India's dream of semiconductor manufacturing was interrupted in 1989. However, by 2026, this initiative is gaining momentum through the realization of policy intentions at the manufacturing site level. Currently, 12 approved manufacturing projects worth 1.64 lakh crore rupees are being implemented in India, alongside support under the Semicon 2.0 program amounting to 1.27 lakh crore rupees.
Before the establishment of TSMC, which later transformed the global semiconductor industry, India engaged in semiconductor manufacturing for three years. What was lost in India was not technical capability, but process continuity. The Council of Ministers of India approved the creation of Semiconductor Complex Limited (SCL) in 1976, and chip production of 5-micron size began in 1984, just three years before the creation of TSMC.
India was not lagging behind the start of the semiconductor race. The problem lay in the interruption of the pace of building a globally competitive commercial ecosystem for large-scale semiconductor production. A catastrophic fire in 1989 destroyed the main SCL production line in Mohali. Although the enterprise resumed operations in 1997 and continues to participate in strategic applications, this interruption lasted 37 years.
Unlike previous years when government programs often remained mere ambitious statements, there is now a shift from plans to actual production. As of mid-2026, the Indian government has approved 12 semiconductor manufacturing projects worth approximately 1.64 lakh crore rupees. On February 28, 2026, Prime Minister Narendra Modi inaugurated the Micron facility in Sanand, which began commercial production, delivering the first memory modules produced in India to Dell Technologies. A month later, Kaynes Semicon transitioned from laying the foundation to commercial production in just 14 months, and on July 4, CG Semi joined them, making Sanand the busiest chip cluster in India.
On July 15, the Council of Ministers approved the Semicon 2.0 program with a budget of 1.27500 lakh crore rupees, continuing the development of Phase I projects. The key breakthrough is not the size of the subsidies, but the order of their application. Under the semiconductor manufacturing schemes, India provides central fiscal support of 50% of the project cost, supplemented by regional incentives. Importantly, this support is provided on a pari-passu basis, meaning government aid follows the actual project expenditure and does not obligate investors to bear the entire financial risk until construction is complete.
According to MeitY Secretary C. Krishna, this is likely the most generous industrial policy ever implemented in India. The realization that semiconductor manufacturing cannot be built relying solely on private capital, which assumes all risk until the end, has been crucial. The administrative apparatus, represented by leaders such as C. Krishna and Additional Secretary Amitesh Kumar Sinha (CEO India Semiconductor Mission), is transforming policy into physical projects.
The Semicon 2.0 program expands ambitions across six strategic areas, covering not only fabrication plants but also design, equipment, materials, and domestic supply chains. For Indian entrepreneurs, this means a quiet revolution. The government is now co-investing equity capital with venture capital in chip design startups, planning to exit these projects as they scale up and reinvest the proceeds into deep technology research, tools, and materials. As of mid-2026, MeitY confirmed the approval of 24 semiconductor design companies for fiscal support.
India has chosen to start with mature technology nodes (from 28 nm to 110 nm), which aligns with sound industrial logic. Chips in this range remain critical for the automotive industry, power management, industrial electronics, defense platforms, and telecommunication infrastructure. This gives India a realistic path to mastering core manufacturing disciplines: process control, yield, reliability, and unit economics. As Krishna stated, for a country building manufacturing capacity from scratch, success using established technologies is more sensible than immediately taking high-risk bets on the most advanced nodes.
The next 18 months will be a serious test. The Tata Electronics plant worth 91,000 crore rupees in Dholera, being built with participation from Taiwan's PSMC, could fundamentally change the perception of India's potential, moving the country from assembly and packaging to commercial wafer production. However, success is determined not by laying the foundation or completing construction, but by repeatability, yield, and consistent orders from customers.
Five key tasks lie before India: ensuring high yield rates, deepening the supply chain for specialized chemicals and equipment, building manufacturing talent, winning customer trust, and maintaining cycle continuity, as global markets are subject to sharp fluctuations and geopolitical shocks.
Under the leadership of Prime Minister Narendra Modi, India's semiconductor ambitions have entered a qualitatively new phase. The real test is whether the country's institutions can withstand the harsh decade required to sustain the functioning of the entire ecosystem. India's story is the story of a nation that started earlier than many, lost commercial momentum, and is now regaining it, step by step.
