India’s Semiconductor Boom Brings a New Cybersecurity Challenge

India’s expanding semiconductor programme is attracting major investment, but the country must prepare for cyberattacks, geopolitical tensions and supply chain disruptions as it builds a larger domestic chip ecosystem, industry leaders and Union Electronics and Information Technology Minister Ashwini Vaishnaw have cautioned.

The risks extend beyond chip factories themselves. Equipment, software, design systems, intellectual property, suppliers and connected manufacturing networks could all become points of vulnerability as India expands its semiconductor capabilities.

Why Is India’s Chip Expansion Facing New Risks?

India’s growing role in the global semiconductor value chain brings greater exposure to geopolitical and cybersecurity risks. Vaishnaw said India must remain alert while developing its ability to design and manufacture chips, particularly as more international companies begin treating the country as a manufacturing and technology partner.

He said geopolitical risks would have to be continuously monitored as India emerges as a country capable of designing and manufacturing chips.

Vaishnaw also said he had spoken candidly to semiconductor companies and deep-tech startups about the risks facing the sector. He urged them to strengthen cybersecurity systems and prepare for disruptions affecting manufacturing, research, supply chains and critical infrastructure.

Companies, he said, should be prepared for cyberattacks and other threats, including disruptions that could be created by countries that do not want India to advance in the semiconductor value chain.

Why Is the Global Supply Chain a Concern?

Ashok Chandak, President of the India Electronics and Semiconductor Association and SEMI India, said semiconductor expansion would expose India to geopolitical tensions, cyberattacks, supply chain disruptions and dependence on a relatively small group of global suppliers.

Semiconductor manufacturing relies on a highly interconnected international network. Chip companies require specialised equipment, electronic design automation tools, intellectual property, advanced materials, wafers, fabrication facilities, packaging and testing services sourced across different countries.

This dependence can create vulnerabilities when critical technologies or supplies are controlled by a limited number of countries or companies. Export restrictions, shipment delays, sharp price increases or restrictions on access to technology can affect project schedules and industries dependent on semiconductors.

Chandak said such risks cannot be eliminated entirely because semiconductor manufacturing is globally interconnected. Instead, India should anticipate disruptions, prepare for them and build the capacity to respond when they occur.

How Can India Make Its Chip Supply Chain Safer?

India should avoid excessive dependence on any single country, company or technology source for critical equipment, chemicals, materials, software and semiconductor intellectual property, Chandak said.

This would require diversifying suppliers, qualifying alternative sources in advance and developing contingency plans before disruptions occur.

Companies and policymakers should identify critical inputs, assess the availability of substitutes and maintain suitable inventory or strategic buffers for items that cannot be sourced quickly. Alternative suppliers should also be tested and approved before a crisis begins.

India should simultaneously deepen partnerships with multiple trusted countries and global companies. Such arrangements could provide access to technology and supplies while reducing dependence on a single external source.

Domestic manufacturing should be expanded where it is economically and technologically viable. Areas identified for greater domestic capability include semiconductor equipment, specialised materials, speciality chemicals, electronic design automation tools, chip intellectual property, packaging technologies and manufacturing processes.

Proposal for Conducting Cyber Crisis Drill, Tabletop Exercise (TTEx) & CCMP Readiness Exercise

How Could Cyberattacks Disrupt Chip Factories?

Cybersecurity is increasingly important because semiconductor factories are highly connected operations that depend on digital manufacturing equipment and operational technology.

A cyberattack could disrupt production, steal chip designs, compromise manufacturing equipment, damage product quality or expose sensitive information. Because semiconductor factories depend on several layers of connected equipment and third-party systems, an attack on a supplier or service provider could also affect the main facility.

The risks can extend through equipment and software supplied by manufacturers and service providers. An infected tool, compromised firmware, unsafe portable media or an outdated operating system could potentially create an entry point into a factory.

Industry cybersecurity guidance identifies several areas requiring attention, including the delivery and integration of equipment, older equipment that may become vulnerable over time, and the security of systems connected to factory networks.

What Cybersecurity Standards Could Protect the Industry?

The semiconductor sector already has industry standards addressing different parts of cybersecurity. SEMI E187 sets baseline cybersecurity requirements for fabrication equipment, including operating systems, network security, endpoint protection and monitoring.

SEMI E188 focuses on preventing malware from entering factories during equipment delivery, installation, maintenance or servicing. SEMI E191 sets requirements for reporting the cybersecurity status of computing devices connected to factory networks.

India could also establish measurable cybersecurity benchmarks using standards such as ISO/IEC 27001 and IEC 62443, along with the NIST Cybersecurity Framework and relevant CERT-In requirements.

Potential safeguards include maintaining inventories and risk classifications of critical IT and operational technology assets, continuous monitoring of manufacturing networks, regular vulnerability assessments, penetration testing, independent cybersecurity audits, incident reporting, backups and recovery systems.

Measures could also cover multi-factor authentication, privileged-access controls, encryption and data-loss prevention for critical systems and semiconductor intellectual property.

The approach would need to extend to third-party equipment, software, firmware, electronic design automation tools and service providers because security weaknesses outside a factory can still affect its operations.

How Is India Building Its Semiconductor Ecosystem?

India is seeking to expand beyond basic chip assembly, testing and packaging as it develops a broader semiconductor ecosystem covering design, fabrication, equipment, materials, research and talent.

The Union Cabinet approved the second phase of the semiconductor programme, known as Semicon 2.0, in July 2026 with an outlay of ₹12,750 crore. The programme is intended to support a wider range of activities across the semiconductor value chain.

The first phase resulted in approval of 12 semiconductor projects involving investments of more than ₹1.66 lakh crore. Five of those projects, including facilities associated with Micron, Kaynes and CG Semi, had already started commercial production, according to the information cited in the report.

The government has also said it received investment commitments of about ₹1 lakh crore under the second phase of the semiconductor programme.

Vaishnaw said India’s semiconductor capabilities should eventually cover a broad range of products used in everyday life. He referred to chips for automobiles, power systems, televisions, refrigerators and other appliances.

He also referred to Crystal Matrix’s planned LED display fabrication facility, saying the company had moved from a 90-micron process towards a more complex 40-micron level and was establishing a research and development facility in India.

Why Will Security Be Central to India’s Chip Ambitions?

India’s semiconductor strategy increasingly intersects with economic security, defence, telecommunications, automobiles, energy systems and artificial intelligence. As investment grows and Indian companies become more integrated into international supply chains, protecting manufacturing systems alone will not be sufficient.

Chip designs, intellectual property, design databases, supplier networks and connected factory equipment will also require protection. Continuous monitoring could help companies and the government detect export-control decisions, supplier concentration, technology restrictions, cyber incidents, logistics disruptions and signs of financial stress among key suppliers.

Chandak said preparedness should become a strategic capability rather than a one-time exercise. For India, the goal is not complete self-sufficiency but a semiconductor ecosystem capable of absorbing cyberattacks, export restrictions, supply failures and geopolitical disruption without bringing the country’s chip ambitions to a halt.

The420 Insight: “India’s Chip Ambition Needs a Cyber Shield Too”

Building semiconductor factories is only one part of India’s chip strategy. As the ecosystem expands, cybersecurity, supplier diversification and protection of intellectual property will become equally important.

A weakness in equipment, software or a third-party supplier could disrupt an interconnected manufacturing operation, making digital resilience a central part of India’s semiconductor push.

About the author — Ayesha Aayat writes on cybercrime, digital safety, and emerging online threats. Her work focuses on public awareness, legal clarity, and technology-driven risks.