Making chips in India: what fabs, packaging and testing actually do
Follow a chip through the factory—and see why India is investing in different parts of its production.
The electronics ministry scheduled SEMICON India for 17–19 September 2026 in New Delhi. Its 14 September announcement places the event at Yashobhoomi, with the inauguration set for 17 September. Its theme, “Silicon to Systems”, points to the question behind the factory announcements: what does it take to turn silicon into something a phone or computer can use?
The answer involves several industries working together. Designing a chip, building its circuits and preparing it for installation are different jobs. A country can gain an important part of that work while continuing to rely on factories elsewhere for other parts.
That is why two announcements about “chip manufacturing” can describe very different achievements. To understand India's progress, follow the physical product through the factory.
First, a design becomes a wafer full of circuits
A chip starts with a design: engineers decide what it should do and how its circuits should be arranged. Some companies specialise in design and hire another business to manufacture it. They are called fabless companies. A foundry manufactures chips for customers; a fab, short for fabrication plant, is the factory where the circuits are built.
Inside the fab, the starting surface is a thin disc of semiconductor material called a wafer, commonly silicon. Machines repeatedly add, pattern and remove materials to build electronic structures and the connections between them. Lithography uses light to transfer patterns onto a light-sensitive coating. It is one part of a much longer process.
The same chip pattern is repeated across the wafer. Each eventual individual piece is called a die. ASML's manufacturing explanation describes layers that must align with extraordinary precision inside tightly controlled cleanrooms. A speck of contamination can damage the result. The difficult achievement is making working circuits reliably, again and again.
Decide the function and circuit layout.
Build many copies of the circuits on a wafer.
Connect and protect the individual die.
Check performance and reliability before delivery.
Simplified sequence. Inspection and testing also happen earlier in production. Sources: ASML and Intel.
Packaging makes the silicon usable
A bare die is small and delicate. It needs electrical connections to the equipment around it, physical protection and a way to handle heat. Semiconductor packaging supplies those functions. It is engineering work on the component itself, before the finished product is put into a shipping box.
Intel's assembly-and-test guide follows die being attached to a supporting substrate, reinforced and connected, then put through electrical and reliability tests. The exact package depends on the product. Some contain multiple die, and advanced packaging can connect several pieces of silicon into one closely integrated system.
Testing establishes whether the part meets its specifications. A factory can produce a large number of parts and still have a problem if too many fail, or if customers cannot rely on the ones shipped. This is why shipment quality matters alongside the headline production number.
Two abbreviations often appear in Indian announcements. ATMP means assembly, testing, marking and packaging. OSAT means outsourced semiconductor assembly and test: a business doing that work for other companies. Both describe capabilities distinct from fabricating the circuits on the wafer.
Sanand and Dholera show the difference
Micron's Sanand facility in Gujarat provides a concrete example. At its 28 February 2026 opening, the company said commercial production had begun. It described the facility as converting DRAM and NAND wafers from Micron's global manufacturing network into finished memory and storage products. Those are the kinds of components used to hold working data and retain stored information.
The incoming wafer has already been fabricated. Sanand adds assembly and testing in India, and the finished product goes onward to customers. Micron reported a first shipment of memory modules to Dell at the opening. At the time, Micron expected to assemble and test tens of millions of chips during 2026.
Tata Electronics' Dholera project addresses another stage. Its foundry page describes a planned 300 mm wafer fab developed with Taiwan's PSMC, with expected capacity of 50,000 wafers a month. Tata lists power-management chips, microcontrollers and display drivers among its intended offerings.
Why India is investing in more of the chain
The government's Semicon 2.0 announcement links support for chip design and manufacturing to a more resilient supply chain. It also includes machines, materials, research and training. The aim is to develop the businesses and skills that keep factories running, as well as the factories themselves.
Sanand shows what one part of that effort can deliver. Imported fabricated wafers still supply the circuits, while assembly and testing take place in India. A working Dholera fab would add the ability to build circuits here. These stages create different work for engineers, technicians and suppliers; expanding one stage leaves the others important to the finished product.
The government has committed a budget outlay of ₹1,27,500 crore to Semicon 2.0. That puts public money behind the effort to attract investment and develop capabilities. The return depends on factories securing customers and producing reliably, and on the supporting skills and suppliers taking root. Approval and construction are early milestones; sustained commercial output is the more demanding test.
Why the biggest number can mislead
A wafer and a finished chip are different counting units. One wafer holds many die. How many depends on the wafer's size, the area of each die and the space lost around the edges. Some die fail tests. Some finished packages contain more than one die.
So 50,000 wafers a month cannot be compared directly with millions of packaged chips a year. First establish what is counted, over what period, and at which manufacturing stage. Then distinguish a factory's planned capacity from actual output and shipments.
The same care helps with the phrase “made in India”. The useful follow-up is which operations took place here. Design, wafer fabrication, packaging, testing and final electronics assembly each tell you something different about the skills, equipment and suppliers being developed.
What to watch at SEMICON India
The organiser's draft agenda includes manufacturing, packaging, equipment and design. That breadth reflects the connected nature of the industry. A working fab needs tools and materials; a packaging operation needs components and testing expertise; both need customers who accept the output.
When an announcement arrives, look for the stage, the milestone and the customer. A partnership agreement, equipment installation, trial production and commercial shipment mark different points in a project's life. A stated customer shipment is more concrete evidence of delivery than a capacity target alone.
For each new plant, ask: what enters this factory, what leaves it, and who is ready to use it?