This article has been contibuted by Bharat Bafna, CEO & Co-founder, Ameya Perfomatt, Chairman TiECon Vadodara’25 & Vice-President, TiE Vadodara
India has launched an ambitious $10B+ semiconductor mission to capture value in chip manufacturing and design, with major government incentives focused on fabs, design houses and packaging. This push mistakenly targets only the visible parts of the stack—fabs, foundries and fabless design—but risks overlooking a quieter, indispensable layer: the chemicals and materials ecosystem. From photoresists and etchants to high-purity gases and specialty polymers, these inputs determine yield, performance and cost.
Without a domestic supply of these high-end materials, fabs will remain exposed to supply shocks, foreign pricing power and long lead times. The semiconductor story in India will be incomplete unless materials are deliberate part of the national strategy. This has been story Sector after sector, the visible parts which possibly policy makers are able to comprehend well are addressed by this Pro-Reforms, extremely Proactive Government & critical parts for the whole picture are essentially missed.
Let’s understand the Semiconductor Value Chain beyond Chips
A simplified semiconductor value chain runs from design and IP, through wafer fabrication, to assembly, testing and packaging. But tucked into wafer fabrication are hundreds of specialized consumables and materials: high-purity gases, ultra-pure chemicals, photoresists, developer solutions, CMP slurries, specialty adhesives, barrier films and advanced polymers. Each of these is formulated to exacting purity and contamination tolerances measured in parts per billion. Small chemical variations can cause catastrophic yield loss or reliability failures. In other words, fabs are the machine, but materials are the fuel and lubricants that decide whether that machine runs efficiently. Building reliable, high-quality materials Eco-System is therefore as critical as building the fabs themselves.
The Global Reality Check
Leading semiconductor nations—Taiwan, Korea, Japan and the United States—didn’t just build fabs; they nurtured domestic chemical and materials ecosystems over decades. Japanese and Korean suppliers dominate high-end photoresists, CMP slurries and specialty gases; U.S. firms lead in advanced process chemicals and packaging materials. As a result, these countries insulated their fabs from geopolitical disruptions and captured upstream value. By contrast, India today remains heavily import-dependent in any chemical sector, I still recall when Modi Govt took charge in 1st term, how they emphasised on API production in India.
The dependence on critical missing parts in overall supply chain for any product creates risks: sudden export controls, freight bottlenecks, currency swings and premium pricing. For an industry that prizes predictable yields and just-in-time supply, a fragile external supply chain isn’t just inconvenient—it can stall entire fabs and increase the cost of domestic chip production dramatically.
Why Chemicals & Materials are the Missing Piece
Semiconductor fabs operate at microscopic tolerances; contamination at trace levels destroys dies and ruins wafer lots worth millions. Meeting these demands requires precision chemistry, ultra-clean manufacturing, and rigorous quality assurance—capabilities that sit at the intersection of chemical engineering and advanced materials science. India’s specialty chemicals sector is large but there are no visible investments in foreseeable future in semiconductor-grade formulations and ultra-high-purity processes. The opportunity is twofold: India can upgrade existing chemical supply chains to semiconductor tolerances, and it can innovate in adjacent niches such as greener solvents and recyclable resist systems. Leveraging India’s deep talent pool in chemistry.
Building the Ecosystem: What Needs to Happen
Creating a resilient materials ecosystem requires huge policy push, capital and coordinated industry action. First, policy incentives must broaden beyond fabs: expand PLI to include specialty chemical manufacturers, surface-engineering firms and gas purification units for Fabs—providing capex support & tax benefits. In phase II, industry–academia collaboration is essential: create joint labs, fellowship programs and test-beds where universities, research institutes and companies co-develop formulations and contamination control techniques.
Third, startups and corporates must form R&D pipelines—small, agile ventures developing novel chemistries with established firms providing scale and market access. Dedicated seed funding, matched grants and incubation programs will accelerate commercialization. Fourth, set national quality and contamination standards aligned with international semiconductor norms to make Indian materials plug-and-play for global fabs. Fifth, promote global partnerships and technology transfer—encourage captive joint ventures and licensing agreements with established players to bridge near-term capability gaps. Finally, Govt’s to create shared infrastructure, analytical labs, and certification centers—so new entrants can validate product purity without prohibitive upfront investment. Together, these actions reduce supply risk, build domestic capability and unlock downstream value capture for India’s semiconductor ambitions.
Role of Indian Entrepreneurs & Startups
For entrepreneurs, the materials gap is a huge white space. Startups can move fast on specialized niches. These focused innovations can achieve product-market fit quicker than trying to replicate entire global suppliers. Corporate partners bring scale, regulatory experience and glazed client relationships; startups bring experimentation and R&D agility. Ameya Perfomatt’s journey exemplifies how a focused materials firm can serve broad industry needs—today serving roughly 70% of Indian industrial segments—highlighting the potential for similar firms targeting semiconductor grade requirements. With targeted support entrepreneurs can build supply chains that turn India from an importer to a reliable domestic source.
Looking Ahead: India’s Opportunity Window
Semiconductors are one of the Country’s strategic economic opportunity for 2030 and beyond—but chips without the materials that make them reliable are an incomplete story. The current global re-ordering of supply chains gives India a narrow window to build upstream capabilities while demand grows, which the policymakers cannot afford to miss, which will allow India can capture a larger share of the semiconductor value chain—moving from assembly and design toward true end-to-end capability. This would reduce import vulnerability, create high-skilled manufacturing jobs, and keep more value inside the country as its domestic fabs scale.
Chemicals and materials are the invisible backbone of any semiconductor ecosystem; they decide whether fabs deliver the promised yields and quality. India’s $10B+ mission is a powerful start, but to realize its full potential it must pair fab incentives with deliberate investments in material science, specialty manufacturing and standards. Policymakers, universities and entrepreneurs must seize these opportunities. Together, India can build a full-stack semiconductor ecosystem—that turn ambition into production and leadership. This is the need in each and every segment where India’s supply chain has major gaps & depends for those gaps to be filled perennially on imports & hence is vulnerable.
Nitin Konde
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