PrintFriendlySemiconductors are undoubtedly the next big thing and a crucial driver of the global economy. As the backbone of all electronics, they power everything from smartphones and electric vehicles (EVs) to AI, 5G networks, quantum computing, and defence systems. The rise of Artificial Intelligence (AI) and Machine Learning (ML) depends on advanced GPUs, TPUs, and AI chips. EVs require advanced semiconductors for battery management, autonomous driving, and infotainment. Tesla, Rivian, and legacy automakers are battling to secure chip supply for next-gen vehicles. Quantum chips will revolutionize encryption, medicine, and financial modeling. Edge computing chips are enabling real-time data processing for IoT, 5G, and autonomous systems. The chip market is forecast to top US$1 trillion by 2030.
The industry’s strategic importance is growing, making it one of the most critical sectors for investment and innovation. India, US and Japan are investing billions to build own semiconductor ecosystems to reduce reliance on Taiwan and China. India as a new semiconductor hotspot, is investing $10 billion under the Semicon India Programme to boost domestic chip manufacturing. Our National Policy on Electronics 2019 (NPE 2019) aims to make India a global Electronics System Design and Manufacturing (ESDM) hub and central to this policy is establishing semiconductor wafer fabrication facilities and associated chip component design and fabrication. With the global electronics market valued at around $2 trillion and anticipated growth from technologies like 5G, IoT, AI, Robotics, and Smart Manufacturing, semiconductors are vital.
If we look at the market projections, India’s semiconductor sector, valued at $23.2 billion, is projected to grow at a 17.1% compound annual growth rate (CAGR), reaching $80.3 billion by 2028. In terms of revenue potential, companies like NXP Semiconductors anticipate that India could contribute 8% to 10% of their revenue within the next three to five years. The revenue streams will generate from chip sales, foundry services, government incentives, IP & licensing, etc. Direct sales to tech companies (smartphones, EVs, AI, cloud computing), manufacturing for companies like Apple (TSMC), AMD (TSMC), and Qualcomm (Samsung & TSMC), subsidies and tax benefits and earning from patented chip designs and manufacturing processes are just few of them.
Tata Group is establishing India’s first indigenous semiconductor plant in Assam (OSAT facility with an investment of approximately ₹27,000 crore (around $3.6 billion). To be operational in 2025 it will create over 27,000 jobs. The expected ROI of the plant is 12-18%, with an expected break-even period of 5-7 years. The Dutch company, NXP Semiconductors plans to invest over $1 billion in India to double its research and development efforts, focusing on the expanding automotive and industrial sectors. Tower Semiconductor and Adani Group joint venture have announced a $10 billion investment to establish a semiconductor manufacturing project in Maharashtra, aiming to produce 40,000 wafers initially. Foxconn, Vedanta, and Micron are exploring semiconductor projects in India.
Assam is emerging as the next big growth story of India, displaying a robust average GSDP growth rate of nearly 13%. The GoA has identified key areas of transformation to achieve inclusive growth through the State’s development plan, Assam 2026. One such areas is electronics and semiconductor and through the Assam Electronics (Semiconductor etc.) Policy 2023, the State is embarking on a strategic journey to attract significant investments. The Semiconductor policy is designed to create a conducive ecosystem that envisages to encourage research, development, collaboration and creating a technological landscape that not only meets the domestic demand for electronics but also contributes to global supply chains. The policy emphasizes the development of world-class infrastructure, including industrial parks, technology incubators, and research facilities. The policy objectives highlights providing a comprehensive package of incentives, including land allocation, regulatory support, and financial assistance. It facilitates collaborations between industry, academia, and research institutions to drive advancements in semiconductor technologies, electronics manufacturing, and related domains. It targets creating a skilled workforce that will be made well equipped to meet the demands of the semiconductor and electronics sectors. Infact, skill development initiatives and vocational training programs are being designed to align with industry requirements. strengthening the entire value chain supporting research, design, fabrication, assembly, testing, and packaging activities, ensuring a holistic ecosystem. The policy in a way shall help to reverse the phenomenon of brain drain and migration as it also aims to bring youth of Assam working across the country and beyond back to contribute to Assam’s growth and development.
The policy takes into concern key issues such as adopting an environmentally sustainable practice, creating a multitude of employment opportunities for the local population and contributing to inclusive growth and socio-economic development. GoA also affirms to ensure the protection of Intellectual Property (IP) for all investors. Besides, smoothening regulatory processes, ensuring a business-friendly environment, simplified procedures for obtaining licenses, permits, and approvals.
One of the important attractions of the policy is the incentive framework. As capital subsidy, GoA has outlined to provide for an additional 40% of the capex assistance given by the GoI. Capital subsidy will be based on fixed capital investment and will be disbursed in the earmarked ratios over 5 years. GoA also plans to offer land-related incentives such as land at nominal prices and freehold transfer of land rights on case-to-case basis. The Government shall extend 100% exemption of stamp duty on lease/ sale agreement of land or built-up space allotted by Government / AIDC / AIIDC / designated development authorities to eligible projects / units under this policy. Incentive on power supply, power tariff up to 50% of power tariff for 10 years from commercial operations date is planned to be disbursed annually. The State Government will also facilitate uninterrupted potable water supply to Semiconductor projects at the ‘project site’ with the required quantities at the rate of Rs 5.00 / cubic meter for the first 10 years of operation. GoA also plans to provide further subsidy on water tariff, up to 100% of tariff, on a case-to-case basis. It shall provide SGST reimbursement on a case-to-case basis up to a maximum of 15 years, provide payroll assistance of 20% of net wages for local employees. Besides, social Infrastructure development, provision of green energy, accommodation support during development and implementation phase of the project, connectivity infrastructure development are all part of the Assam Semiconductor Policy. Through targeted interventions and strategic partnerships, fostering collaboration, trade, and technology exchange, Assam aims to make a significant mark on the global stage.
Semiconductors are not just the next big thing—they are the foundation of the future economy. As industries digitize, automate, and electrify, chips will remain the heart of technological advancement. And Assam is today well positioned to emerge as a leader in cutting-edge semiconductor technologies, propelling the state towards socio-economic progress. Besides Assam’s strategic location, robust infrastructure, and stable governance makes it an attractive for substantial investments in other areas too.
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