Invest India CEO Nivruti Rai outlined a strategy at Semicon India 2026 to capture the 'AI plus memory supercycle,' shifting focus toward advanced packaging and high-value design. With the global chip market projected to hit $2 trillion by 2027, the focus is moving from simple subsidies to domestic execution. Investors may track companies transitioning into advanced packaging and specialized chip materials.
Invest India CEO Nivruti Rai emphasized a change in India’s semiconductor strategy at the Semicon India 2026 event, aiming to capture the growing 'AI plus memory supercycle.' This transition marks a departure from earlier models, shifting focus toward high-complexity chip architecture, advanced packaging, and substrate materials rather than just basic manufacturing.
Shifting Toward Specialized Chip Tech
Rai noted that the global semiconductor market is expected to reach $2 trillion by 2027, driven by the intense data requirements of artificial intelligence. To participate in this growth, India is evolving its strategy away from standard chip assembly toward high-value areas like glass substrates, substrate materials, and advanced packaging. These components are essential for the modern GPUs and High Bandwidth Memory used in massive AI data centers. By targeting these specific supply chain gaps, the country aims to move beyond basic design and capture a larger slice of the global semiconductor market.
Building Domestic Execution Capability
The strategy emphasizes creating a robust domestic ecosystem capable of long-term self-sufficiency. A primary goal is to foster at least two local semiconductor design houses with annual revenues exceeding $1 billion. Current efforts include significant capital projects, such as the $2.2 billion investment by 3DGS in Odisha. While fabrication projects are high-profile, success in these areas depends on securing international collaboration for critical intellectual property and lithography tools.
Investors should note that semiconductor manufacturing involves long project timelines, high capital spending, and significant execution risk. Unlike simpler manufacturing, chip plants require continuous technological upgrades and stable, high-capacity power supplies to meet the massive energy needs of AI-linked data processing. The industry also faces challenges related to global supply chain dependency and the risk of commoditization if local firms fail to capture high-value design and packaging work. The market will track how domestic firms like Tata Electronics, Kaynes Technology, and CG Power execute their announced projects and whether they can successfully transition from basic assembly to specialized semiconductor packaging and design. The sustainability of this growth will depend on demand for these high-performance chips and the industry's ability to maintain economic viability without heavy reliance on government incentives.