India is building fabs, but real control lies deeper. So what will it take to truly own technology, beyond chips and into systems?
Who really controls technology? When you buy a car today, who truly controls it? It may seem like the manufacturer or OEM does, but in reality control increasingly lies elsewhere: embedded software, proprietary hardware modules, and opaque ‘black box’ systems. These components often originate from foreign vendors, leaving users and even manufacturers without full control over functionality, bug fixes, or security. This raises a fundamental concern: are we merely users of technology, or do we truly own it? India’s growing push towards indigenous semiconductor design and system-level control stems from this very question.
The core problem
Across critical sectors such as automotive, defence, industrial automation, and the Internet of Things (IoT), India faces a deep-rooted structural challenge: systemic dependence on foreign intellectual property (IP). Much of the core technology powering these domains, ranging from microcontrollers and communication interfaces to safety modules and firmware stacks, is designed, owned, and controlled by external entities. While these imports enable rapid development and deployment, they come at the cost of limited transparency and diminished control over how systems function at their most fundamental level.
This dependence creates cascading limitations. Indian developers and system integrators often lack access to low-level architecture, firmware layers, and internal design documentation, making even minor modifications or optimisations difficult. When failures occur, whether due to bugs, performance issues, or unexpected behaviour, teams cannot independently diagnose or resolve them, and instead rely on external vendors for fixes and timelines. This not only slows innovation but also introduces uncertainty in mission-critical applications.
The challenge becomes more acute in areas requiring customisation and security assurance. Without ownership of the underlying IP, tailoring systems to specific operational environments, such as Indian road conditions, defence needs, or industrial constraints, is severely constrained. At the same time, the inability to audit internal system behaviour raises serious concerns about hidden vulnerabilities, backdoors, and supply chain risks, particularly in strategic sectors.
As a result, many systems operate as opaque ‘black boxes’: inputs and outputs are visible, but internal logic remains inaccessible. This lack of visibility leads to a broader loss of control, in which external stakeholders effectively dictate key decisions regarding system behaviour, updates, and lifecycle management. Over time, this undermines technological self-reliance and exposes critical infrastructure to risks that cannot be fully mitigated domestically.
In essence, despite building and operating these systems, we do not truly own them. We interact with them, depend on them, and deploy them at scale, yet core control lies elsewhere. The result is a stark reality: we have built and integrated systems at scale, yet ownership of core intelligence often lies outside our borders. We remain participants, almost ‘guests’, inside systems that are critical to our own infrastructure.
Why now?
While India’s dependence on external technologies is not new, its strategic urgency has intensified significantly in recent years. This shift is not incidental; it stems from converging forces across policy, global supply chains, and security realities that have collectively exposed the risks of technological dependence.
A key driver has been the government’s strong policy push since 2014. Flagship initiatives such as Make in India and Atmanirbhar Bharat have laid the groundwork for domestic manufacturing and self-reliance. Building on this, targeted missions, including the National Semiconductor Mission, National AI Mission, and National Quantum Mission, aim to address critical gaps in high-technology domains. These are not merely economic programmes; they reflect a deliberate push towards end-to-end technological sovereignty, where India can design, develop, manufacture, and control its own technology stack.
Simultaneously, global supply chain disruptions have acted as a wake-up call. Recent events have exposed the fragility of semiconductor ecosystems, where production is concentrated in a few regions and firms. This concentration has led to shortages, delays, and cost escalations across industries, from automotive to consumer electronics, while highlighting the risks of overdependence on a limited set of global players. For India, this creates vulnerability to geopolitical shifts, trade restrictions, and unforeseen disruptions.
In parallel, security concerns have grown more pronounced. Modern electronic systems are deeply layered, with potential vulnerabilities spanning hardware design to firmware implementation. Risks such as hardware-level backdoors, firmware exploits, and unverified IP blocks are particularly critical in sectors like defence, infrastructure, and transportation. Without full control over the technology stack, detecting, preventing, and responding to such threats becomes extremely challenging.
Together, these factors have transformed what was once a long-term developmental goal into an immediate strategic priority. The focus has shifted from cost and convenience to control, resilience, and security, making indigenous capability development not just desirable but essential.
India’s semiconductor growth story, spanning automotive, industrial, IoT, and defence sectors, is no longer just an economic opportunity; it is now central to national resilience, strategic autonomy, and long-term technological control.
