Best Domestic Semiconductor Chips in Defence Industry

The Crucial Need for Indigenous Semiconductor Chips in the Indian Defence Industry
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In recent times, the global semiconductor industry has assumed unprecedented importance, not only for civilian technologies but also for military applications. India, with its thriving defence industry, finds itself at a crucial crossroads due to its heavy dependence on imported semiconductor chips. As semiconductors become the backbone of military equipment and networks, the lack of indigenous chip manufacturing capabilities has emerged as a significant concern. This blog explores the critical role of semiconductor chips in the Indian defence industry, the challenges faced by the country, and the initiatives taken to promote domestic chip manufacturing.

The Rise of Semiconductor Chips in the Defence Sector

Semiconductor chips have evolved from being supporting components to becoming the very foundation of modern military equipment. Virtually every aspect of military platforms, including combat jets, unmanned drones, warships, missiles, and communication networks, relies on these chips for command, control, and data storage. The emergence of IoT and 5G/6G technologies in the defence sector has further heightened the demand for these critical components.

India’s Dependence on Imported Chips

Despite the Indian government’s efforts to enhance its position in the global semiconductor value chain, the nation’s semiconductor demand is predominantly met through imports. Notable chipmakers’ exit from proposed investments in semiconductor manufacturing, such as Foxconn’s joint venture with Vedanta, has added to the challenges. The lack of adequate investments in the sector has hindered India’s quest for self-sufficiency in chip manufacturing.

Addressing the Challenges

To support the domestic semiconductor ecosystem, the Indian government recognizes the need to develop skilled and specialized human resources. The Ministry of Electronics and Information Technology (MEITY) stated that by 2027, India will require 10,000-13,000 skilled professionals to meet industry requirements. While India boasts a substantial pool of semiconductor design engineers, specialized talent for semiconductor plants is likely to come from overseas initially, with a gradual focus on local resource development.

Incentives and Initiatives

Acknowledging the challenges faced by the semiconductor industry, the Indian government has introduced various incentives to attract chipmakers. Notably, the production-linked incentive (PLI) scheme for semiconductor and display manufacturing projects offers financial incentives of up to 50% of project costs, amounting to a total of $10 billion. Such measures are aimed at promoting investments and nurturing a self-sufficient semiconductor manufacturing ecosystem in the country.

The Implications for the Defence Industry

India’s heavy reliance on foreign chip manufacturers poses challenges to its defence sector. The Ministry of Defence (MoD) has requested 5 lakh chips for various military applications, highlighting the magnitude of the dependence. This dependence restricts the potential for future upgrades and can lead to supply chain disruptions in times of geopolitical conflicts. Recognizing the significance of indigenous chips for security and self-reliance, the government aims to deploy 50,000 domestically designed and developed “secure chips” for the armed forces. Initiatives like the “deployment-linked incentive (DLI)” further support indigenous designing and manufacturing of secure semiconductor devices, fostering technological advancements within the country.

Overcoming Material Challenges

Besides financial incentives and talent development, the defence industry’s focus is on addressing the critical materials required for semiconductor manufacturing. Carbon fibre, silicon, tungsten, and boron carbide are essential elements, but their initial production demands significant capital investment. Overcoming these challenges is crucial to achieving self-sufficiency in semiconductor production.

Path Forward

The Indian defence industry’s dependence on imported semiconductor chips underscores the pressing need for indigenous manufacturing capabilities. As countries worldwide invest billions of dollars in building domestic semiconductor industries, India’s efforts to promote local chip manufacturing, through initiatives like the Semiconductor Mission and PLI schemes, are steps in the right direction. By nurturing specialized talent and addressing material challenges, India can bolster its defence capabilities, ensure supply chain resilience, and achieve technological self-reliance in this critical sector.


The importance of semiconductor chips in the Indian defence industry cannot be overstated. The nation’s quest for indigenous chip manufacturing capabilities faces challenges but also holds immense potential. With strategic investments, skilled talent and strong government support, India can build a robust semiconductor ecosystem that serves its defence needs and strengthens its position in the global semiconductor landscape.

Photo By: PEXELS

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