India turns to Taiwan to build the chip ecosystem subsidies alone cannot buy

New Delhi’s Semicon 2.0 programme aims to build a domestic semiconductor supply chain, with Taiwanese expertise helping India move beyond chip design and assembly into wafer fabrication and advanced packaging.

India’s push to build a domestic semiconductor industry has moved from aspiration to policy, with the government approving a new programme in July designed to deepen every layer of the chip supply chain. According to Deutsche Welle and Reuters, the Semicon 2.0 plan builds on the earlier Indian Semiconductor Mission launched in 2021 and aims to cover design, equipment and materials, wafer fabrication, advanced packaging, research and development, and skills training. The ambition is sizeable: India wants a domestic chip market worth between $100 billion and $110 billion by 2030, while meeting roughly 70% to 75% of its electronics demand with chips designed and made at home by 2029.

That strategy reflects a wider global race to reduce dependence on a handful of Asian manufacturers after the pandemic exposed how vulnerable carmakers and electronics groups were to chip shortages. The move is also a direct response to India’s own weaknesses in the sector. For years, the country’s strengths have been concentrated in software, information services and engineering talent, while the higher-value parts of semiconductor manufacturing have remained heavily imported. In practice, India has been able to design products and assemble devices, but not yet to build a full-scale, competitive chip ecosystem of its own.

Taiwan has become central to India’s effort to close that gap. During a promotion trip to Taiwan in September, a delegation led by the Indian electronics and information technology ministry presented the country’s investment case to Taiwanese companies, and Uttar Pradesh unveiled plans for a dedicated “Taiwan City” aimed at electronics, semiconductor and information and communications technology firms. Local reporting says the state has already gained momentum through partnerships with Taiwanese groups, particularly after work with Foxconn, and is positioning itself as a major industrial cluster for electronics and chip-related manufacturing.

The practical value of Taiwan’s role is not just capital, but know-how. Taiwan’s semiconductor industry has been built over decades through dense links between foundries, assembly and testing firms, design houses, equipment suppliers, materials producers and plant engineers. That kind of ecosystem is difficult to replicate quickly with subsidies alone. One of the clearest examples of the emerging partnership is Tata Electronics’ work with Powerchip Semiconductor Manufacturing Corporation on India’s first 300mm wafer fab, a project designed to produce 50,000 wafers a month and give India a meaningful foothold in large-scale chip manufacturing. Separately, HCL Group and Foxconn’s India Chip venture is building an outsourced assembly and testing plant in Greater Noida, underlining how the collaboration is extending beyond wafer fabrication into other critical stages of the chain.

Even so, industry specialists warn that India cannot buy its way to semiconductor self-sufficiency. The real test will be whether it can train enough engineers, maintain reliable power and logistics, and create the conditions for suppliers to cluster around new factories. India’s government says it has trained about 85,000 semiconductor engineers over the past four years, but that still leaves a steep climb if the country wants to move from being a market for chip investment to becoming a genuine manufacturing base. As Reuters has noted, some executives still believe India is more likely to become a stronger chip design centre than a leading chip maker in the near term. For now, Semicon 2.0 marks New Delhi’s boldest attempt yet to turn a policy goal into an industrial reality.