India Eyes Five Operational Semiconductor Plants by Late 2026
The government accelerates chip-making ambitions with a Rs 1.27 lakh crore investment to slash import reliance.
India is approaching a critical milestone in its semiconductor strategy, with five plants expected to be operational by the end of 2026. This acceleration marks a pivotal shift in the nation's effort to transition from a global chip-design hub to a full-scale manufacturing power.
Union Minister Ashwini Vaishnaw stated that five semiconductor projects are likely to reach operational status by the close of 2026. This push is supported by the launch of the second phase of the national semiconductor programme, which carries an outlay of approximately Rs 1.27 lakh crore. A key early win in this timeline is the CG Semi facility in Sanand, Gujarat, which commenced commercial production at its Outsourced Semiconductor Assembly and Test (OSAT) plant as of July 2026.
Building the Ecosystem
India's strategy focuses on creating a comprehensive end-to-end ecosystem, moving from design to fabrication. To achieve this, the government has leveraged heavy subsidies and strategic partnerships with global industry leaders. A primary example is the collaboration between Tata Electronics and Taiwan's PSMC to establish a fabrication plant in Dholera, Gujarat.
However, the timeline for high-end fabrication has faced adjustments. While the broader goal of five operational plants remains, reports indicate that the Tata-PSMC fab in Dholera has seen its commercial production timeline shift from late 2026 to mid-2028. This suggests a tiered rollout where assembly and testing facilities lead the way before complex fabrication comes online.
Strategic Implications
Achieving these operational targets is critical for India's national security and economic resilience. By localizing the semiconductor supply chain, India aims to drastically reduce its dependency on imports for essential components. This infrastructure is viewed as the backbone for the domestic automotive and AI industries, ensuring that the hardware required for next-generation computing is produced within national borders.
The Road Ahead
As the 2026 deadline approaches, the industry will be watching whether the remaining projects can meet their operational targets to match the government's projections. While the delay of the Dholera fab highlights the technical challenges of semiconductor manufacturing, the successful launch of OSAT facilities like CG Semi provides a blueprint for the rest of the programme. The focus now shifts to whether the second phase of funding can sustain this momentum and bridge the gap between assembly and full-scale fabrication.