India Is Making Chips Now. Here’s What That Actually Means

Updated: 3 October 2026

Look around you. The phone in your hand, the laptop on your desk, the car outside, the washing machine, the router blinking in the corner. Every one of them runs on semiconductor chips, small pieces of silicon carrying billions of microscopic switches.

For decades, almost none of those chips were made in India. That’s starting to change, and in September 2026 the country put its progress on display.

What happened at SEMICON India 2026

From 17 to 19 September 2026, New Delhi hosted SEMICON India 2026 at Yashobhoomi, the big convention centre in Dwarka. Prime Minister Narendra Modi opened the event, the fifth edition of the conference, under the theme “Silicon to Systems: Building the Ecosystem”.

The headline message was confidence. “Now chips are coming out of India’s plants and reaching customers in India and the world,” the Prime Minister said in his speech.

Some of the key points from the event, as reported:

• The government’s chip programme, the India Semiconductor Mission (ISM), has entered a second phase, often called ISM 2.0, with a budget reported at about $13.5 billion (around ₹1.27 lakh crore). The first phase had about ₹76,000 crore.
• 12 chip-related projects have been approved so far.
• Two new production lines, at CDIL Semiconductor in Mohali and Suchi Semicon in Surat, were inaugurated by video link.
• US memory-chip maker Micron’s facility in Sanand, Gujarat is producing memory chips, according to EE Times.
• Tata Electronics is building a large chip fabrication plant at Dholera, Gujarat.
• Officials said more than 70,000 engineers have been trained, and over 400 universities have access to chip-design software.

Wait, what does “making chips” really involve?

This is where things get interesting, and where the debate begins. Making a chip isn’t one step. It’s a long chain, and different countries specialise in different links.

1. Design: engineers design the chip’s circuits using powerful software. This is brain-heavy, high-value work.
2. Fabrication (the “fab”): the design is printed onto silicon wafers in ultra-clean factories, using some of the most precise machines humans have ever built. This is extremely expensive and needs enormous amounts of clean water and stable power.
3. Assembly, testing and packaging: the finished silicon is cut, tested, packaged into the small black chips you see on circuit boards, and checked again. This is often called ATMP or OSAT.

Most of India’s first wave of projects are in the third step, packaging and testing. That’s a sensible place to start: it creates jobs and builds skills. But it’s also the part of the chain that earns the least money per chip.

The debate: are we aiming high enough?

On 2 October 2026, Rajeev Chandrasekhar, a former Minister of State for IT, pointed out that, by his count, 9 of the 12 approved projects are packaging units. He argued that India should move faster into chip design, intellectual property and chips built for AI, where the biggest value and future demand lie.

Other analysts have raised practical concerns. Policy Circle, for example, has highlighted India’s thin supply chain for specialised materials like gases and chemicals, and the challenge of supplying reliable power and ultra-pure water. It also made a sharp point: chip plants “need long-term customers, not just subsidy approval”.

On the other side, industry voices at the event described a real shift in attitude. Global companies, they said, are no longer asking whether India can build a chip industry, but where the opportunities are. Equipment makers Applied Materials and Lam Research have announced investment plans in India.

Both views can be true at once. India has moved further in five years than many expected. And the hardest, most valuable steps are still ahead.

Why should a student care?

• Jobs and careers: chip design, materials science, electronics engineering and precision manufacturing are growing fields in India.
• Security: the global chip shortage after 2020 showed how quickly factories, from cars to phones, can stop when chips don’t arrive. Countries now see chip supply as a matter of national resilience.
• The AI connection: every AI tool runs on chips. Who designs and makes those chips will shape the technology of the next few decades.

What to watch next

• When Tata’s Dholera fab begins production. No firm date has been widely reported.
• Whether investment promises turn into money actually spent. Minister Ashwini Vaishnaw said commitments would materialise over two to three years.
• Whether policy shifts toward chip design and AI chips, as some experts are urging.

Sources

• PMIndia – PM’s speech at SEMICON India 2026 (17 Sep 2026)
• Business Today – $13.5 billion mission, 12 projects approved (17 Sep 2026)
• EE Times – India starts packaging chips as ecosystem takes shape (23 Sep 2026)
• Business Today – Strategy needs to move beyond packaging (2 Oct 2026)
• Policy Circle – ISM enters its hardest phase
• DQIndia – Six pillars of ISM 2.0 (17 Sep 2026)