Winning the semiconductor race isn’t easy for India if it continues to run at the existing pace; it should target becoming the ecosystem player that the global semiconductor industry can’t run without, said “Future of India’s Semiconductor Industry,” released by NITI Aayog here.
The report said that India should focus on winning the “More-than-Moore” era, where advanced packaging, system integration, and manufacturing scale matter as much as transistor nodes.
Basically, “More-than-Moore (MtM)” era refers to the semiconductor industry shift that focuses on adding advanced and non-digital functions to devices rather than just shrinking transistors.
India’s semiconductor market is projected to reach around USD 200 billion by 2035 despite a widening gap between demand growth and domestic capability.
It noted that despite this growing demand, nearly 90-95 per cent is met through imports, leading to large foreign exchange outflows and increasing the vulnerability of critical sectors to supply-chain disruptions.
“This widening gap between demand growth and limited domestic capability represents a critical strategic vulnerability and yet also a historic opportunity,” the report said.
The report noted that the government has recognised and taken some decisive steps through the India Semiconductor Mission (ISM) to nurture domestic capabilities across design, manufacturing and ecosystem development.
“The union Budget 2026 announced ISM 2.0, signalling a clear transition from ecosystem initiation to ecosystem deepening and scale-up.”
“By 2035, India should target building a USD 120-150 billion semiconductor value chain by choosing leadership and purpose over participation.”
At the core of this vision is a resilient and disciplined manufacturing foundation, anchored by world-class fabs that focus on what matters most to India’s economy and strategic autonomy: mature-node logic, specialty analog and mixed-signal chips and compound semiconductors such as Silicon Carbide (SiC) and Gallium Nitride (GaN).
They will power India’s automotive energy, industrial, telecom and strategic sectors.
According to the report, India will play to its greatest strengths, including its design talent, high-quality workforce, materials and chemistry ecosystem potential.
Realising this ambition requires deliberate choices about where India competes and how it allocates capital, talent and policy attention, the report said.
The report said that establishing strong dominance in mature and compound nodes should be a near-term priority, while leadership in advanced-node wafer manufacturing is a long-term aspiration.
India should aim to secure self-reliance for domestic demand while aggressively targeting a top-three global position in advanced packaging.
India should strive to integrate itself into the core of global semiconductor supply chains by emerging as a critical global supplier of wide-bandgap materials such as SiC and GaN.
Silicon Carbide (SiC) and Gallium Nitride (GaN) are two major wide-bandgap semiconductors replacing traditional silicon in modern power electronics.