India Unveils First Homegrown Semiconductor Chip: A Leap Toward Technological Self-Reliance

On September 2, 2025, India marked a historic milestone in its technological journey by unveiling its first indigenously developed semiconductor chip, the Vikram 32-bit microprocessor, at the Semicon India 2025 summit in New Delhi. Presented to Prime Minister Narendra Modi by Union Minister for Electronics and Information Technology Ashwini Vaishnaw, the chip was developed by the Indian Space Research Organisation’s (ISRO) Semiconductor Laboratory (SCL) in Mohali, Punjab, for use in space launch vehicles. Built on 28-90 nm technology, the Vikram chip targets critical applications in automotive, telecom, power, and railways, reducing India’s reliance on imported semiconductors. Backed by the Rs 76,000 crore India Semiconductor Mission (ISM), this achievement positions India as an emerging player in the global chip ecosystem. This article explores the drivers behind this breakthrough, the historical context of India’s semiconductor ambitions, future projections, and the broader impacts across industries, with a focus on Tamil Nadu’s role in the semiconductor ecosystem.

Why This Unveiling Matters

The Vikram chip represents a significant step toward technological self-reliance, addressing India’s 100% import dependency for semiconductors, valued at $45-50 billion in 2024-25. With global chip shortages and geopolitical tensions, particularly with China dominating 60-80% of chip supply chains, India’s entry into manufacturing strengthens national security, reduces trade deficits, and fosters innovation. Tamil Nadu, with its robust electronics manufacturing hubs in Chennai and Coimbatore, is poised to contribute significantly to chip design and production, creating jobs and boosting economic growth.

Latest Developments Driving the Unveiling

The unveiling of the Vikram microprocessor at Semicon India 2025, held from September 2-4, 2025, at Yashobhoomi, New Delhi, showcased India’s progress in semiconductor manufacturing. The event, attended by over 20,750 participants, 2,500 delegates from 48 countries, and 350 exhibitors, highlighted India’s growing semiconductor ecosystem. Alongside Vikram, test chips from four approved projects, including the Tata OSAT Chip and NIT Silchar’s Neural Amplifier Frontend IC, were displayed, reflecting regional contributions from Assam.

Key Highlights of the Unveiling

• Vikram Microprocessor: Developed by ISRO’s SCL, the 32-bit chip operates on 28-90 nm nodes, targeting space applications and industries like automotive and telecom, which account for 60% of global chip demand. It was handed over to ISRO Chairman on March 5, 2025, for space integration.
• Semiconductor Mission Progress: Six fabrication units are under construction, including Tata Electronics’ Rs 91,000 crore fab in Dholera, Gujarat, with Taiwan’s Powerchip Semiconductor Manufacturing Corporation (PSMC). Four additional plants, approved in August 2025, include a Rs 1,943 crore 3D glass packaging unit backed by Intel and Lockheed Martin.
• Government Support: The Rs 76,000 crore ISM, launched in December 2021, supports 10 chip plants with a total investment of Rs 1.6 lakh crore, including Micron’s Rs 22,516 crore packaging unit and Tata’s Rs 27,000 crore facility in Assam.
• Tamil Nadu’s Role: Chennai’s electronics clusters and academic institutions like IIT Madras contribute to chip design and R&D, with potential for future fabrication units given the state’s industrial infrastructure.
• Semicon India 2025: The event showcased 1,100 booths, up from 200 in 2024, with sessions on fabs, packaging, AI, and state-level policies, reinforcing India’s global ambitions.

Strategic Context

The unveiling comes amid US tariff pressures, with a 50% tariff on Indian imports partly linked to India’s Russian oil purchases, pushing India to bolster domestic supply chains. Prime Minister Modi emphasized India’s 7.8% GDP growth in Q1 FY26, positioning the country as a trusted semiconductor hub despite global economic challenges.

Historical Context of India’s Semiconductor Journey

India’s semiconductor ambitions date back to the 1960s but faced decades of delays due to bureaucratic hurdles and missed opportunities. The 2020s marked a turning point, with policy reforms and global supply chain disruptions accelerating efforts.

Key Milestones in Semiconductor Development

• 1960s-1980s: Early plans for semiconductor manufacturing stalled, with India focusing on IT services and chip design rather than fabrication.
• 2000s: The Semiconductor Laboratory in Mohali began developing chips for space applications, but commercial production lagged due to infrastructure gaps.
• 2021: The ISM was launched with Rs 76,000 crore to fund fabs, packaging units, and R&D, aiming to reduce import reliance.
• 2022-2023: Construction began on six chip plants, including Tata-PSMC’s Dholera fab. India’s chip market grew from $38 billion in 2023 to $45 billion in 2024.
• 2024: Micron’s Gujarat packaging unit and HCL-Foxconn’s joint venture progressed, with SEBI approving IPOs like Vikram Solar to fund tech expansion.
• 2025: The Vikram chip’s unveiling and approval of four new plants, including SiCsem’s silicon carbide fab, mark India’s entry into commercial chip production.

This timeline reflects India’s shift from design to manufacturing, with Tamil Nadu’s electronics ecosystem supporting R&D and talent development.

