How To Start Semiconductor Manufacturing Plant in India?

Semiconductor manufacturing

The semiconductor manufacturing industry is witnessing a rapid growth rate, with semiconductors emerging as the basic building blocks of all modern technologies such as artificial intelligence(AI), 5G network, electric vehicles, Internet of Things(IOT), etc. Semiconductor manufacturing is extremely important to overall electronics industry because they are an essential component of almost all electronics devices. There would be no smartphones, computers, TVs or radios without them. They are required by a large number of industries like consumer electronics, medical electronics, information technology, appliances, telecommunications, etc. Here in this blog we will be discussing how to start semiconductor manufacturing plant in India.

semiconductor manufacturing welcome image
semiconductor manufacturing highlights

Why Semiconductor Manufacturing Business Is Best To Start In India?

From smartphones to planes, semiconductors are required by plenty of industries especially electronics industry. Now the world is in danger of running out of semiconductors. According to the global news, automakers will lose more than USD 60 billion in revenues this year because chip shortages have led them to stop production temporarily. Another major important application of semiconductors is in Internet of Things (IOT), where physical devices of all kinds, all over the world will be connected to the internet, seamlessly collecting and sharing data over 5G networks. With the IOT, millions of devices will create data that need to be analyzed in data centres requiring semiconductors has proved semiconductor manufacturing as best business to start in India. Realising the potential of semiconductors, the Government of India is announcing plenty of schemes for entreprenurs to start semiconductor business. This move will definitely encourage India’s ambitions to be self-reliant in the electronics industry and result in 35,000 specialized jobs apart from indirect employment for 1 lakh people. With the scheme in place, government is expecting investments of around Rs.1.7 lakh crore in next 4 years.

Government of India unveils 76,000 crore Plan To Boost Semiconductor Manufacturing Business in India:

The Indian government has announced incentives worth 76,000 crore to boost semiconductor manufacturing business. The program aims to provide incentive support to companies that are engaged in silicon semiconductor fabrication, display fabrication, compound semiconductors, semiconductor packaging and design. As part of the scheme, the government will provide full support of upto 50% of project cost on pari-passu basis to applicants who are found eligible.

Semiconductor manufacturing incentive package

Semiconductor Business Overview :

The semiconductor company landscape is segmented by component type (Memory, micro component, OSD, analog, logic) and Application(automotive, communications, Industrial, data processing, consumer electronics). By 2025, semiconductor fabrication is set to experience sensational growth from ongoing development and innovation in connectivity, communications, automotive industry and data centres. Top 5 trends in semiconductor manufacturing busines are: 5G communication, Internet of Things (IOT), Artificial Intelligence(AI), autonomous cars and medical devices.

Applications of Semiconductors :

1. Household appliances :

Almost all the consumer electronics (household appliances like Fridges, Televisions, washing machines, air conditioners, etc.) need semiconductors. They are used to control temperatures, timers and automated features. Hence, there is constant evolution of semiconductors according to rising standards of people to make their life easier by providing more automated features. Earlier radios were large devices that used vacuum tubes to amplify an over-the-air signal and produce an audible sound. The development of transistors, which are semiconductors that function as both amplifier and electronic switch, allowed electronics industry to produce small and portable radios. This has made starting a semiconductor company as one of the most profitable manufacturing business ideas in India.

semiconductor manufacturing household appliances

2. Telecommunication :

In telecommunications, semiconductors are mainly used in smartphones, routers, pagers, etc. The role of semiconductors in telecommunication is to control machines. For example, in smartphones, semiconductors play role in display, navigation, battery use, 4G reception, etc. The basic building block of computers is transistor, and that is possible only with semiconductor fabrication.

Semiconductor manufacturing telecommunications

3. Automobile industry :

Cars, buses, planes and trains also use semiconductors. As the vehicles have shifted from analog to digital, they are finding its applications in different ways. Semiconductor devices are used for critical functions such as power management, safety features, sensing, display and control of the vehicle. They play an extremely important role in hybrid and electric vehicles. This has made entrepreneurs curious and they have started to search for how to start semiconductor company.

Semiconductor manufacturing automobile industry

4. Healthcare :

Semiconductors find its applications in devices used to perform complex and risky surgeries to operate with precision. They are used in monitors and pacemakers to control power, sensors, temperatures, pressures, etc.

