Written By: Harsh Vardhan Singh

Thinking of entering a future-ready manufacturing business in 2026 that is backed by government policy, global demand, and long-term growth? A Semiconductor manufacturing franchise?

Semiconductor component manufacturing in India is rapidly emerging as one of the most discussed and closely watched investment opportunities for the coming decade. What was once seen as a long-term policy ambition has now started turning into an on-ground industrial reality. For years, semiconductors in India were limited to discussions in policy documents and strategy papers. Manufacturing was minimal, and the country remained heavily dependent on imports. Today, the situation is changing at an unprecedented pace.

India is no longer just planning to become a semiconductor hub. It is actively building one.

With strong government incentives, global technology partnerships, and multiple large semiconductor projects already under execution, the sector has moved from ambition to action. More importantly for investors, the opportunity is not limited to billion-dollar chip fabrication plants. The real investment window lies in semiconductor components, assembly, testing, packaging, and allied manufacturing units.

This is why interest in semiconductor manufacturing franchise models and component manufacturing partnerships is rising sharply as India heads into 2026.

Why Semiconductor Manufacturing Is So Important Right Now

Semiconductors are the backbone of the modern economy.

Every major technology we use today depends on electronic chips and components, including

• Smartphones and laptops
•  Electric vehicles and charging infrastructure
•  Telecom towers and 5G networks
•  Medical equipment and diagnostic devices
•  Industrial automation systems
•  Data centres and cloud infrastructure

Until recently, India relied heavily on imports for most semiconductor and electronic component requirements. Even today, more than 90 percent of advanced chips and critical components used in India are sourced from outside the country.

What makes the period leading up to 2026 different is both scale and intent.

India’s electronics consumption is growing rapidly, and domestic demand for semiconductors and components is expected to cross USD 80 billion by 2026. At the same time, global supply chains are being restructured due to geopolitical risks, supply disruptions, and over-dependence on a few manufacturing regions.

This combination of rising domestic demand and global diversification has created a rare opportunity for India to build a strong semiconductor manufacturing ecosystem from the ground up.

India Semiconductor Mission: The Biggest Growth Driver

The single most important catalyst behind India’s semiconductor push is the India Semiconductor Mission.

This is not a symbolic announcement or a one-time incentive. It is a structured national programme with clear financial backing and long-term intent.

Under this mission, the Government of India offers

•  Capital support of up to 50 percent for semiconductor fabrication units
•  Financial incentives for assembly, testing, and packaging facilities
• Support for semiconductor component manufacturing plants
• Faster approvals and single-window clearances
•  Infrastructure facilitation including power and water access
• Encouragement for global technology and design partnerships

Another important focus area of the mission is ecosystem development. Support is not limited to traditional silicon chips alone. It also includes

• Compound semiconductors
•  MEMS sensors
• Power electronics
•  Silicon photonics
•  Advanced packaging technologies

For investors exploring semiconductor component manufacturing or semiconductor manufacturing franchise models, this policy environment significantly reduces entry risk and improves long-term sustainability.

Semiconductor Projects Already Moving Towards Production

India’s semiconductor story is no longer about announcements alone. Several large projects are now moving towards execution.

Some key developments include:

Tata Electronics Semiconductor Fab, Gujarat

The plant is expected to manufacture 28 nanometre chips and is targeted to become operational around 2026.

Tata OSAT Facility, Assam

Tata Group is also developing a semiconductor assembly and testing facility in Assam. This OSAT unit strengthens India’s backend semiconductor capabilities and will generate large-scale demand for component suppliers.

Micron Technology, Gujarat

Micron Technology’s memory packaging and testing facility in Sanand, Gujarat has significantly boosted global confidence in India’s semiconductor ecosystem and supply chain readiness.

Alongside these flagship projects, multiple semiconductor and electronics manufacturing units have been approved under central and state government schemes. Combined investments across electronics and semiconductor manufacturing now run into several lakh crore rupees.

These projects require a large ecosystem of

• Component manufacturers
• Material suppliers
• Module producers
• Tooling and testing vendors
• Logistics and services providers

This opens doors for investors beyond large chip fabs.

Why Semiconductor Components Are the Real Investment Opportunity

While chip fabrication attracts headlines, semiconductor components form the real foundation of the industry.

Components include

• Power devices
•  Discrete semiconductors
•  Sensors and MEMS
•  Memory modules
• Connectors and cables
•  Printed circuit boards
•  Display and interface components
•  Specialised electronic modules

Industry estimates indicate that the semiconductor component and electronics manufacturing opportunity linked to India could reach hundreds of billions of dollars over the next decade, combining domestic demand and export potential.

