India is strengthening its domestic technology ecosystem by developing capabilities across the semiconductor value chain, from chip design and fabrication to advanced packaging, equipment and materials, as artificial intelligence (AI) accelerates demand for advanced computing infrastructure.

According to an official factsheet, India has successfully fabricated seven chips across various technology nodes, including advanced 12 nm nodes. The progress highlights the country’s growing ability to develop and manufacture semiconductor technologies domestically.

The government has approved 12 semiconductor projects across six states, with investment commitments exceeding Rs 1.64 lakh crore. These projects cover silicon and compound semiconductor fabrication, display manufacturing and advanced packaging facilities.

Three facilities have already started commercial production, marking a significant shift from semiconductor policy development towards actual manufacturing capacity.

India Expands Domestic Chip Design

India is also building a strong domestic chip-design ecosystem. By April 2026, 75 institutions had taped out 211 chips, demonstrating the growing capabilities of Indian institutions and engineers in semiconductor design.

The government is now expanding these capabilities through Semicon 2.0, which received approval for a Rs 1,27,500 crore outlay in July 2026.

“Semicon 2.0 will further intend to support semiconductor IP, chip and system designs, strengthening India’s position as a global semiconductor design hub. By strengthening domestic capabilities today, India is positioning itself to shape the technologies of tomorrow,” the statement said.

Semiconductors power a wide range of modern technologies, including smartphones, automobiles, satellites, data centres and AI systems.

As AI adoption grows, demand for specialised processors, advanced chips and high-performance computing is increasing rapidly.

India Connects Semiconductor Growth With AI

Recognising the close relationship between semiconductors and AI, India is developing capabilities across chip design, fabrication, computing infrastructure and indigenous AI models.

The IndiaAI Mission, approved with an outlay of around Rs 10,372 crore, is expanding access to computing resources for researchers, startups and innovators.

By June 2026, the mission had increased shared computing capacity to more than 45,000 GPUs. By August 2026, 237 projects had accessed subsidised AI computing, accounting for 93.18 lakh GPU hours.

This shared infrastructure gives Indian researchers, startups and innovators access to affordable high-performance computing for AI model development, training, testing and research.

By developing domestic semiconductor manufacturing alongside AI computing and indigenous model capabilities, India is building a broader technology ecosystem that can reduce dependence on imported technologies while creating opportunities for homegrown innovation.