Semiconductor manufacturing healthcare

5. Banking sector :

Semiconductors help banks keep your money and personal information safe as they are used in digital accounting and cloud platforms. Banks also need semiconductors for ATMs, security cameras and  in automated locking mechanisms.

Semiconductor manufacturing banking sector

Importance of Semiconductor Manufacturing Business To Boost Electronics Industry in India :

Semiconductor business play an extremely important role in electronics industry. They are used in manufacturing diodes, transistors, and integrated circuits. Such devices have wide range of applications because of their power efficiency, reliability, compactness and low cost. Due to high demand for semiconductors, entrepreneurs are searching for how to start semiconductor company to know the process of setting up the industry.

Technology transitions such as the rollout of 5G networks and IoT have increased semiconductor fabrication across the globe. The Indian government has recently realised the potential of electronics industry in terms of GDP growth and providing employment opportunities. Government has initiated The National Policy of Electronics (NPE) and “Make in India” to support electronics industry in India. NPE has proposed to set up over 200 electronics manufacturing clusters in India.

Here Are The Steps To Start Semiconductor Business:

First step to start semiconductor business is to conduct market research to identify the demand for semiconductors. The second step is to develop a business plan that outlines your vision, mission, goals and strategies. Third step is to establish a legal entity for your unit. The fourth step to start semiconductor company is to to design the manufacturing facility according to the latest industry standards and regulations. Then the entrepreneurs needs to procure raw materials and machinery required for semiconductors manufacturing. The final step is to start the production and do effective marketing.

The semiconductor manufacturing process is split into 2 sub-categories. Front end of the line (FOEL) in which transistors are manufactured and back-end-of-the line (BEOL) in which interconnects are created.

Front End is also called as wafer fabrication. Here in this process, silicon wafer is manufactured. A wafer is a round slice formed by cutting a single crystal column made of silicon(Si). It requires multiple process like crystal trimming, slicing, lapping, etching, polishing, etc. Before knowing how to start semiconductor business, it is important to know the semiconductor manufacturing process.

Semiconductor manufacturing front end

Back end of the line is second half of semiconductor manufacturing process in which individual devices like transistors, capacitors and resistors get interconnected by wiring of the wafer. Finally, the structure is electroplated with copper and ground flat using chemical mechanical polishing.

Semiconductor manufacturing process overview

Starting a Semiconductor Manufacturing Plant in India :

The Government of India has began to accept applications to start semiconductor company from January 1, 2022. To know more about the application process,


A semiconductor portal has also been launched for filing and processing applications from interested players. The scheme for setting up display fabs entails fiscal support of upto 50 percent of the project cost (12,000 crore per fab).

Future of Semiconductor Manufacturing Business:

Semiconductors are all around us. They control the computers we use to conduct business, the phones and mobile devices we use to communicate, the cars and planes that get us from place to place, the machines that diagnose and treat illness, the military systems that protect us, and the gadgets we use to listen music, watch movies, etc. Technology transitions such as the rollout of 5G networks and IoT are driving the accelerated adoption of electronics products having semiconductors performing wide variety of functions. The entrepreneurs needs to develop effective marketing strategies before knowing how to start semiconductor business.

Are You Interested To Set Up Semiconductor Manufacturing Plant ?

According to the India Electronics and Semiconductor Association (IESA), semiconductor consumption in India was worth USD 21 billion in 2019, growing at the rate of 15.1 percent. Research and development in this industry, which includes electronic products and embedded systems generated about USD 3 billion in revenue. India has witnessed sensational growth in electronics industry since make in India campaign 2015. Register to SolutionBuggy and get all the services required to start semiconductor manufacturing plant in India. Being India’s largest platform in electronics industry, we provide all the services to start semiconductor business. SolutionBuggy with the network of more than 500 electronic consultants will provide services to all your industrial requirements.

Frequently Asked Questions (FAQs)

1. Does SolutionBuggy help in Detailed project report and Market Research report to start semiconductor manufacturing industry?

Yes, SolutionBuggy has India’s best market research experts to prepare market research report and project report.

2. Does SolutionBuggy help in setting up semiconductor manufacturing unit?

Yes, SolutionBuggy provides all the services required to set up and scale up semiconductor industry.

3. Is there a demand for semiconductors?

Absolutely yes. With the introduction of IOT, AI, 5G network, electric vehicles, demand for semiconductors is sky high.

4. Why there is shortage in semiconductors?

Lack of skilled labours and trade war between U.S and China are the main reasons for semiconductor shortage.

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