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India must develop and manufacture its own semiconductor production machinery and high-precision components to reduce dependence on imported technology, Union Electronics and Information Technology Minister Ashwini Vaishnaw said on Saturday, highlighting a critical priority in the country’s semiconductor manufacturing strategy.
Speaking during a visit to the Ethereal Machines facility in Bengaluru, Vaishnaw said the development of sophisticated domestic manufacturing equipment was essential to building a self-reliant semiconductor ecosystem.
The remarks come as the government advances its ₹1.27 lakh crore Semicon India 2.0 programme, which aims to expand India’s capabilities beyond chip fabrication and packaging to include manufacturing machinery, specialised materials and advanced research.
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Bengaluru Manufacturer Highlights India’s Precision Engineering Capabilities
During his visit, Vaishnaw highlighted Ethereal Machines’ work in developing advanced manufacturing equipment and industrial components requiring extremely high levels of precision.
The Bengaluru-based deep-tech manufacturing company designs, develops and operates computer numerical control (CNC) machines. It also manufactures specialised components for industries including aerospace, defence, medical technology, electronics and semiconductors.
CNC machines use computer-controlled instructions to manufacture components with precise dimensions and consistent quality. Their applications range from producing industrial equipment to manufacturing specialised parts used in sophisticated technology systems.
Vaishnaw said the facility could manufacture components with tolerances ranging from two to 20 microns.
A micron is one-millionth of a metre. Manufacturing tolerances at this scale indicate how closely a component’s actual dimensions must match its intended design.
The minister noted that such specialised components had traditionally been manufactured in countries including Germany and Japan.
Developing comparable capabilities within India could reduce dependence on imported industrial equipment and create opportunities for domestic engineering companies.
However, the manufacturing capabilities demonstrated at Ethereal Machines should not be confused with the ability to produce every category of advanced semiconductor fabrication equipment.
Why Semiconductor Machinery Is Critical To India’s Chip Ambitions
India’s semiconductor strategy has increasingly focused on establishing fabrication plants and facilities for assembling, testing and packaging chips.
However, manufacturing semiconductors requires a much broader industrial ecosystem.
Chip factories depend on specialised equipment for depositing materials, transferring circuit patterns onto semiconductor wafers, removing unwanted material and inspecting microscopic defects.
Much of this equipment is supplied by a limited number of international companies, making access to advanced manufacturing technology an important economic and strategic consideration.
For example, lithography machines, which transfer intricate circuit patterns onto semiconductor wafers, are among the most sophisticated industrial systems used in chip production.
The Netherlands-based ASML is the world’s sole commercial supplier of extreme ultraviolet lithography machines used in manufacturing many of the most advanced chips.
Other important categories of semiconductor equipment are supplied by companies based in the United States, Japan and Europe.
For India, establishing domestic capabilities in precision engineering, equipment components and manufacturing machinery could help reduce some of these dependencies.
Such capabilities would also support maintenance, repairs and the development of local suppliers, potentially reducing the time and costs associated with sourcing specialised equipment from overseas.
Nevertheless, developing complete semiconductor manufacturing systems requires extensive research, technological expertise and years of industrial development.
Semicon India 2.0 Expands Focus Beyond Chip Factories
Vaishnaw’s remarks follow the launch of the Semicon India 2.0 application portal on November 6.
The Union Cabinet approved the second phase of the semiconductor programme with an allocation of ₹1,27,500 crore.
The programme covers six principal areas, including chip design, machinery and materials, new fabrication plants, advanced packaging, research and development, and workforce training.
Applications have already opened for semiconductor manufacturing equipment and materials, new fabrication facilities, and chip assembly and testing operations.
According to the Ministry of Electronics and Information Technology, the first phase of India’s semiconductor programme resulted in the approval of 12 projects across six states, representing cumulative investments exceeding ₹1.64 lakh crore.
Five of these projects had commenced commercial production by October 2026.
The government has also provided semiconductor design tools to more than 100 startups and hundreds of educational institutions, while approximately 70,000 students have received training under its Chips to Startup programme.
Under Semicon India 2.0, the government aims to attract at least three major semiconductor equipment manufacturers and five companies specialising in chemicals and gases.
These remain policy targets rather than confirmed investment commitments from specific companies.
Domestic Equipment Manufacturing Could Strengthen India’s Technology Security
The expansion of domestic semiconductor equipment manufacturing has implications beyond industrial growth.
Semiconductors are essential to telecommunications networks, financial infrastructure, defence equipment, transportation systems, medical devices and artificial intelligence applications.
Dependence on overseas suppliers can expose manufacturers to disruptions caused by geopolitical tensions, export restrictions and shortages of specialised components.
Building a stronger domestic supplier network could improve industrial resilience and give Indian manufacturers greater flexibility in obtaining critical equipment.
It could also create opportunities for smaller engineering companies specialising in precision machining, industrial automation, advanced materials and equipment maintenance.
However, domestic manufacturing does not automatically eliminate supply-chain risks. Semiconductor facilities must also protect their software, industrial control systems, intellectual property and sensitive manufacturing processes from cyberattacks and unauthorised access.
India’s ability to develop a competitive semiconductor equipment industry will depend on sustained investment in research, access to specialised skills and the capacity of domestic companies to meet international manufacturing standards.
Vaishnaw’s latest remarks underline the government’s intention to make equipment manufacturing an integral part of India’s semiconductor strategy, rather than relying primarily on imported machinery to operate domestic chip factories.
What This Means For You:
India’s semiconductor expansion could create opportunities for engineers, researchers and businesses specialising in precision manufacturing, industrial automation and advanced electronics. Companies entering semiconductor supply chains should prioritise international quality standards, intellectual property protection and cybersecurity safeguards.
