India semiconductor sector seeks to build ancillary ecosystem and AI capabilities

India is working to strengthen its semiconductor industry by addressing gaps in its supporting ecosystem and expanding into AI infrastructure. While the India Semiconductor Mission (ISM) 1.0 has approved 12 projects worth approximately Rs 1.64 lakh crore, industry experts note that the country remains heavily dependent on imports. Currently, imports meet an estimated 90% to 95% of domestic chip demand, specifically for semiconductor-grade materials, specialty chemicals, gases, substrates, equipment, and critical minerals like gallium and germanium.

To support manufacturing, experts emphasize the need for a robust network of ancillary companies, reliable infrastructure, and specialized talent. Developing such an ecosystem is expected to take between 5 and 15 years.

In a related move toward high-tech manufacturing, Dixon Technologies is exploring opportunities in silicon photonics and advanced semiconductor packaging. The company aims to enter the AI data center infrastructure market by evaluating partnerships and acquisitions to build capabilities in high-speed optical transceivers. Vice Chairman and Managing Director Atul Lal stated that the goal is to bring these technologies to India to serve global markets.