Gaps in the current ecosystem
Despite notable progress in policy, funding, and ecosystem development, India’s semiconductor and electronics landscape continues to face several structural gaps that hinder its journey towards true self-reliance. These challenges are not isolated; they are deeply interconnected and must be addressed holistically.
- Fragmented development, driven by siloed teams and limited cross-functional coordination, reduces interoperability and significantly complicates integration, debugging, and scaling.
- A critical skill gap in hardware-software integration remains a major challenge. There is a shortage of engineers skilled in both hardware and software, with most specialists focused on one area and lacking experience in firmware and system-level design. This hinders the development of efficient, deeply integrated systems.
- Continued reliance on foreign EDA tools is another major concern. These tools are essential for chip design, yet India depends heavily on a small number of global providers. This dependence limits flexibility, raises costs, and constrains long-term technological autonomy.
- A lack of emphasis on early-stage validation also weakens the ecosystem. Systems often fail not because of flawed design, but because of inadequate testing. Delayed checks for EMI, thermal performance, and real-world operating conditions make fixes expensive and degrade overall system performance. Early-stage, ‘left-shifted’ validation is essential to identify issues before they become costly system-level failures.
- Infrastructure remains another weak link. Limited access to affordable prototyping, testing, and certification labs restricts grassroots innovation. As a result, promising ideas often remain theoretical and fail to transition into production-ready systems.
Together, these gaps highlight a crucial reality: building a semiconductor ecosystem is not just about funding or fabrication units. It requires deep systemic alignment across skills, tools, processes, and infrastructure. Addressing these foundational challenges will be key to transforming India from a participant in the global electronics landscape into a true leader.
Why silicon alone is not enough
A key realisation emerging from India’s semiconductor journey is both surprising and transformative: silicon itself accounts for only a small fraction, roughly 10%, of a product’s overall success. The remaining 90% is determined by everything that surrounds the chip, how it is integrated, validated, adapted, and deployed in real-world environments. This insight fundamentally shifts the narrative from a narrow focus on chip fabrication to a broader, system-level perspective.
Even if India successfully establishes fabrication units (fabs) and ATMP (assembly, testing, marking, and packaging) facilities, that alone does not guarantee success. The real challenge begins after the silicon is ready.
At this stage, system architecture design becomes crucial. Without a well-defined architecture tailored to specific use cases—whether automotive, industrial, or defence—the chip cannot deliver meaningful value. Architecture determines how different components interact, how efficiently resources are utilised, and how well the system performs under real-world constraints.
Equally important is the development of robust validation ecosystems. A chip that performs well in controlled lab conditions may fail when exposed to practical environments involving temperature variations, electromagnetic interference, mechanical stress, or inconsistent power conditions. Comprehensive validation frameworks covering reliability, safety, and compliance are essential to ensure products are not only functional but also dependable at scale.
Beyond the hardware, application-layer development plays a defining role in shaping user experience and functionality. Software frameworks, middleware, and domain-specific applications must be tightly aligned with the underlying hardware to unlock its full potential. Without this layer, even the most advanced silicon remains underutilised.
Finally, manufacturing readiness is a decisive factor in bridging the gap between prototype and production. This includes ensuring consistent quality, scalable production processes, supply chain coordination, and adherence to industry standards. A design that works in the prototype stage may encounter unforeseen challenges when scaled to mass production, particularly in diverse and demanding conditions such as those found in India.
Taken together, this perspective underscores a critical shift: success in the semiconductor domain is not defined by the chip alone, but by the strength of the entire ecosystem built around it.
| The missing layer: System-level thinking |
| India often focuses on component-level development, but the real need is end-to-end system ownership. This includes: • Architecture design • Hardware-software co-design • Validation pipelines • Deployment strategies |
Accelerators: The untapped opportunity
As India aspires to strengthen its semiconductor ecosystem, a strategic question arises: Where should it compete first?
Entering highly complex and capital-intensive domains such as CPUs and GPUs, dominated by global giants, may not be the most pragmatic starting point. Instead, a more focused, high-impact pathway lies in developing specialised hardware accelerators.
Accelerators are purpose-built chips designed to execute specific tasks with high efficiency. Unlike general-purpose processors, they are optimised for targeted applications such as EV motor control, functional safety systems, edge AI inference, signal processing, and hardware-based security modules.
These domains are rapidly expanding, particularly in sectors such as automotive, industrial automation, and smart infrastructure, where India already has a growing market presence.
