NEW DELHI - Japanese chip-linked companies are stepping up their foray into the Indian market, banking on Prime Minister Narendra Modi's initiative for India to become a leader in the semiconductor industry.
As the country looks to build a domestic chip manufacturing ecosystem from materials to design, fabrication, packaging and testing, industry executives say shortages of specialized suppliers and skilled workers remain key challenges.
The growing Japanese interest was on display at Semicon India 2026, held in New Delhi from Sept. 17 to 19 with participation from more than 30 Japanese companies.
About 200 Indian and Japanese industry representatives gathered at a roundtable during the event to discuss partnerships, technology ties, resilient supply chains for equipment and materials, and research and development.
India is seeking to establish itself as a global chip manufacturing hub through its state-backed semiconductor program. Modi has pledged to raise the budget to support the industry to about $13.5 billion from roughly $8 billion, as its India Semiconductor Mission program is shifting to the second phase.
Under the first phase of the program, India approved 12 semiconductor manufacturing and packaging projects.
Modi and Japanese Prime Minister Sanae Takaichi agreed in July to boost ties in the chip and other industries, with Japanese companies concluding about 120 memorandums of cooperation involving investments totaling 2 trillion yen ($12.7 billion).
Shetal Mehta, director of Gujarat-based Suchi Semicon Pvt. Ltd., which began commercial production during SEMICON India, said his company is working extensively with Japanese suppliers.
"We are working with a lot of equipment and material vendors from Japan," Mehta told Kyodo News on the sidelines of the event, adding that the company also has Japanese advisers and imports raw materials from Japan.
Among Japanese companies, Fujifilm Corp. agreed to develop and supply advanced semiconductor materials for Tata Electronics Pvt. Ltd.
"Fujifilm sees value in bringing manufacturing and technical support closer to customers, as India's semiconductor ecosystem develops," Koji Wada, managing director of Fujifilm India Pvt. Ltd., told Kyodo News.
Sumitomo Chemical Co. is considering a tie-up with Tata Electronics to set up a supply chain of semiconductor materials, while Enomoto Co. will provide production technology support to the Indian company.
Mani Rajesh Kumar, business head of Horiba India Pvt. Ltd.'s materials and semiconductor solutions department, said India has a large engineering talent pool but still lacks enough people with specialized semiconductor skills.
Tokyo Electron Ltd. is seeking to address that gap directly. The company's chief executive, Toshiki Kawai, said at SEMICON India that the chip-manufacturing equipment maker plans to establish a training center in Gujarat in 2027 in partnership with the Japanese government to develop equipment engineers.
Interest in India's expanding semiconductor sector is not limited to Japanese companies.
U.S. chip-making equipment maker Applied Materials Inc. said at SEMICON India that it will invest $5 billion in India over the next decade, while another U.S. company, Lam Research Corp., has said it plans to invest about 100 billion rupees ($1 billion) over the coming years.
South Korean semiconductor facility supplier Hae Kwang Co. is also seeing growing demand in India.
"Yes, demand is increasing," Tae Gyu Ha, the company's strategic planning senior manager, said, adding that the company is involved in a new project in Gujarat.
