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A silicon gap

India's defence modernisation hinges on an ecosystem of military-grade semiconductors

14 min read
Updated On: Apr 10 2026 | 6:25 AM IST
Mohammad Asif Khan
Some materials and modules of the gallium nitride chips (Photo: AGNIT Semiconductors)

Some materials and modules of the gallium nitride chips (Photo: AGNIT Semiconductors)

It’s not oil and gas supplies alone that have been hit by the war in West Asia. The upheaval in the Strait of Hormuz, a narrow stretch of waterway between Iran and Oman, is also disrupting the global semiconductor supply chain, causing market shocks in major chip hubs such as South Korea and Taiwan.
 
This in turn has sparked a massive security headache.
 
Chips are essential to a country’s national security — a basic component of nearly all modern military technology, such as advanced weapons systems, artificial intelligence (AI), and critical infrastructure.
 
But volatility around the Strait of Hormuz has choked off supplies of helium, which is essential for making semiconductors. Some 30 per cent of global helium exports comes from Qatar, making it the second-largest producer after the United States (US). Nearly all of Qatar’s helium exports must pass through the Strait of Hormuz, which has been choked off because of the current tensions.
 
India’s dependence on imported semiconductors and electrical parts stands at a staggering 90 to 95 per cent, with major components imported from China, Taiwan, South Korea, Singapore and the US. This makes self-sufficiency in semiconductors all the more important to India’s defence modernisation and strategic sovereignty.

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In addition to imported semiconductor components, India also depends on imported raw material, specialised gases and chemicals.
 
“Semiconductors in defence need to be part of systemic thinking in defence acquisitions, not just treated as a critical subcomponent,” said Rahul Rawat, research assistant at the Observer Research Foundation.
 
“They should be factored into ‘womb-to-tomb’ calculations. This will help plan procurements, upgrades, and integration, addressing technological limitations in legacy systems.”
 

Persisting challenges

The absence of such planning has meant that India often resorts to expensive “bridge buys” or faces delays in upgrades. Without that continuity, operational systems risk becoming unfeasible, not because they are outdated, but because their components are no longer available.
 
“The architecture, contracting, and assured access mechanisms need to be balanced,” Rawat said. “This should come with open, flexible yet informed standardisation to adapt to changing requirements of platforms, time, cost and innovation.”
 
Today’s military systems are designed to last. A fighter aircraft, a tank, or a ground radar is designed to last for three decades, sometimes going through several upgrades during its service life.
 
This is where the semiconductor industry is different. The commercial semiconductor industry discontinues products after a mere five-to-seven years.
 
This is due to three major factors: One, there is pressure on companies to improve their chips in terms of speed and cost. This is because of consumer demands. Two, technology is advancing very quickly. New chip designs and manufacturing methods come up every few years.
 
Lastly, chip manufacturing is going down to ever-smaller nodes (the size of the smallest features of a transistor). The smaller the nodes, the better the chips. However, manufacturing chips requires highly advanced technology that only a handful of companies in the world can do.
 
This means military technology is going to lag behind chips — because it is designed to last longer in comparison with other technologies. With time, it is going to get worse because there is an increase in the use of electronic devices in weapons.
 
In the early 2010s, India’s scientists at Defence Research and Development Organisation (DRDO) dreamed of building powerful new radars. One of their most ambitious projects was the long-range solid state active phased array radar (LSTAR). Unlike older radars that moved heavy mechanical parts, this one would use advanced chips to steer beams of energy at lightning speed.
 
But there was a problem. These chips weren’t easily available. They were special high frequency, high power semiconductors made with gallium nitride (GaN) and gallium arsenide (GaAs). Only a few countries had the technology to make them, and they guarded it closely. India could design the radar, but without access to those chips, progress slowed.
 
Engineers had to improvise. Sometimes they used older generations of chips, sometimes they redesigned the radar to work with what was available. The system worked, but it wasn’t as powerful or efficient as it could have been.
 
India’s defence semiconductor story began in the 1990s, when GaAs-based technology was developed for radar and communication applications. This laid the foundation for a domestic industry in compound semiconductor devices.
 
Years passed, and India realised it needed not just the chips, but the technology to make them. Without that, every new radar project would depend on foreign suppliers. By the mid 2020s, partnerships began to bear fruit. Companies like Tata Electronics and FermionIC started designing India’s own radar chips.
 

The GaN moment

A turning point came during the 2016 French Rafale fighter aircraft deal. Although the agreement gave India access to the latest technology in fighter aircraft, the access to the underlying technology in the radar and other electronic equipment provided by companies like Thales was restricted. This was  due to the underlying semiconductor technology.
 
India had to look for GaN because GaAs is not very good at handling power and temperature. GaN is more efficient and lasts longer, which makes it necessary for modern radar systems.
 
