India's chip story is finally about factories, not announcements
Five packaging plants are running. The first fab is rising in Dholera. The next phase will be judged on yield, talent and patience, not memoranda.
Opinion. This piece is analysis and argument from Shetu Editorial, kept separate from our news reporting.
For years, India’s semiconductor ambitions were measured in announcements: memoranda of understanding signed, investment figures pledged, ministerial visits to foreign fabs. SEMICON India 2026 felt different, because for the first time the headline numbers described things that exist.
Five assembly and packaging plants are in commercial production. That is a real, if modest, foothold. It means Indian workers are handling wafers, running test lines and shipping packaged chips, building exactly the operational experience no subsidy can buy.
Packaging is the right place to start
It is tempting to dismiss packaging as the “easy” end of chipmaking. That misreads the industry. Advanced packaging, stacking and connecting chips in increasingly complex ways, has become one of the most important frontiers in semiconductors, especially for AI hardware. Countries that master it matter.
Starting with assembly and test also builds the supply chain that a fab will need: high-purity gases and chemicals, logistics, equipment maintenance and trained technicians. The partnerships announced for Tata’s Dholera fab, with INOX Air Products and Sumitomo Chemical, sound dull, but fabs cannot run without that kind of supply chain.
Dholera is the real test
India’s first commercial fab, Tata Electronics’ 300 mm facility in Dholera, is still under construction. Fabs are unforgiving. Getting a line built is one milestone; getting it to produce chips at a good yield, the share of chips on each wafer that work, is another, and it usually takes years of painstaking tuning.
Success should be measured on:
- Yield and uptime, not capacity announced.
- Customers, and whether they come back for a second order.
- Local talent in process engineering, alongside design.
- Policy consistency across budget cycles and elections.
Patience is a policy
The $13.5 billion committed to the second phase of the India Semiconductor Mission is significant. But semiconductor industries were built over decades in Taiwan, South Korea and elsewhere, with sustained state support, tolerance for early losses and deep investment in education.
The biggest risk now is impatience: judging a decade-long project on a two-year news cycle, and pulling back support before it matures.
India has moved from announcing a chip industry to building one. The next five years of steady funding will decide whether it lasts.