Future Scopes and Projections

India’s semiconductor market is projected to reach $63 billion by 2026, driven by EV, telecom, and renewable energy demand. The ISM aims to establish 20 chip plants by 2030, with a cumulative investment of Rs 3 lakh crore, producing chips for domestic and export markets. Tamil Nadu’s potential as a fabrication hub, leveraging its ports and skilled workforce, could attract $5 billion in investments by 2030.

Long-Term Strategic Outlook

By 2035, India aims to capture 10% of the global semiconductor market, reducing import dependency by 50%. The focus on 28-90 nm chips, which power 60% of global electronics, ensures immediate relevance, while R&D in gallium nitride (GaN) and silicon carbide (SiC) positions India for advanced applications like 5G and defense. Tamil Nadu’s IIT Madras and Anna University will drive innovation, with the state potentially hosting a processing park under the National Critical Mineral Mission (NCMM).

Potential Challenges

• Technology Gap: India’s 28-90 nm chips lag behind Taiwan’s 3nm technology, requiring significant R&D investment to compete in cutting-edge nodes.
• Geopolitical Risks: US tariffs and China’s dominance in chip supply chains could disrupt equipment imports and market access.
• Infrastructure Costs: Building cleanrooms and securing high-purity materials for fabs is capital-intensive, with Dholera’s fab costing $11 billion alone.
• Talent Shortage: India needs 300,000 skilled engineers by 2030, with Tamil Nadu’s universities scaling up training to meet demand.

Impacts on the Indian Economy and Stakeholders

The Vikram chip’s unveiling strengthens India’s technological sovereignty, boosts GDP, and creates high-skilled jobs. Tamil Nadu’s electronics and renewable energy sectors will benefit significantly, enhancing its role as a tech hub.

Sector-Wise Impacts

Technology and Telecommunications

• Impact: The Vikram chip supports India’s $1 trillion digital economy and 5G/6G rollout, with Chennai’s IT firms leveraging local chips for IoT and telecom devices.
• Economic Contribution: The sector could add Rs 15,000 crore to GDP, with Tamil Nadu’s IT exports growing 10% by 2027.
• Business Opportunities: Startups like Sarvam, developing culturally rooted AI models, and telecom firms will benefit from local chip supply, reducing costs by 5%.

Automotive and Electric Vehicles

• Impact: 28-90 nm chips power EV batteries and automotive systems, supporting India’s 30% EV adoption target by 2030. Tamil Nadu’s auto hubs like Chennai will integrate local chips.
• Economic Contribution: The EV sector could contribute Rs 8,000 crore to GDP, with Tamil Nadu gaining 20% through manufacturing.
• Business Opportunities: Companies like Ola Electric and Tata Motors will see cost savings, with Tamil Nadu’s supply chain firms securing contracts.

Defense and Aerospace

• Impact: Vikram’s use in space launch vehicles strengthens ISRO’s capabilities, with potential applications in defense electronics like AMCA fighter jets.
• Economic Contribution: Defense manufacturing could grow by Rs 5,000 crore, with Tamil Nadu’s aerospace clusters benefiting from local production.
• Business Opportunities: Defense contractors and R&D firms in Tamil Nadu will secure contracts for chip-intensive systems.

Renewable Energy and Power

• Impact: Chips for solar inverters and power grids align with India’s 500 GW renewable energy goal, with Tamil Nadu’s Vikram Solar leveraging local semiconductors.
• Economic Contribution: The sector could add Rs 7,000 crore to GDP, with Tamil Nadu contributing 15% through renewable manufacturing.
• Business Opportunities: Solar and wind energy firms will benefit from stable chip supply, with Tamil Nadu’s ports facilitating exports.

Financial Markets and Investment

• Impact: Stocks of chip-related firms like Tata Electronics rose 2% post-unveiling, with investor interest in PSU miners and tech firms growing.
• Economic Contribution: The sector could attract $10 billion in FDI by 2027, with Tamil Nadu drawing 10% for fab and R&D investments.
• Business Opportunities: VC funds and green bonds will target chip startups, with Tamil Nadu’s Innovators Growth Platform supporting tech SMEs.

Semiconductor Plants in India (2025)

This table highlights India’s growing chip infrastructure and Tamil Nadu’s supporting role.

Frequently Asked Questions (FAQs)

What is the Vikram semiconductor chip?

The Vikram is India’s first indigenously developed 32-bit microprocessor, built on 28-90 nm technology by ISRO’s SCL for space, automotive, telecom, and power applications.

Why is this chip unveiling significant?

It marks India’s entry into commercial chip manufacturing, reducing import reliance, enhancing national security, and positioning India as a global semiconductor hub.

How does Tamil Nadu contribute to India’s semiconductor ecosystem?

Tamil Nadu supports chip design and R&D through institutions like IIT Madras and supplies components via its electronics hubs in Chennai and Coimbatore.

What are the challenges facing India’s semiconductor ambitions?

India lags in advanced nodes (e.g., 3nm), faces high infrastructure costs, and needs 300,000 skilled engineers to scale production by 2030.

How will the chip impact India’s economy?

It will reduce import costs by $5 billion annually, create 50,000 jobs, and add Rs 35,000 crore to GDP, with Tamil Nadu contributing through tech and manufacturing.