Semiconductor Industry in India: Incentives and Key Players

India’s Semiconductor Sector: Tracking Government Support and Investment Trends May 6, 2026 Posted by India Briefing Written by Melissa Cyrill Reading Time: 15 minutes India is building a semiconductor ecosystem with 10 approved projects under the India Semiconductor Mission. Learn about incentives, key fabs, locations, and investment. India approves two new semiconductor projects under ISM India’s Union Cabinet has approved two additional semiconductor projects under the ISM on May 5, 2026. The projects include the country’s first commercial mini/micro-LED display manufacturing facility based on Gallium Nitride (GaN) technology, along with a semiconductor packaging and testing unit. The approved projects will be established in Gujarat with a combined investment of approximately INR 39.36 billion and are expected to create employment opportunities for around 2,230 skilled professionals. One of the two new approved project, Crystal Matrix Limited, will set up an integrated compound semiconductor fabrication and Assembly, Testing, Marking, and Packaging (ATMP) facility in Dholera, Gujarat. The project will focus on manufacturing mini/micro-LED display modules while also offering GaN foundry services, including epitaxy on six-inch wafers. The facility is expected to produce 72,000 square meters of mini/micro-LED display panels annually, alongside 24,000 sets of RGB GaN epitaxy wafers. The products are intended for use across multiple applications, including televisions, commercial display systems, smartphones, tablets, automotive displays, XR glasses, and smartwatches. The second project, Suchi Semicon Private Limited, will establish an Outsourced Semiconductor Assembly and Test (OSAT) facility in Surat, Gujarat, focused on manufacturing discrete semiconductor components. The facility is projected to have an annual production capacity of over 1 billion chips. The company’s products are expected to support applications in power electronics, analog integrated circuits, and industrial systems, catering to sectors such as automotive, industrial automation, and consumer electronics. India’s semiconductor push gains momentum with INR 37 billion HCL-Foxconn project HCL Group and Foxconn have appointed Taiwan-based CTCI Corporation as the engineering, procurement, and construction (EPC) partner for their INR 37.06 billion (US$389.9 million) semiconductor assembly and testing (OSAT) facility in Jewar, Uttar Pradesh. The facility, being developed under the ISM, will manufacture display driver chips used in smartphones, laptops, PCs, and automotive systems. Located near the upcoming Noida International Airport, the project is expected to generate over 2,000 direct and indirect jobs while strengthening India’s domestic semiconductor packaging and testing capabilities. CTCI’s appointment also marks its entry into India’s semiconductor sector, building on its existing partnership with Foxconn across projects in Taiwan and the US. Unlike larger fabrication projects underway in Gujarat and Tamil Nadu, the HCL-Foxconn venture will focus on downstream chip packaging and testing — a segment increasingly viewed as critical for improving supply chain resilience and reducing dependence on imported semiconductor components. Accelerating semiconductor manufacturing through SEZ reforms On April 9, 2026, the central government notified a Special Economic Zone (SEZ) for Tata Semiconductor in Dholera, Gujarat, enabling the establishment of India’s first semiconductor fabrication facility. The notification formalizes the regulatory framework for the project and designates the zone as an inland container depot, allowing on-site cargo handling and improved logistics efficiency. The move reflects targeted regulatory support to facilitate large-scale semiconductor investments. India revised the SEZ Rules on June 3, 2025, to ease the establishment of semiconductor and electronics manufacturing units. Key changes included reducing the minimum land requirement from 50 hectares to 10 hectares, relaxing land-related conditions, allowing free-of-cost inputs to count toward export performance, and permitting domestic sales on payment of applicable duties. Following these reforms, several semiconductor and electronics SEZ projects have been approved across the country. These span fabrication, assembly, testing, and component manufacturing, and are expected to strengthen domestic production, generate skilled employment, and reduce import dependence. Approved Semiconductor and Electronics SEZs Sl. no. Company name Date of notification Land area (hectares) Investment Employment (direct/indirect) Type of operation 1 Micron Semiconductor Technology India Pvt. Ltd. June 23, 2025 37.64 INR 130 billion 20,786 Assembly, Testing, Marking, and Packaging (ATMP) 2 Hubballi Durable Goods Cluster Pvt. Ltd. June 23, 2025 11.549 INR 1 billion 4,360 Electronics components manufacturing and services 3 CG Semi Pvt. Ltd. September 23, 2025 11.541 INR 21.50 billion 1,911 Outsourced Semiconductor Assembly and Testing 4 Kaynes Semicon Pvt. Ltd. September 26, 2025 18.44 INR 6.81 billion 2,020 Outsourced Semiconductor Assembly and Testing (OSAT) 5 Tata Semiconductor Manufacturing Pvt. Ltd. April 9, 2026 66.166 INR 910 billion 21,000 AI-enabled semiconductor fabrication Among these, the Tata Semiconductor project in Dholera stands out as India’s first fabrication facility and the largest in terms of investment and scale. Collectively, these developments indicate steady progress toward building a competitive semiconductor ecosystem in India, supported by policy reforms and increasing industry participation. Sanand strengthens position as a semiconductor hub Sanand has consolidated its role as a key semiconductor hub with the inauguration of Kaynes Semicon’s OSAT facility on March 31, 2026. Approved under the India Semiconductor Mission, the project involved an investment of INR 33 billion (US$347.9 million) and focuses on chip testing and packaging, with a production capacity of around 6 million chips per day. This followed the earlier operationalization of Micron’s facility, contributing to rapid industrial growth and expansion of the regional semiconductor ecosystem. Previously known for automobile manufacturing, Sanand has evolved into a prominent semiconductor cluster, driven by investments from Micron, Kaynes Semicon, and CG Semi. With several projects under the Semicon India Programme located in Gujarat, the region has emerged as a critical node in India’s semiconductor value chain. India’s semiconductor design and manufacturing ecosystem in 2026 India is strengthening its position as an emerging global center for semiconductor design and research, supported by targeted government initiatives and a growing pool of engineering talent. The country hosts around 7 percent of the world’s semiconductor Global Capability Centers (GCCs) and employs nearly 20 percent of the global semiconductor chip design workforce, as per industry estimates. As per the Ministry of Electronics and Information Technology (MeitY), the Semicon India Programme has attracted investment commitments of approximately INR 1.6 trillion (US$17.31 billion). As of March 2026, 10 semiconductor units have been approved, including two