The semiconductor industry is often described as the backbone of modern technology, powering everything from smartphones and electric vehicles to defense systems and satellites. For India, building a domestic semiconductor ecosystem is not just about industrial policy; it is a matter of economic sovereignty and strategic security. The government’s India Semiconductor Mission (ISM) is an ambitious step, offering billions in incentives to attract global players and nurture domestic champions.
Yet, beneath the optimism lies a sobering reality: India’s power infrastructure is not yet aligned with the unforgiving demands of semiconductor manufacturing.
The Power-Hungry Nature of Fabs
Semiconductor fabrication plants (fabs) are unlike any other manufacturing unit. A single advanced fab consumes between 100 and 150 megawatts of continuous electricity; equivalent to powering a mid-sized city of 100,000 homes. The requirement is not just scale but quality and reliability. Power interruptions, voltage fluctuations, or even minor disturbances can destroy entire batches of wafers worth millions of dollars.
This is why fabs across the world are located in regions with deeply resilient power grids.
India’s Installed Capacity vs. Reliability Gap
With an installed capacity exceeding 446 gigawatts, it has steadily transitioned from power deficit to power sufficient in aggregate terms. China has 100% surplus power and added 450 GW just this year with over 3500 GW installed capacity.
However, the challenge lies in grid stability, quality of supply, and regional consistency. Blackouts during heatwaves, load-shedding in industrial belts, and over-reliance on captive generation remain common. Semiconductor-grade reliability demands uninterrupted 24/7 supply with ultra-low tolerance for fluctuation; something the current infrastructure struggles to guarantee.
Even in earmarked zones like Dholera in Gujarat and YEIDA in Uttar Pradesh, the promise of stable power remains a work in progress. Much of the projected supply in these zones is linked to large solar parks. While commendable for sustainability, renewables alone cannot meet the round-the-clock baseload requirements of fabs.
Without sufficient backup from nuclear or other steady sources, the system risks exposing fabs to variability.
Lessons from Taiwan and China
The contrast with Asia’s semiconductor powerhouses is stark. Taiwan, home to TSMC, the world’s most advanced chipmaker, allocates power on a priority basis to its semiconductor industry. TSMC alone consumes more than 7% of Taiwan’s total electricity, supported by dedicated infrastructure investments and grid resilience measures. Taiwan’s grid is highly stable, ensuring fabs can run at full tilt without disruption.
China has pursued a different but equally strategic path: deliberate overcapacity in power generation to guarantee surplus electricity for its industrial clusters. Semiconductor fabs in provinces like Jiangsu or Guangdong enjoy uninterrupted, high-quality supply, often complemented by government-supported captive plants. This excess capacity provides the buffer that makes round-the-clock fab operations feasible.
Both Taiwan and China demonstrate that semiconductor success rests as much on reliable power as on policy incentives. Capital, technology transfer, and skilled manpower matter, but without electrons delivered cleanly and consistently, fabs cannot function.
India’s Policy Imperatives
India’s policymakers are rightly focused on financial incentives, ecosystem development, and skill creation. But the infrastructure dimension; especially power and water; must be elevated to equal priority. This requires a multi-pronged approach:
Dedicated Utility Corridors: Semiconductor zones should have ring-fenced power infrastructure with redundant supply lines and backup systems.
Baseload Strengthening: Alongside renewables, India must expand nuclear and other steady baseload sources. Small Modular Reactors (SMRs), for example, could provide localized, reliable supply.
Grid Modernization: Investments in smart grids, high-voltage direct current (HVDC) links, and real-time monitoring are critical to reduce fluctuations.
Policy Guarantees: Fabs need contractual assurance of uninterrupted supply; similar to how water and power are guaranteed for industrial corridors in East Asia.
Conclusion
India’s semiconductor ambition is both timely and necessary. Global supply chain realignments and the search for alternatives to China create a window of opportunity that may not remain open indefinitely. However, the path to chip self-reliance is paved not just with subsidies and policy enthusiasm but with infrastructure realities. Unless India addresses its power reliability deficit, fabs may find the environment too fragile to risk billions of dollars in investment.
Semiconductors are unforgiving; they demand perfection not only in nanometer design but in the utilities that support them. For India, ensuring a robust, uninterrupted power backbone is not an adjunct to semiconductor strategy; it is the foundation. Without it, the road to becoming a chip powerhouse risks remaining aspirational, while Taiwan and China continue to power ahead, quite literally.
A kite without a string is just paper lost to the wind; ambition without infrastructure drifts the same way. Gathering semiconductors without reliable power is like chasing scattered wool in the mountains.
-Yogi Kochhar yogi@yol.one
Yogi is a globally celebrated AI futurist and a happiness savant.
