Rajeev Chandrasekhar Says India's Chip Strategy Must Move Beyond Assembly and Packaging
· TexaHub · Semiconductors, Regional Tech Ecosystems, Geopolitics & Tech
The former IT minister argues India's semiconductor push should shift towards design, advanced packaging, fabrication and research as AI reshapes demand for compute.
A call to climb the value chain
Rajeev Chandrasekhar, the BJP leader and former minister of state for electronics and information technology, said on 2 October that India "needs to shift its semiconductor strategy from conventional chip assembly and packaging towards chip design, advanced packaging, fabrication and research", according to Business Today [1]. He acknowledged progress, pointing to 12 approved manufacturing units, ₹1.64 lakh crore in committed investment and five facilities in production [1]. His concern is the mix of those projects: "Nine of those 12 approved units are conventional ATMP/OSAT facilities — wire-bond assembly, testing, marking, and packaging," he said [1].
Chandrasekhar framed the issue around artificial intelligence, arguing that semiconductors "are not experiencing supply-chain diversification" but "an architectural revolution" [1]. He identified AI inference chips as an opening, saying "Inference is wide open" [1]. He said India has 1.25 lakh chip-design engineers and could use open-source RISC-V technology through the DIR-V programme [1]. His proposals include a dedicated National Semiconductor Research Institute focused on process technology, design IP and talent, and a ₹1,000-crore Chip Design Commercialisation Fund to help Indian fabless companies finance development [1].
Where the India Semiconductor Mission stands
On 5 May, the Union Cabinet approved two more projects under the India Semiconductor Mission (ISM), including what the government called the country's first commercial Mini/Micro-LED display facility based on gallium nitride technology, together with a semiconductor packaging facility, both in Gujarat [2]. With those approvals, the total number of approved ISM projects reached 12, with cumulative investments of around Rs 1.64 lakh crore [2]. The government said at the time that two projects had already started commercial shipments from India and two more were expected to do so soon [2].
A Press Information Bureau backgrounder published on 13 August said the 12 projects span six states and cover silicon and compound semiconductor fabs, display fabrication and advanced packaging facilities [3]. It stated that three facilities had commenced commercial production [3]. The figure of five facilities in production comes from Chandrasekhar's remarks as reported by Business Today [1].
Semicon 2.0 and design capacity
According to the same backgrounder, the first phase, Semicon 1.0, carried a ₹76,000 crore outlay, while Semicon 2.0 was approved in July 2026 with a ₹1,27,500 crore outlay [3]. The government lists six pillars for the second phase: chip design, semiconductor equipment and materials, fabrication facilities, advanced packaging, research and development, and talent development [3]. It says Semicon 2.0 is intended to support semiconductor IP, chip and system designs [3].
On design, the backgrounder reports that 211 chips had been taped out by 75 institutions by April 2026, and that seven chips had been fabricated at various nodes including 12 nm [3]. The May cabinet release said design infrastructure support had been provided to 315 academic institutions and 104 start-ups [2]. Several of the areas Chandrasekhar highlighted, including advanced packaging, research and indigenous IP, are named in the government's description of Semicon 2.0, though the specific institute and commercialisation fund he proposed are his own recommendations [1][3].
Sources
[1] India's semiconductor strategy needs to move beyond chip packaging, says Rajeev Chandrasekhar — Business Today, 2 Oct 2026
[2] Cabinet approves two more semiconductor manufacturing units with cumulative investment of more than Rs. 3,900 crore — Press Information Bureau, 5 May 2026
[3] Semiconductor and AI Revolution — Press Information Bureau, 13 Aug 2026