India Boosts Chip Mission as EU Faces Semiconductor Challenges

The Indian government has approved a Rs 1.25 lakh crore budget for the second phase of the India Semiconductor Mission (ISM 2.0). The plan aims to increase self‑reliance across the chip design, fabrication and packaging spectrum, addressing the fact that India imports over 90 % of its semiconductor needs – a market worth up to $45 billion today and projected to reach $300 billion within a decade. The only domestic fab announced so far is a joint venture between Tata Electronics and Taiwan’s PSMC at Dholera, Gujarat, targeting mature nodes (28 nm to 90 nm) for automotive and consumer applications. The Ministry is encouraging state governments to help build the required ecosystem.

At the same time, a European report warns that the EU chip sector faces a bleak outlook. The analysis highlights two major external pressures: U.S. export‑control policies that divert investment away from Europe, and China’s dominance over critical raw materials such as gallium and rare earths. Dependence on U.S. design software and the risk that Washington could restrict equipment maker ASML further exacerbate vulnerabilities. Internal challenges—high energy costs, limited private capital and a declining base of chip‑intensive industries—also squeeze margins for European firms focused on mature‑node production. The European Chips Act seeks to double the bloc’s share of global semiconductor output, but the report argues that only by leveraging existing strengths, such as ASML’s lithography leadership, can Europe improve its bargaining power.

Together, these developments illustrate a global race to secure semiconductor supply chains, with India pushing for domestic capacity while Europe grapples with geopolitical and structural headwinds.