Odisha, Punjab, Andhra get chip fabs — what this means for India’s supply chain

India has taken another decisive step in its semiconductor manufacturing push, with the Union Cabinet approving four new projects under the India Semiconductor Mission (ISM) worth a combined investment of around ₹4,600 crore. The announcement, made on August 12, 2025, brings the total number of ISM-backed projects to 10, spanning six states and representing cumulative commitments of nearly ₹1.60 lakh crore.

The latest approvals are for facilities by SiCSem Private Limited, Continental Device India Private Limited (CDIL), 3D Glass Solutions Inc., and Advanced System in Package (ASIP) Technologies. Together, these projects are expected to create 2,034 direct high-skilled jobs and catalyse thousands of indirect employment opportunities in the wider electronics manufacturing supply chain. Officials stated that the expansion would significantly enhance India’s compound semiconductor and advanced packaging capabilities, aligning with the government’s Atmanirbhar Bharat vision.

How do the newly approved semiconductor units strengthen India’s manufacturing and technology capabilities?

Two of the four new facilities will be based in Odisha’s Info Valley technology hub in Bhubaneswar. SiCSem, in collaboration with the UK-based Clas-SiC Wafer Fab Ltd., will establish the country’s first commercial silicon carbide (SiC) compound semiconductor fabrication unit. The facility will have an annual production capacity of 60,000 wafers and packaging capabilities for up to 96 million units. The SiC devices are designed for applications in defence systems, electric vehicles, railways, renewable energy inverters, fast chargers, and data centre power racks — sectors that are increasingly demanding high-efficiency, high-temperature semiconductor solutions.

Alongside it, U.S.-based 3D Glass Solutions Inc. will set up a vertically integrated advanced packaging and embedded glass substrate unit, also in Info Valley. This plant will introduce glass interposers, silicon bridges, and three-dimensional heterogeneous integration (3DHI) modules to India’s semiconductor ecosystem. The proposed capacity includes 69,600 glass panel substrates, 50 million assembled units, and 13,200 3DHI modules per year. The products will cater to defence, high-performance computing, artificial intelligence, photonics, automotive, and co-packaged optics markets.

In Andhra Pradesh, ASIP Technologies will partner with South Korea’s APACT Co. Ltd. to establish a semiconductor manufacturing plant capable of producing 96 million units annually. These semiconductors will be used in mobile devices, set-top boxes, automotive electronics, and a range of consumer electronic products.

Punjab’s Mohali will see CDIL expand its existing discrete semiconductor manufacturing capacity. The upgraded facility will produce high-power devices such as MOSFETs, insulated-gate bipolar transistors (IGBTs), Schottky bypass diodes, and both silicon and silicon carbide-based transistors. With an output potential of 158.38 million units annually, CDIL’s expansion targets applications in electric vehicles, charging infrastructure, renewable energy systems, industrial automation, and communication networks.

Why are analysts calling this phase a strategic inflection point for India’s semiconductor sector?

Institutional investors tracking India’s electronics manufacturing sector believe that the current approvals mark a significant inflection point in the country’s semiconductor strategy. By simultaneously investing in compound semiconductors, glass substrate-based advanced packaging, and high-power discrete device manufacturing, India is diversifying far beyond its early-stage ambition of hosting traditional silicon wafer fabs. This multi-pronged approach targets technology segments where global demand is expanding rapidly, margins are higher, and competitive barriers are defined more by intellectual property and precision manufacturing capability than by sheer production scale.

Such diversification is particularly relevant at a time when supply chain resilience is shaping procurement decisions in critical industries. Compound semiconductors, especially silicon carbide (SiC) devices, are emerging as the backbone of next-generation power electronics, offering superior efficiency, heat resistance, and durability compared to conventional silicon. These attributes make them indispensable in electric mobility platforms, renewable energy converters, aerospace and defence electronics, rail transport, and high-capacity industrial power systems. As the global electric vehicle and solar power markets scale, India’s domestic availability of SiC devices could reduce import reliance while enabling competitive pricing for local manufacturers.

In parallel, the introduction of advanced glass substrate packaging technology addresses another high-value bottleneck in the semiconductor ecosystem. This packaging innovation, often linked to high-performance computing, AI accelerators, 5G infrastructure, and photonics, allows for denser chip integration, improved thermal management, and reduced signal latency — capabilities that are critical as device miniaturisation and performance requirements push conventional packaging methods to their limits. With 3D heterogeneous integration (3DHI) modules and glass interposers now planned for domestic production, India positions itself to capture opportunities in markets where chip performance and packaging innovation determine competitive advantage.

Analysts also highlight the geographic spread of the projects — with new facilities in Odisha, Punjab, and Andhra Pradesh — as a deliberate industrial policy choice aimed at avoiding over-concentration in legacy tech clusters like Bengaluru, Hyderabad, and Noida. This regional distribution supports more balanced economic development, encourages state-level competition for high-tech investments, and spreads the benefits of skilled job creation, supplier ecosystem growth, and infrastructure upgrades to emerging industrial corridors. For investors, this dispersion is seen as a hedge against supply chain disruption risks tied to single-location dependencies, while also enhancing India’s attractiveness to foreign technology partners seeking a broad, stable manufacturing base.

How does this align with the government’s broader semiconductor mission and talent development plans?

The India Semiconductor Mission, launched as part of the Digital India and Make in India initiatives, has so far supported 10 projects across six states. In parallel, the government has invested in design infrastructure for 278 academic institutions and 72 start-ups, enabling access to prototyping tools, electronic design automation (EDA) software, and intellectual property libraries. Over 60,000 students have already participated in semiconductor-focused talent development programmes, creating a pipeline of engineers and technicians to staff upcoming facilities.

Government sources highlighted that these four newly approved projects complement the growing domestic chip design ecosystem, which is increasingly supported by international collaborations and technology transfer agreements. By bringing both front-end manufacturing and advanced packaging into India, policymakers aim to reduce import dependence and position the country as a credible alternative in the global semiconductor supply chain.

What could be the near-term and long-term impact on India’s semiconductor supply chain competitiveness?

In the near term, industry experts believe that the successful commissioning of these units could reduce lead times and lower costs for domestic electronics manufacturers. This could be particularly impactful in sectors like electric vehicles and renewable energy, where supply chain bottlenecks for specialised chips have been a recurring challenge.

Over the long term, the integration of compound semiconductor and advanced packaging capabilities could help India secure higher-value segments of the global chip market. While traditional silicon wafer fabs require significantly larger investments and longer gestation periods, these niche manufacturing segments can generate returns more quickly and create opportunities for export-led growth.

Analysts caution, however, that sustained progress will depend on reliable infrastructure, stable policy incentives, and the ability to maintain competitive operating costs against established semiconductor hubs in East Asia.