, while Gujarat and Assam have supported semiconductor projects through infrastructure development.
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The Dholera semiconductor facility is expected to begin commercial operations by 2028. Meanwhile, Micron’s semiconductor plant in Sanand began manufacturing in February 2026. The facility employs more than 2,000 people. These developments point to a semiconductor ecosystem that is gradually taking shape across different parts of India.
India’s semiconductor growth will depend on the ecosystem
India’s semiconductor ambitions cannot be measured only by the number of fabs under construction or the amount of investment announced. The industry also needs suppliers that can operate close to manufacturing facilities, companies capable of providing specialised equipment and materials, advanced packaging capabilities, semiconductor design expertise and a growing pool of technical talent.
The development of vendor parks such as the one planned in Dholera could therefore become an important part of this ecosystem. As India works towards capturing a larger share of global semiconductor demand, building these interconnected capabilities will be critical to supporting the country’s longer-term manufacturing ambitions.
Indrani Priyadarshini is a journalist and editorial professional specialising in technology, artificial intelligence, smart cities, green energy, and digital transformation. With over four years of experience in tech journalism and digital media, she is known for turning complex industry developments into clear, engaging, and insightful stories. Her expertise spans reporting, editorial strategy, digital publishing workflows, and in-depth coverage of emerging technologies shaping the future.
