Poised to Outpace China: India Set to Become a Global Hub for Chip Packaging; Government’s Mega Plan Ready
India has taken another significant step toward becoming an alternative to China in the global electronics supply chain. The country is poised to emerge as a global hub for chip packaging, with efforts underway to attract manufacturers to set up chip production plants in India.
The government will provide financial assistance of up to 35% of capital expenditure to companies setting up these units; for traditional packaging units, this assistance will be up to 25%. This move will strengthen India’s position in the global supply chain. The government recognizes that not only chip manufacturing but also testing and packaging are crucial components of the global supply chain.
How the New Strategy Will Bring Change
Under this new strategy, leading global companies such as Intel, Lockheed Martin, and Applied Materials have shown interest in investing in India. The establishment of new packaging and testing units will create thousands of direct and indirect employment opportunities across the electronics, hardware, and engineering sectors. India’s import dependency for chips used in automobiles, smartphones, artificial intelligence, and defense equipment will decrease.
Approvals have been granted for ATMP (Assembly, Testing, and Packaging) units and OSAT (Outsourced Semiconductor Assembly and Test) units in the semiconductor sector. Under the ‘Semicon 2.0’ initiative, key building blocks such as computing, memory, power, networking, and sensors have been identified. The country’s first fabrication (fab) unit is expected to become operational in 2028. Additionally, the first compound semiconductor fabrication unit and the first 3D glass substrate packaging facility are being established. Subsidies have been introduced to attract next-generation packaging technologies, aiming to entice major semiconductor companies to invest in India.
