The concept of establishing an indigenous semiconductor fabrication and research facility was first proposed in 1976. By 1984, the Semiconductor Laboratory in Mohali, Punjab, had begun chip production at its 51-acre campus, making India one of the earliest countries to enter semiconductor fabrication, even before Taiwan Semiconductor Manufacturing Company was founded, which today holds approximately 72 percent of the global semiconductor foundry market and generates nearly 50 billion dollars in annual revenue.
In 1989, a mysterious fire severely damaged the Mohali facility. The cause of the incident has never been conclusively determined, with uncertainty remaining over whether it was accidental or the result of sabotage. The destruction significantly disrupted India’s progress in semiconductor manufacturing, halting momentum in a sector that would later become central to the global digital economy. Operations at the facility resumed only in 1997 after extensive reconstruction efforts.
In 2010, Israel-based Tower Semiconductor collaborated with the Semiconductor Laboratory to develop 180-nanometre chip technology. However, as the global semiconductor industry rapidly advanced to sub-10-nanometre fabrication, the Mohali facility remained constrained to legacy technologies, limiting its competitiveness in commercial markets.
Over the decades, the facility’s output beyond strategic defence and space applications remained limited. Officials and experts have attributed this stagnation to insufficient long-term investment, lack of sustained policy direction, bureaucratic inefficiencies, and operational challenges. Reports also indicate weak marketing efforts and limited customer engagement, contributing to capacity utilisation levels as low as 10 percent.
The Semiconductor Laboratory has undergone multiple administrative realignments over time, initially operating under the Department of Electronics in 1984, later shifting to the Department of Space in 2006, and eventually coming under the Ministry of Electronics and Information Technology in February 2022.
Modern semiconductor production demands substantial capital investment and close collaboration with global technology partners. Recognising this, the government has announced an investment of Rs 4,500 crore to modernise and expand the Mohali facility. Tata Electronics and Tower Semiconductor have reportedly been shortlisted to support the upgrade and redevelopment process.
According to officials from the Ministry of Electronics and Information Technology, the immediate objective is to upgrade production capabilities to industry-standard legacy nodes of 65 nanometres and 40 nanometres, with longer-term plans aimed at advancing toward more sophisticated semiconductor technologies.
The trajectory of the Mohali semiconductor facility reflects a pivotal industrial opportunity that began ahead of its time but lost global momentum due to structural setbacks, leaving India now engaged in a renewed effort to reclaim its position in the strategic semiconductor ecosystem.
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