India will produce its first commercial-scale semiconductor chip in 2025, Union Minister Ashwini Vaishnaw announced at the 14th convocation of IIT-Hyderabad. According to Telangana Today, six semiconductor units are currently under construction across the country. The minister stated that electronics exports have crossed the $40 billion mark, representing an eight-fold increase over the past 11 years.

The announcement came as Vaishnaw addressed students at the Kandi campus in Sangareddy district on Saturday. The government has approved six semiconductor fabrication plants with construction currently underway. Some of the world's most complex chips are being designed in Indian cities like Hyderabad, Bengaluru, Pune, Gurugram, and Chennai.

Why This Development Matters

India's entry into commercial semiconductor manufacturing addresses a critical supply chain vulnerability. The country historically relied on imports for over 90 percent of its semiconductor needs, leaving industries exposed to global supply disruptions. The automotive sector alone experienced a cumulative backorder of nearly 500,000 units during recent supply chain challenges.

The first Made in India chip will use 28-90 nanometer technology, targeting automotive, telecom, power, and railway applications. This segment represents approximately 60 percent of global semiconductor demand. The initiative aims to reduce import dependency while creating over 20,000 direct and indirect skilled jobs within the semiconductor ecosystem.

Global Semiconductor Industry Context

India's semiconductor push comes as the global industry faces intense competition and supply chain restructuring. According to KPMG's 2025 Global Semiconductor Industry Outlook, talent shortages and trade restrictions represent the biggest challenges facing the industry over the next three years.

China is projected to become the largest semiconductor foundry hub by 2030, holding 30 percent of global installed capacity. Taiwan currently leads with 23 percent, followed by China at 21 percent and South Korea at 19 percent. India Briefing reports that India has attracted over $15 billion in semiconductor investments, including major projects from Tata Electronics, Micron, and Foxconn.

The global semiconductor market is expected to reach $1 trillion by 2030, driven by artificial intelligence and electric vehicle demand. However, geopolitical tensions between the US and China are reshaping supply chains as countries seek to reduce dependencies on single manufacturing hubs.

Further Reading

For deeper insights into global adoption trends, our Alternative Financial Systems Index tracks regulatory frameworks and adoption metrics across 50 countries. The index provides comprehensive analysis of how technological transformations reshape economic systems worldwide.