India Invests $15B to Build Semiconductor Chip Industry

Every time you tap a payment app or scroll through your phone, you're using technology that India is now learning to build from scratch.

At Semicon India 2026 in New Delhi, Amitesh Kumar Sinha, CEO of the India Semiconductor Mission, broke down how computer chips are made using an analogy anyone can grasp. A chip, he explained, is like building a house.

"A house is first designed, then constructed, then finished with doors and windows so it becomes functional," Sinha said. "A chip is the same."

The explanation matters because India just committed Rs 1,27,500 crore, roughly $15 billion, to phase two of its semiconductor mission. That's enough money to transform the country from a chip importer to a chip maker.

The process starts with design, where engineers use special computer tools to plan circuits as complex as any technology in the world. A single chip design can cost anywhere from $3 million for simple chips to $240 million for cutting-edge processors.

Once designed, the blueprint goes to a fabrication plant, or fab, which Sinha compared to a kitchen that takes your recipe and delivers the product. These plants start with ultra-pure silicon refined from ordinary sand, grown into crystals, and sliced into mirror-smooth wafers.

Workers then spend weeks adding hundreds of layers to each wafer through a process involving light, chemicals, and precision etching. One wafer can yield 5,000 to 50,000 individual chips depending on size.

After the wafer is diced into individual chips, each one gets packaged with protective casing and connectors so it can link with other components. Your phone carries 200 to 250 different chips working together.

India has already approved 12 projects under phase one, with nine focused on packaging and testing. These facilities will cover the final steps from dicing through quality testing before chips ship to customers.

The Ripple Effect

Sinha expects India to become a major chip packaging exporter within five to six years. The country is also working to bring equipment suppliers, chemical makers, and skilled workers to India rather than just building isolated factories.

The investment reflects a hard lesson from COVID. When countries got protective about exports, nations without their own chip supply saw progress stall, especially in AI development where cutting-edge processors became impossible to obtain.

No country makes 100% of its chips domestically, not even the United States. But India wants enough capability that it can't be shut out of the technologies shaping the future.

Building this industry requires government support everywhere in the world. The equipment alone for a single plant costs 65% of the total budget, with materials and specialized cleanrooms adding to expenses that can reach $25 billion for the most advanced facilities.

Visitors to Semicon India 2026 can see working examples of every stage, from design software to fabrication equipment to packaging and testing, all under one roof for the first time in India.

The country that invented zero is now building the factories that will make the ones and zeros powering tomorrow's technology.