India’s semiconductor programme is typically narrated through fab and ATMP capacity. That framing captures investment momentum but misses where the strategic vulnerability actually sits. A fab is at the process level, a continuous consumer of chemistry (deposition, etch, lithography, CMP, cleaning and doping steps) with electronic-grade process gases (bulk and specialty, dopant and etch gases typically at 5N–6N purity), wet chemicals (sulfuric-peroxide and ammonia-peroxide cleans, HF), CMP slurries, photoresists, and substrates with contamination tolerances specified in parts-per-billion or -trillion for critical metallic and particulate impurities. A marginal purity deviation may not cause a visible failure immediately but it shows up weeks later as yield drift or reliability loss. This is the technical reality underneath a strategic fact.
Industry estimates the specialty chemical import dependence for India’s new facilities above 85 percent, with process equipment dependence comparably high. Strategically, this matters more than it would for an already mature industry, because these inputs are consumed continuously and cannot be substituted mid-process without full requalification. A facility cannot simply switch gas or slurry suppliers in response to a supply shock without absorbing weeks of qualification downtime. This is precisely the profile that defines supply-chain fragility. Semicon 2.0 is structured to close the gap by making equipment, specialty chemicals, industrial gases and materials a standalone incentive pillar. The mission marks a deliberate shift from treating materials as an input to be sourced globally to treating them as a domestic capability to be built. It is one of the most consequential structural changes in India’s semiconductor policy since the original mission was launched. It targets the layer that determines whether the sector’s growth translates into actual resilience.
Not all import dependence carries equal difficulty to close. Advanced lithography and front-end capital equipment sit behind decades of compounding IP and a handful of global suppliers where near-term Indian entry at leading-edge nodes is not realistic. Materials are a genuinely different problem. They scale through process chemistry, contamination control and purification engineering, not proprietary tool architecture. India’s existing base in bulk and fine chemicals, pharmaceutical-grade purification and industrial gas separation is a credible technical starting point. Although, moving from industrial-grade to electronic-grade output requires dedicated ultra-clean lines, metals-free handling, and continuous particle monitoring that most Indian chemical producers do not have an adequate experience. This distinction matters for policy. It means scarce resources should go where India already has an edge, not spread evenly across every category. Some technology gaps are simply too wide to close quickly. Others are not. Policy should focus on the latter.
Some inputs make the strongest case for localizing first. These are the ones India consumes in high volume, needs constantly, and currently buys from just a few suppliers like process gases, wet chemicals, slurries and etchants. They also cost less to localize than substrates or precursors. So, every rupee spent here reduces more risk than elsewhere. Recent domestic chemical-industry partnerships under the mission to develop electronic-grade materials are a workable template to scale and the mission’s design leaves room for exactly this kind of entry, whether through joint ventures with established global materials leaders seeking a local manufacturing and qualification base, or through Indian chemical and gas companies building electronic-grade capability independently. Both routes are legitimate and, in practice, complementary. JVs bring proven process know-how and faster qualification against global fab specifications, while independent domestic entrants build the deeper, longer-term capability base the sector will need at scale. Semicon 2.0 should be read as an open invitation for both. Treat qualification infrastructure as the binding constraint. Fabs requalify suppliers only after statistically validated runs against tight contamination and consistency criteria, often spanning multiple quarters. Domestic entrants currently lack accessible, internationally benchmarked testing infrastructure to complete this efficiently. This reflects the limiting factor on faster localization is often qualification capacity, not manufacturing capacity. Extending government support to materials and equipment manufacturers is necessary but insufficient on its own. Structuring incentives around demonstrated yield and defect-density performance, and deliberately coordinating domestic suppliers with downstream fab and OSAT offtake commitments, aligns support with the outcome that actually matters for reliable, qualified supply rather than initial capacity announcements.
Fab and ATMP investment remains necessary as it is the anchor demand that makes a domestic materials industry commercially viable in the first place. But strategic autonomy in semiconductors is not achieved by owning the building. It is achieved by controlling or at minimum diversifying the inputs that run through it continuously. Semicon 2.0’s materials pillar is the first policy instrument squarely aimed at that problem and its success will depend on how companies (global majors entering via joint venture and domestic players building independently) actually step forward to occupy the space. So how do we measure real progress? Not by counting new facilities announced. The real number to track is simpler. How much of the material flowing through Indian fabs once they are running at full capacity, is domestically sourced and properly qualified. That single number connects the hard technical work of purification and qualification to the bigger strategic goal. This will define the material sovereignty across the semiconductor supply chain.
Courtesy PIB, Srinagar
(The Author is Chief Technology Officer (CTO) , Display & Materials at ISM, MeitY, Government of India)