Despite their importance, India currently lacks a strong foothold even in accelerator design and deployment. This gap, however, presents a unique opportunity. Compared to CPUs and GPUs, accelerators offer a lower barrier to entry, require smaller teams, and can be developed with domain-specific expertise.
More importantly, they allow Indian companies to solve localised problems—such as optimising for Indian road conditions, power environments, or industrial use cases—while gradually building deeper capabilities in silicon design.
In essence, accelerators provide a practical and scalable entry point into the semiconductor value chain, enabling India to create immediate impact while laying the foundation for more advanced innovations in the future.
Role of OEMs: Owning the architecture
A critical missing link in the current ecosystem is the limited involvement of OEMs, particularly in sectors like automotive. Traditionally, many OEMs rely heavily on externally developed architectures and pre-integrated solutions, which restrict their ability to differentiate, optimise, or innovate at a system level.
To unlock the full potential of indigenous development, OEMs must take on a more proactive role by owning the system architecture. This begins with clearly defining:
- The functional requirements of the system
- The specific use cases relevant to Indian conditions
- Performance, safety, and cost constraints
Once this architectural blueprint is established, OEMs can collaborate with startups, semiconductor companies, and research institutions to develop tailored solutions.
Such an approach enables a modular and collaborative ecosystem in which multiple players contribute specialised components that integrate into a cohesive system.
The benefits of this shift are significant. It enables the creation of customised solutions optimised for Indian environments, improves safety and performance through tighter control, and fosters scalable innovation by opening opportunities for smaller players to participate in the value chain.
Building a collaborative ecosystem
For India to transition from aspiration to execution, it must adopt a collaborative, ecosystem-driven approach. No single entity—whether government, industry, or academia—can achieve this transformation in isolation.
First and foremost, there is a need to break down silos and encourage collaboration. Startups, academic institutions, OEMs, and government bodies must work in tandem, sharing knowledge, resources, and infrastructure. A cooperative model will not only reduce duplication of effort but also accelerate innovation and standardisation.
Equally important is the development of indigenous tools, particularly in the domain of EDA and simulation platforms. These tools form the backbone of semiconductor design, and without local alternatives, true independence remains elusive.
Another critical area is the creation of shared prototyping infrastructure. Accessible labs, testing facilities, and compliance-ready environments can empower students and early-stage innovators to transform ideas into working prototypes, bridging the gap between theory and practice.
In parallel, India must place a strong emphasis on excellence in validation. Testing and verification should not be treated as an afterthought but integrated into the earliest stages of design. This ensures that products are robust, reliable, and ready for real-world deployment.
Finally, the ecosystem must invest in developing hybrid talent: engineers who are equally comfortable working with hardware, firmware, and software. Such multidisciplinary expertise is essential for building complex, integrated systems.
The concept of indigenisation is often misunderstood as simply replacing imports with locally manufactured alternatives. However, this is a narrow and incomplete view. True indigenisation is about ownership and control. It means having the ability to:
- Understand and govern system behaviour
- Diagnose and fix issues independently
- Customise solutions for specific needs
- Ensure security, reliability, and long-term sustainability
In this context, self-reliance is not just about where a product is made; it is about who controls its intelligence and decision-making.
Building a robust and indigenous semiconductor ecosystem is inherently a long-term endeavour. It requires sustained commitment, significant investment, and a willingness to navigate long development cycles. Unlike software, where results can be realised quickly, semiconductor innovation demands patient capital and strategic foresight.
Equally important is the need for ecosystem-wide alignment. Success will depend on how effectively different stakeholders, government, industry, academia, and start-ups, align their efforts towards a common goal.
The rewards of this journey, however, are profound. Achieving technological sovereignty will not only strengthen national security but also drive economic growth, create high-value jobs, and position India as a competitive force in the global technology landscape.
Today, India stands at a pivotal moment. The choices made now will determine whether the country remains a consumer of advanced technologies or evolves into a creator and controller of its own technological future.
The semiconductor journey is not about catching up with the world, it is about building with clarity, conviction, and control. With the right alignment, India will not merely participate in the global electronics ecosystem, it will help define its next chapter.
Poonam Gupta, Founder/Innovator, VayuLink Semiconductor, Swaraj Silicon/IndiChip Founder Circle
This article is based on a technical session delivered at Pune Expo 2026, Pune, by Poonam Gupta, Founder/Innovator, VayuLink Semiconductor, Swaraj Silicon/IndiChip Founder Circle. It was transcribed and curated by Akanksha Sondhi Gaur, Senior Technical Journalist at EFY.
