E-Paper
Building a resilient semiconductor supply chain
This article is authored by Hareesh Chandrasekar, CEO & co-founder, AGNIT Semiconductors.
According to a recent NITI Aayog roadmap report, we import 90-95% of the semiconductors we use. Every time tensions rise geopolitically, the semiconductor industry feels the impact within hours as these regions are a part of a much larger supply chain that provides essential gases, minerals, and raw materials that chipmakers quietly depend on. A tremor in one part of the world can impact the chip production long before they start showing up in headlines.
India's semiconductor demand is growing much faster than its domestic manufacturing capacity. This widening gap highlights why strengthening the entire ecosystem is becoming increasingly important. India’s semiconductor imports have grown by 23% annually between FY17 to FY25 and If this trend continues, the report estimates that annual imports could reach around $240 billion by 2035,
For years, we treated geopolitical risk to energy market and semiconductor risk as two separate issues. Today, they are deeply connected. This instability now matters not only for oil, but also for the critical resources that keep chip factories running. As India is working towards becoming a global semiconductor hub, this connection is becoming impossible to ignore. Building chip manufacturing isn't just about setting up factories to manufacture, it's about securing the entire supply chain and that journey starts with indigenous technology spanning design and manufacturing of semiconductor chips themselves and critical supply chain inputs, electronic design automation software and the complex equipment that feed into these efforts. The next big step towards self-reliance isn't just energy independence, it's semiconductor resilience.
The real answer is that India relies heavily on the world for its chips and this will not change overnight. A single chip that is “made in India” can trace back its origin to different countries, silicon from one, specialty gases from another and minerals from somewhere else. For years this system worked but the pandemic and global chip shortage exposed how fragile this system really was. Even one missing material can bring a billion-dollar chip factory to a complete standstill. But depending on imports today doesn’t mean India has to remain dependent forever.
The real opportunity for India is in building a stronger ecosystem where innovation originates in India, intellectual property is developed locally, giving us a global competitive edge. That means diversifying suppliers, maintaining critical reserves and investing in testing labs, storage and logistics even when global disruptions occur. This is where India’s deep-tech startups are developing new materials, improving manufacturing processes, and reducing reliance on imported materials over time.
Helium can be taken as one of the examples here. Most people think it of a gas that fills balloons, but it is an essential for semiconductor manufacturing for cooling critical equipment, detecting leaks and keeping the production environment stable. There is no easy substitute and there are only few countries that produces it at a scale.
India has already begun addressing these gaps, and that’s encouraging. Through the Indian Semiconductor Mission (ISM), the government is backing manufacturing while also investing in broader ecosystem. Recently government announced ₹1 lakh crore for R&D and Innovation Fund. This will help to speed up work on new materials, manufacturing technologies and strengthening India’s Intellectual Property.
The initiatives show that India’s semiconductor strategy has outgrown the idea of just building fabs. The long-term goal is to create a stronger ecosystem, one where more of the technology and innovations are developed in India making the country standing on steadier ground for future global disruptions.
India's semiconductor journey won't be defined only by the number of fabs it builds. It will also depend on how resilient those fabs are when global supply chains come under stress and the crown jewels of any global supply chain for semiconductors are the underlying chip design and manufacturing technology, the hard-learned and hard-earned process capability and know-how to implement these technologies in practice and their relentless advancements. The recent disruptions are a reminder that true self-reliance isn't just about making chips in India, it's about ensuring that the materials, equipment, and technologies behind those chips aren't vulnerable to shocks beyond our control. That's the foundation India needs to build now, while the ecosystem is taking shape.
(The views expressed are personal)
This article is authored by Hareesh Chandrasekar, CEO & co-founder, AGNIT Semiconductors.
