Silicon dreams clash with reality

When Union Minister Ashwini Vaishnaw cut the ribbon at ARM’s new semiconductor design office in Bengaluru this September, the headlines practically wrote themselves: India is entering the race for 2-nanometre chips. The optics were powerful, the rhetoric grand. But beneath the speeches lies a sobering truth—India is still not producing 2-nm chips. What it has secured is design work at advanced nodes, not fabrication. That difference may seem technical. It isn’t. In semiconductors, design without manufacturing is like sketching aircraft blueprints without ever building a plane.

The government is eager to portray each announcement as a leap toward self-reliance. The India Semiconductor Mission (ISM), launched with `76,000 crore in funding, boasts ten approved projects across six states and investments of `1.6 lakh crore. Earlier this year, new 3-nm design centres opened in Noida and Bengaluru. A growing cohort of startups, backed by subsidies, is experimenting with chip design. Universities are turning out student-designed chips. The narrative is simple: India is on the cusp of greatness.
But semiconductors are not conquered by narrative. They are conquered by infrastructure, capacity, and patience. Taiwan dominates advanced chipmaking not because it held flashy inaugurations but because it invested relentlessly, decade after decade, in fabrication plants, logistics, water systems, and skills. South Korea and the United States followed similar paths. India, by contrast, is trying to vault from ambition to execution in record time. The gap shows.
It is tempting to equate the flurry of design activity with readiness. Startups under the Design Linked Incentive scheme are designing chips, and students are taping them out in university labs. These are encouraging signs, but they are also misleading if treated as evidence of an ecosystem ready for primetime. A chip taped out in a lab proves talent; it does not prove scale. Without fabrication plants capable of producing millions of chips, India’s design wins risk becoming intellectual footnotes in a story still dominated by Taiwan, Korea, and the United States.
This gap between design and manufacturing is not merely technical—it is existential. If India confines itself to design, the value capture remains limited. The lion’s share of revenue and strategic leverage sits with those who can fabricate at scale. That is why Taiwan’s TSMC wields outsized influence in global politics. And that is why India, despite its design talent, will not command similar influence unless it builds fabrication plants of its own.
The global context is unforgiving. By 2030, the semiconductor industry will likely cross the trillion-dollar mark. India’s own market may reach $100–110 billion. But Taiwan will still control about 90 percent of the most advanced chips. That concentration is not just an economic imbalance; it is a geopolitical fault line. Supply chain disruptions during COVID-19 made painfully clear how dangerous dependence on a single geography can be. India is right to position itself as a trusted alternative, but trust alone does not produce wafers. Without world-class fabrication plants, India risks being cast as a backup option rather than a serious player.
The real bottleneck is infrastructure. Advanced fabrication plants demand round-the-clock power, millions of gallons of ultra-pure water, and precision logistics. India, meanwhile, still suffers from rolling blackouts in major cities and water shortages every summer. These gaps are not small technicalities—they are deal-breakers. No global fab operator will bet billions of dollars on facilities in a country where basic utilities cannot be guaranteed. Unless these weaknesses are addressed with the urgency usually reserved for national security, India’s semiconductor ambitions will remain aspirations.
The political theatre of progress only deepens the problem. India’s leaders love milestones they can showcase: new offices, new centres, new schemes. But semiconductors do not reward theatrics. They reward steady, grinding effort—the kind that doesn’t make for glossy press releases. Unless the government ties subsidies to hard outcomes, like chips produced and patents filed, the industry risks becoming another “Make in India”: heavy on branding, light on delivery. The gap between slogans and silicon is wide.
Consider the question of talent. India prides itself on its engineers, and rightly so. But fabrication plants require more than elite engineers—they require armies of skilled technicians, machinists, and process specialists. Taiwan and South Korea invested heavily in building this layer of the workforce. India has not. Training a million coders is not the same as training a million fab technicians. Without this base, even the most advanced design centres will remain disconnected from the realities of production.
The way forward is neither glamorous nor quick. It means treating power and water infrastructure as matters of national security. It means training technicians as aggressively as India trains software engineers. It means tying incentives not to inaugurations but to results. Most of all, it means having the patience to play a decades-long game. The semiconductor giants of today did not arrive at dominance in five years; they slogged through decades of investment, failure, and learning. If India expects to leapfrog that cycle, it is setting itself up for disappointment.
Yet there is reason for cautious optimism. India’s true advantage is its people. With hundreds of institutions now engaged in semiconductor research and a young workforce eager to innovate, the raw talent exists. The missing piece is where that talent will put its skills to work. If India cannot provide fabrication plants, its brightest engineers will continue designing chips that are manufactured elsewhere. That brain drain, in effect, subsidises the very countries India hopes to compete with.
So yes, India’s move into 2-nm design is an achievement worth noting. But let’s not mistake it for a revolution. A revolution will be when India produces its own advanced chips, at scale, in fabrication plants on its soil. Until then, the celebrations are premature. Chips are the brains of the modern world. Whoever makes them, shapes the future. India has announced its ambitions loudly. Now it must prove it can deliver—silicon, not slogans.