JM Financial report highlights need for additional packaging and fabrication units alongside $13bn in capital equipment.
India’s ambition to capture approximately 25 per cent of global semiconductor demand by 2032 will depend on establishing additional fabrication plants, advanced packaging units, and a resilient domestic component network, according to a report by JM Financial.
The report highlights that initial projects approved under the India Semiconductor Mission (ISM) 1.0 will require $12 billion to $13 billion in capital equipment alone. With the global semiconductor industry projected to expand from $775 billion in 2024 to $1.6 trillion by 2030, India’s domestic chip market is expected to reach $110 billion to $120 billion over the same period, necessitating further infrastructure expansion.
Local supply chain development is moving forward as Tata Electronics constructs its Dholera fabrication plant, which relies on more than 400 localised suppliers to minimise operational downtime. To support this network, Tata is building a 350-acre supplier park in Dholera, Gujarat, while lithography leader ASML evaluates plans to bring advanced equipment capabilities to the country.
Following the approval of 12 projects under ISM 1.0, the government has launched ISM 2.0 to enhance local chip design capabilities and broaden policy support. Administrative timelines have tightened, with Tata Electronics obtaining key regulatory approvals within 100 days, supported by state-backed power and water infrastructure in Gujarat and Assam. Tata’s Dholera facility is scheduled to start commercial output by 2028, while Micron’s packaging plant in Sanand began production in February 2026.
International equipment vendors are also scaling up local capital commitments. Applied Materials has outlined a $5 billion investment plan under its India Vision 2035 framework to expand domestic supplier capacity tenfold, while Lam Research has committed 10,000 crore rupees ($1.2 billion) to build its first vertically integrated silicon component manufacturing site in the country.
