India is entering a new phase in the semiconductor race, having shifted its strategy from relying on its position as a huge electronics market to trying to build a local base that includes chip design, manufacturing, packaging, research and development, and equipment.
These efforts come at a time when technology companies are redistributing their global chip supply chains, driven by rising demand for computing power needed for artificial intelligence and trade and geopolitical tensions between major powers.
The latest indication of this shift came from Applied Materials, an American company specializing in semiconductor manufacturing equipment, which announced on September 17 a plan to invest $5 billion in India over the next decade as part of the India Vision 2035 initiative, in which the investment is focused on three main axes: expanding research and development, accelerating the growth of the local semiconductor ecosystem, and developing human capabilities.
The company plans to establish an advanced semiconductor research complex spanning 588 acres, along with expanding its engineering capabilities and local supply chain. It also aims to increase its existing supply chain capacity in India tenfold by 2035. These plans do not mean that the company will establish a huge chip manufacturing plant, as Applied Materials' core business is providing equipment and technologies used by semiconductor factories.
From design to manufacturing
India already has a strong base in chip design and software engineering, which is a different starting point than countries trying to build their system from scratch. According to an Intel official speaking at Simcon India 2026, India represents about 20% of the global workforce in chip design and large-scale integration, with more than 85,000 local specialists in this field.
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