India set to begin commercial chip manufacturing under Semiconductor Mission

Government says the inaugural chip manufacturing project under India Semiconductor Mission 1.0 will start commercial production this month, with Micron set to manufacture high-bandwidth memory for AI systems, boosting domestic semiconductor capabilities.

India’s semiconductor manufacturing ambitions are set to reach a key milestone, with the first of 10 approved projects under the government’s flagship programme scheduled to begin commercial production by the end of February.

Speaking at the India AI Impact Summit in New Delhi, S Krishnan, Secretary at the Ministry of Electronics and Information Technology (MeitY), confirmed that projects cleared under the India Semiconductor Mission (ISM 1.0) are progressing as planned.

Micron to manufacture AI-focused memory in India

Among the approved proposals, US-based Micron Technology is set to manufacture high-bandwidth memory (HBM) components in India. HBM is a crucial technology for advanced artificial intelligence workloads, supporting high-speed data processing in AI accelerators and data centre environments.

“The first of the 10 approved projects under the India Semiconductor Mission (ISM 1) will begin commercial production by the end of February,” Krishnan said during the summit. He noted that Micron’s production of HBM would mark an important step in strengthening India’s role in the global semiconductor value chain, particularly in AI-driven applications.

The development signals tangible progress in India’s efforts to reduce dependence on imported chips and establish itself as a manufacturing hub for critical electronic components.

ISM 2.0 and compute-led growth strategy

Krishnan also highlighted the launch of India Semiconductor Mission 2.0, announced in the Union Budget on February 1. The second phase aims to deepen domestic capabilities with continued policy and financial support from the government.

In addition, recent budget clarifications have addressed tax treatment for overseas firms establishing AI cloud and data-centre infrastructure in India for global operations. The move is designed to attract large-scale compute investments and position India as a preferred destination for AI infrastructure.

With one of the world’s largest power grids and rapidly expanding renewable energy capacity, India is seeking to build a sustainable data-centre ecosystem capable of serving both domestic demand and international AI workloads.

Krishnan emphasised that the government’s strategy prioritises expanding access to AI computing power rather than directly financing data-centre construction, reflecting a policy focus on enabling affordable and scalable compute resources for innovation and industry growth.