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Today's bulletin examines the topic of India's push towards chip manufacturing and the fourfold increase in Eternal's net profit.
India began semiconductor production three years before the establishment of TSMC, the world's first specialized semiconductor manufacturer. In 1989, a major fire destroyed the main production line at SCL in Mohali. Although the facility resumed operations in 1997 and continues to play a role in strategic applications, India did not cease producing all types of chips for 37 years.
However, the opportunity to build a globally competitive commercial semiconductor manufacturing ecosystem was interrupted. The country lost not technical capability, but process continuity. In 2026, thanks to commercial supplies, 12 approved manufacturing projects worth 1.64 lakh crore rupees and an additional boost of 1.27 lakh crore rupees under the Semicon 2.0 program, India is beginning to translate policy intentions into actual production.
The Semicon 2.0 program expands India's ambitions to cover not only fabrication plants but also design, equipment, materials, and domestic supply chains. Under the semiconductor manufacturing schemes in India, relevant projects receive centralized fiscal support of 50% of the project cost, with states adding further incentives. It is important to note that this support is provided on an equal footing, meaning government aid follows the actual project expenditure and does not obligate investors to bear the entire financial risk until the plant is completed.
For Indian entrepreneurs, this is a quiet revolution, as everything developing around the plant represents an opportunity. Every new manufacturing cluster creates potential demand for specialized materials, industrial automation, testing, precision engineering, logistics, embedded systems, and chip design.
Eternal, the parent company of food delivery platforms Zomato and quick retail business Blinkit, reported an almost fourfold increase in net profit and nearly threefold increase in revenue in the first quarter of the fiscal year 27. The company's consolidated net profit reached 92 crore rupees, and revenue amounted to 20,211 crore rupees, driven by strong growth in the Blinkit business.
The Blinkit business contributed the most to Eternal's revenue during the quarter, reaching 15,664 crore rupees compared to 2,400 crore rupees in the same period last fiscal year. The food delivery business Zomato generated revenue of 3,100 crore rupees in the first quarter, which is higher than 2,261 crore rupees in the corresponding period last year. Furthermore, the company's B2B supply business, Hyperpure, generated revenue of 1,034 crore rupees, and the sales segment also brought in 318 crore rupees.
All key operational segments of Eternal demonstrated a positive EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) during the quarter.
Taiwan Semiconductor Manufacturing Company (TSMC) forecasts an adjustment in its chip manufacturing services, with increases potentially reaching 10% in 2027. This adjustment will apply to both mature and advanced processes.
The increase aims to offset growing costs related to materials, equipment, and the construction of new fabrication facilities. The information was gathered by Nikkei Asia through various sources informed on the matter.
The company, which produces chips for other corporations, has notable clients such as Apple, Google, Nvidia, Qualcomm, Amazon, and MediaTek. The price adjustment is expected to be implemented at the beginning of 2027, following discussions between TSMC and its clients in June, with the final decision made in July. Sources indicated that this more cautious approach aims to allow clients to adapt to the new price levels.
TSMC's services are divided into two main categories. The advanced chip line, covering 7-nanometer lithography processes or smaller, accounts for 77% of the company's revenue and is used in smartphone processors. For these advanced chips, the projected increase ranges between 5% and 10%, varying according to the contractor and the product. Additionally, orders exceeding previous projections may incur an extra charge of 10% to 15%.
The second line refers to mature chips, which include technologies such as 12 nm, 16 nm, and 28 nm, accounting for 23% of revenues. Although these are older technologies, these components continue to meet the needs of simpler electronics well. In the consolidated chip segment, increases can also reach 10%, although many products remain below this percentage.
Nikkei Asia points out that several elements of the supply chain have seen cost increases, including labor, raw materials, chemicals, and logistics. There has been a rise in the prices of items such as fiberglass fabric, printed circuit boards, lasers, and encapsulation packaging in recent months.
Furthermore, massive investment in building data centers for artificial intelligence has rapidly driven up demand for different types of semiconductors, increasing the prices charged. The scenario is also influenced by the dispute between the United States and Iran, which contributes to inflation in gas and oil costs. The publication also mentioned that Intel and AMD recently made similar price movements.
