Semicon 2026: India’s semiconductor push turns to localising materials, gases

Semiconductor plants now operational in India are prompting executives to focus on localising materials, gases and components vital for their operation. At the Semicon 2026 event, representatives from Kaynes Semicon, Merck, INOX Air Products and L&T Semiconductor Technologies emphasized the potential of localising these critical inputs.

Kaynes Semicon's Nannie Torries highlighted that lead frames, moulding compounds and bonding wire could account for up to 15% of manufacturing costs, presenting a substantial localisation opportunity. However, the challenge lies in obtaining qualified suppliers, as established suppliers typically take nine to 18 months to qualify, making diversification of suppliers crucial.

Merck Electronics CEO Benjamin Hein stressed the importance of local investment in ultra-pure semiconductor chemicals and gases, safe materials handling, and certified domestic suppliers to ensure fab viability. INOX Air Products, led by Diganta Kumar Sarma, is expanding its gas purification capacity, aiming to manufacture up to 20-25 more gases required by the semiconductor industry.

Sarma stressed that further investment depends on chipmakers committing to binding contracts. L&T Semiconductor Technologies CEO Sandeep Kumar underscored the need for India to cultivate a diverse network of specialised semiconductor companies to build a globally competitive industry. Government policies, including the Semicon 2.0 initiative, are shifting focus towards machines, materials and gases, with $11 billion to $12 billion in investment proposed, marking a move from building semiconductor factories to developing the local supply chain that supports them.