India's semicon opportunity expands beyond fabs

New Delhi: India's semiconductor opportunity is evolving beyond the fabrication and packaging of chips, according to YES Securities' assessment following the SEMICON India 2026 conclave. The report suggests the next stage of India's semiconductor growth hinges on the nation's ability to capture more value throughout the entire supply chain, not just wafer fabrication.

The economic potential lies in the ecosystem surrounding semiconductor manufacturing, which could benefit suppliers, equipment makers, engineering firms, packaging businesses, material producers, and chip-design companies. The government's Semicon 2.0 program, with a budget of Rs 1,27,500 crore, targets six key areas: design, machines and materials, new fabrication facilities, advanced packaging, research and development, and talent development.

Investment commitments totaling around Rs 1 lakh crore are expected to materialize over the next two to three years.

While semiconductor demand is no longer the primary constraint, artificial intelligence, data centers, automobiles, industrial automation, and communications are now driving demand. The focus is shifting towards strengthening the supply chain to enable India to seize a larger slice of the growing semiconductor market.

Global semiconductor firms are signaling their commitment to localisation in the sector. Applied Materials has earmarked a USD 5 billion investment over the next decade for India, encompassing research, supply-chain development, and talent acquisition. Lam Research plans to invest Rs 10,000 crore in a silicon-component manufacturing facility and bolster its research and development efforts.

Tata Electronics has also signed seven strategic agreements related to its Dholera semiconductor fab, covering fabrication, advanced packaging, materials, research, vendor development, and workforce training.