In December 2025, India’s semiconductor industry continued to gain strategic traction, reflecting a broader global shift toward diversified manufacturing, design, and supply chains. Multiple developments point to India’s transition from a predominantly design and R&D hub to an increasingly important player in semiconductor fabrication, packaging, and equipment investment — with implications for suppliers, buyers, and global microelectronics strategy.
One key development is the evolving implementation of the India Semiconductor Mission (ISM), a government initiative designed to attract foreign investment into chip fabrication, assembly, testing, marking and packaging (ATMP), and design ecosystems. Recent approvals under the Mission include new facilities in states such as Andhra Pradesh that focus on advanced system‑in‑package (SiP) modules and high‑density electronics manufacturing, supporting applications ranging from automotive to communications systems. This aligns with India’s broader industry build‑out and strengthens its capacity in areas beyond basic assembly.
Meanwhile, global firms are increasing their presence in India’s semiconductor landscape. Lam Research, a major supplier of equipment and process tools to fabs worldwide, announced a more than US $1 billion investment in Karnataka — a move expected to accelerate tooling, engineering support, and workforce training for semiconductor manufacturing in the region. This cash infusion illustrates how upstream segments of the industry (beyond final chip production) are beginning to localize in India as part of broader diversification strategies.
Supporting this investment environment, major multinational design centers are expanding operations in India. AMD opened its largest global design facility in Bengaluru, backed by roughly US $400 million in investment, while NXP and other semiconductor leaders are scaling local research and engineering talent. Collectively, these moves not only leverage India’s large base of chip design engineers, but they also strengthen its role as a hub for both innovation and execution within the semiconductor value chain.
At the ecosystem level, recent commentary from analysts and policymakers highlights India’s ambition to become a “third anchor” for semiconductor manufacturing alongside Taiwan and the U.S. Although challenges remain — including raising fabrication capacity to match established hubs and securing supply chain resilience — the country’s strategy increasingly emphasizes full‑stack capabilities spanning design, fabrication, and post‑fab services. Experts note that India’s semiconductor market could more than double by 2030, further underscoring its growing importance on the global stage.
Adding momentum to India’s ecosystem narrative, leading semiconductor equipment firms are investing in local R&D. For example, KLA Corporation recently inaugurated an R&D and innovation hub in Chennai, creating space for engineering collaboration focused on AI, advanced manufacturing support, and semiconductor process technology — further embedding India within global supply chain frameworks. This expansion also aligns with government efforts to foster advanced technology skills and research capacity domestically.
For microelectronics suppliers, system integrators, and component buyers, India’s semiconductor expansion presents both opportunities and strategic considerations. As design and fabrication footprints broaden, sourcing and supply chain diversification strategies may increasingly include Indian partners for both high‑volume components and custom system‑in‑package solutions. Engaging early with India‑based design centers or fabrication ecosystems could provide advantages as global supply chains evolve beyond legacy concentration zones.
December 2025 highlights India’s shifting position in global microelectronics — from design‑focused activity toward a more comprehensive semiconductor ecosystem that encompasses investment, tooling, talent, and manufacturing scale. For buyers and suppliers alike, this represents a trend worth monitoring as geoeconomic and technological forces reshape where and how chips are designed and produced.
