India is set to significantly boost its semiconductor manufacturing capabilities with two new chip packaging units becoming operational by December, while simultaneously accelerating its focus on artificial intelligence, data centre expansion, and global digital infrastructure.
Key Points
- Two new semiconductor chip packaging units are slated to become operational by July and December, respectively, under the ~76,000 crore India Semiconductor Mission.
- India aims for domestic commercial production of micro-LED displays within 22 months, capitalising on the technology's current inflexion point.
- The government is actively increasing India's presence in the data centre sector, with a 20-year tax break attracting nearly $200 billion in investments.
- New subsea cable networks are being built to connect Indian data centres globally, linking Vizag to Australia/US, and the southern coast to the Middle East/Europe/US.
- India is collaborating with global companies like Google to boost domestic production of AI servers, anticipating 15-20 per cent annual AI-led job growth.
The third and fourth semiconductor chip packaging units, approved by the government under the ~76,000 crore India Semiconductor Mission, should be operational by July and December, respectively, Union Electronics and Information Technology Minister Ashwini Vaishnaw said on Monday.
Speaking at the 2026 edition of the Confederation of Indian Industry (CII) Annual Business Summit, Vaishnaw said in addition to commercial production of chip packaging, the first domestic commercial production of micro-light-emitting diode (micro-LED) display should begin within the next 22 months.
Boosting Domestic Manufacturing & Display Technology
As prices of micro-LED display units keep coming down, there is an opportunity for India to take the lead since the display technology is at an inflexion point right now, he said.
The growth in artificial intelligence (AI) is happening at an unprecedented pace, as newer, higher-level technologies emerge every few weeks, Vaishnaw said.
"Every month, we need a new way of working coming out from some part of the world.
"And this is where we must be very clear in our approach that we have to be the beneficiaries of this (AI) technology by increasing our productivity in any sector that we work in," he said.
Expanding Data Centre Infrastructure and Global Connectivity
To capitalise on the growth of AI, the government is focused on increasing India's presence in the data centre sector, the minister said, adding that the 20-year tax break announced for setting up new data centres in the country was a "leap of faith" by the government.
The tax break measures have already started paying off, as investments close to $200 billion have been announced for the data centre sector so far, he said.
To strengthen India's presence in the data centre economy, the government is also building new subsea cable networks that will connect large domestic data centres to other parts of the world, Vaishnaw said.
"One is from Vizag (Visakhapatnam) to Australia, and then on to the US.
"The second is across the southern coast of India, connecting it to the Middle East and Europe, and landing on the East Coast of the US," he said, adding that a third network around the Cape of Good Hope connecting India directly to the US was also in the works.
AI's Impact on Job Growth and Server Production
These subsea cables will provide India with a new digital infrastructure and become an important part of the country's growth journey, he said. "Our strategy is very clear on becoming the use-case capital of the world," Vaishnaw said.
The government is also in touch with the domestic information technology (IT) and information technology-enabled services (ITeS) industry, which believes that AI-led job growth will be around 15-20 per cent per annum. "Many other parts of the IT industry will have to be transformed now, but AI-related job growth is happening. We have to be very careful in it," he said.
India is also working with global companies such as Google to increase the production of AI servers in India, as the quality of these products is comparable to AI servers being manufactured in other parts of the world, Vaishnaw said.
