Semiconductors are the microscopic crystalline ‘stuff’ that define the conductivity
characteristics of all modern electronic devices. They have emerged as the
commodity of the global economy in the 21st century. Semiconductors are the
invisible infrastructure of the digital age, from artificial intelligence accelerators
and 5G telecommunications infrastructure to electric vehicle power management
systems and medical imaging apparatus. The entire semiconductor sales worldwide
in 2024 were USD 627.6 billion, or a 19.1% increase over 2023, according to the
Semiconductor Industry Association (SIA) (2025). The Covid-19 pandemic and
subsequent geopolitical mischief involving the USA and China has starkly revealed
the concentrated and vulnerable character of the existing semiconductor supply
chains located mostly in Taiwan, South Korea, Japan, and the Netherlands.
Countries all over the world have reacted with legislation and funding for domestic
semiconductor capability. This is through instruments such as the US CHIPS and
Science Act (2022) and the European Chips Act (2023). India is in a unique position
in this global restructuring. In the past, the country was a net consumer of
semiconductors and also their importer. However, it possesses a strong competitive
advantage in chip design. It is estimated that Indian engineers account for nearly
20% of the global integrated circuit (IC) design workforce (MeitY, 2024). Despite
having design capabilities, India has largely lacked the infrastructure for fabrication,
packaging and testing that is required to turn this into a manufacturing-led
contribution to GDP. The approved Semicon India Programme by the Government of
India. The full scheme is expected to result in gainful ∼200,000 employments and
∼$15 billion dollars’ worth of public and private sector investment. The Government
of India’s approval in December 2021 of the ₹76,000 crore Semicon India
Programme designed around fiscal incentives of up to 50% of project cost for silicon
fabrication, compound semiconductor facilities, and assembly, testing, marking, and
packaging (ATMP) operations can be interpreted as a decisive policy pivot from
consumption and design toward end-to-end manufacturing (Press Information
Bureau [PIB], 2024). There are strong macroeconomic reasons for such a shift. As
of now, the electronics sector of India contributes around 3.4% of the national GDP
(India Brand Equity Foundation [IBEF], 2024). Moreover, the electronics production in
India reached ₹9.52 trillion in 2023-24, growing at CAGR of 19.78% since 2020-21
(MeitY, 2025). Yet the still. The semiconductor sub-sector is still nascent relative to
the national policy target scale. The GVA of the manufacturing sector at current
prices had reached nearly ₹41.69 lakh crore in 2024-25 (approximately USD 502
billion) and constituted about 17.2% of the total GVA (ChartForest, 2025).