Next 18 months crucial for growth India’s semiconductor industry: Report
Endiya Partners, in its report, highlighted that Indian semiconductor industry will need to prove soon it is a globally competitive player.
The next 18 months will serve as an important test for the semiconductor industry in India which will determine whether this sector can become a globally competitive player, according to a report.
Endiya Partners, an early stage venture capital firm in its report - "India Semiconductor Ecosystem: From Policy to Execution" noted that building fabs marked the first phase of India's semiconductor journey but operating them competitively will require a far broader and deeper ecosystem.
“The question has shifted from 'will we build fabs?' to 'can we operate them competitively?'" said Sateesh Andra, Managing Partner at Endiya Partners. "That changes the investment landscape. The ecosystem needs design tools and manufacturing AI more urgently than another chip startup competing for foundry capacity."
The India semiconductor mission (ISM) 1.0 saw the phase of building fabs. According to the report, the Dholera Fab of Tata Group is targeting December 2026 production representing the most visible milestone. Though, it highlighted that success will depend not merely on first chip output, but on achieving target yields on 28nm/40nm nodes within 6-12 months of operations.
The report further noted the three outsourced semiconductor assembly and test (OSAT) facilities need to scale to volume. The 23 startups which come under the design linked incentive (DLI) scheme) will need to move from tape-outs to actual revenue. These milestones will show whether India's semiconductor moment is real or aspirational, the report said.
The Union Budget 2026–27 allocated Rs 1,000 crore for ISM 2.0, with a sharper focus on equipment, materials, indigenous IP, and specialised talent development. This shift addresses a key gap left unresolved by ISM 1.0: while infrastructure investments accelerated, foundational ecosystem capabilities remain limited, the report mentioned.
India continues to import over 90% of semiconductor equipment and materials, and domestic capabilities in analog, RF, and compute design IP are still evolving. Semiconductor startup funding grew tenfold, from $5 million in 2023 to $50 million in 2025, but remains modest.