Compared to full-scale chip fabs, component manufacturing offers several advantages.

Lower Entry Barrier

Component manufacturing requires significantly lower capital investment compared to fabs.

Modular Scalability

Production lines can be expanded gradually based on demand.

Multi-Sector Demand

Components serve automotive, telecom, consumer electronics, industrial automation, and defence sectors.

Export Potential

Global manufacturers are actively looking to diversify sourcing away from China

This makes component manufacturing an attractive entry point for investors, including those considering semiconductor manufacturing franchise partnerships or licensed production models.

Strong State-Level Incentives Supporting Growth

Apart from central government support, state governments are aggressively competing to attract semiconductor investments.

States such as

•  Gujarat
•  Tamil Nadu
•  Andhra Pradesh
• Uttar Pradesh
•  Karnataka
• Odisha
•  Punjab

have introduced dedicated electronics and semiconductor policies.

These policies typically offer

• Land subsidies and infrastructure support
• Tax reimbursements and SGST refunds
•  Power tariff subsidies
•  Interest subsidies on capital loans
•  Employment-linked incentives

For example

• Gujarat has positioned itself as a semiconductor hub with strong infrastructure support
•  Uttar Pradesh offers SGST reimbursements and interest subsidies
• Southern states leverage existing electronics manufacturing clusters and skilled manpower

This multi-layered incentive structure allows investors to choose locations that best match their capital size, logistics requirements, and long-term expansion strategy.

Why 2026 Is a Turning Point for Semiconductor Investors

Several developments converge around 2026.

• Large fabs and OSAT facilities are expected to start production
• Policy frameworks have stabilised and become predictable
• Global companies are actively diversifying manufacturing bases
• Domestic electronics demand continues to rise

Together, these factors make 2026 a clear inflection point. Investors entering semiconductor component manufacturing before this phase are positioning themselves ahead of demand rather than reacting later.

Investment Models Gaining Popularity in Semiconductor Manufacturing

There is no single way to enter this sector.

Standalone Manufacturing Units

Suitable for large investors with strong capital and technology partnerships.

Semiconductor Manufacturing Franchise Models

Established technology providers license processes, designs, or production standards to local manufacturing partners who operate units under defined guidelines.

Contract Manufacturing and Subcontracting

Global semiconductor firms outsource assembly, testing, PCB manufacturing, and module production to regional partners.

These models lower entry barriers and allow investors to participate without building everything from scratch.

Industries Driving Semiconductor Component Demand

Semiconductor component demand is diversified across industries.

Automotive Electronics

Electric vehicles, ADAS systems, and vehicle connectivity are driving demand.

Telecom and 5G

Telecom networks require specialised RF and power components.

Consumer Electronics

Smartphones, appliances, and wearables continue to scale.

Industrial Automation and IoT

Sensors and control units power smart factories and Industry 4.0 systems.

This diversification makes semiconductor component manufacturing resilient and future-proof.

Challenges Investors Must Be Prepared For

Despite strong growth prospects, semiconductor manufacturing has challenges.

•  Need for skilled engineers and technicians
• Higher capital intensity than traditional manufacturing
• Complex technology transfer agreements
•  Strict quality and supply chain standards

Structured partnership and franchise-style manufacturing models help reduce many of these risks by leveraging existing technology, processes, and ecosystem support.

Where Investors Are Actively Looking Today

Investor interest is currently concentrated in emerging semiconductor clusters.

• Gujarat for fabs and OSAT projects
•  Tamil Nadu for electronics and component manufacturing
• Andhra Pradesh for large-scale semiconductor projects
• Punjab and Odisha under central incentive schemes

Location selection plays a critical role in long-term success and cost efficiency.

Final Takeaway for Investors

India’s semiconductor journey is no longer speculative. By 2026, the ecosystem will be operational, interconnected, and commercially relevant.

Semiconductor component manufacturing sits at the centre of this transformation.

Whether through a standalone plant, a contract manufacturing unit, or a semiconductor manufacturing franchise model, investors entering this space now are aligning with long-term structural growth.

As global supply chains diversify and India strengthens its manufacturing base, semiconductor components will become one of the most strategic industries of the next decade.

For investors with patience and a long-term vision, this is not just another manufacturing opportunity. It is a chance to participate in the foundation of India’s technology-driven future

Disclaimer: The brands mentioned in this blog are the recommendations provided by the author. FranchiseBAZAR does not claim to work with these brands / represent them / or are associated with them in any manner. Investors and prospective franchisees are to do their own due diligence before investing in any franchise business at their own risk and discretion. FranchiseBAZAR or its Directors disclaim any liability or risks arising out of any transactions that may take place due to the information provided in this blog.