In modern military technology, the use of semiconductors is indispensable. In radar systems, the range of detection is directly proportional to the quality of semiconductors used. In electronic warfare systems, the use of semiconductors is critical to the ability to jam.
 
This can be seen in the operational systems deployed today. The Dassault Rafale fighter jet derives much of its operational advantage from the RBE2-AA radar system, which is active electronically scanned array (AESA) — based and relies on the use of semiconductors to deliver enhanced transmit — receives modules to achieve greater detection range and anti-jam capability.
 
Older aircraft, such as the Russian Sukhoi Su-30MKI, are now being forced to upgrade to AESA systems.
 
India’s indigenous systems, like the DRDO airborne early warning and control system,  Netra and land-based radars like the Arudhra, also follow a semiconductor-heavy technology stack. In these cases, better performance of these chips directly translates to better detection ranges and capabilities to simultaneously track multiple targets.
 
DRDO initiated an indigenous GaN programme through laboratories such as the Solid State Physics Laboratory and eventually achieved a breakthrough in GaN monolithic microwave integrated circuits in 2023.
 
India produces only small amounts of gallium through its aluminum industry. For high purity gallium needed in semiconductors and defence electronics, India relies mainly on imports from China. This dependence is a strategic concern because China dominates the global supply chain.
 
“GaN technologies play a crucial role in the development of future strategic systems, including radar and electronic warfare applications,” the Solid State Physics Laboratory said in a statement to Blueprint. “It offers high-power density, efficiency, and wide bandwidth in a compact size.”
 
“GaN offers power density which is up to five times higher than gallium-arsenide,” the laboratory noted. “This translates into significantly longer detection ranges and better target resolution.”
 
In the case of AESA radars, the difference is critical. “AESA radars maximise the ability to track difficult-to-detect threats but require more advanced circuitry,” Rawat said. “GaN — based semiconductor technology enables transmit — receive modules that are very small, have high output power, have low noise, and operate at high frequencies.”
 
From the industry’s perspective, the change is already underway. "GaN is mainly used in the power amplification element,” said Hareesh Chandrasekar, CEO of AGNIT Semiconductors Pvt. Ltd, which designs and manufactures GaN chips for defence and telecom applications.
 
“It has much higher power density compared to earlier technologies. Your chip can either be smaller for the same power or deliver more power in the same area.”
 
“So to achieve the same output, you need fewer chips. That reduces system complexity and improves efficiency,” Chandrasekar said.
 
In high-power systems such as radars, where a significant portion of energy is lost as heat, these efficiency gains are particularly valuable. Despite its advantages, developing GaN technology has not been straightforward.
 
“GaN is a strategic and denied technology,” the Laboratory noted. “Neither the material nor the process details were available. Innovation and optimisation were required at every stage. The technology evolved over several experiments and sustained effort by dedicated teams.”
 
India has made progress. Indigenous GaN technology has reached performance levels comparable to global standards in certain parameters, and efforts are underway to move to higher frequencies.
 
However, the challenge is no longer just about developing the technology. It is about scaling it. “It’s not necessarily a technology problem,” Chandrasekar said. “The question is how these things scale to production.”
 
The gap lies in moving from isolated products to a pipeline. “You can make one product, two products, three products, and then what?” he said, noting the absence of a continuous production roadmap. Without visibility on future orders, companies have little incentive to invest in expanding manufacturing capacity or upgrading technology nodes.
 
This is particularly relevant in defence, where volumes are low but reliability requirements are high. Unlike commercial electronics, where scale is driven by consumer demand,
 
military-grade semiconductors depend almost entirely on government procurement. In the absence of long-term contracts, production tends to remain episodic, rather than on a steady, continuous scale.
 
What complicates things is that testing becomes another impediment and hinders scaling.
 
Defence-grade semiconductors must operate under extreme conditions like high temperatures, vibration, electromagnetic interference, and in some cases, radiation exposure. This requires long testing and certification cycles, often running into years.
 
As manufacturing semiconductors is capital-intensive, and scaling requires significant upfront investment in process development.
 
“You will only invest in the development roadmap if you have visibility,” Chandrasekar said. Semiconductor manufacturing requires multibillion-dollar investments.
 

The China factor

Any discussion on India’s semiconductor push in defence inevitably runs into China’s lead — not just in manufacturing scale, but in its control over critical materials and supply chains.
 
China produces about 80 per cent of the world’s gallium and 60 per cent of germanium. The remaining supply comes from Russia, Japan, South Korea, Canada, Belgium, and the US but their output is small compared with China’s.
 
India’s gallium demand for defence semiconductors is modest but strategic, and sourcing from non-Chinese producers is difficult because their production volumes are limited and often already tied up in domestic or allied supply chains.
 
“China is already weaponising its supply chains for rare earths,” Rawat
 
said. “For India, the immediate option lies in partnerships with countries like Taiwan and the US, but these are not long-term solutions.”
 
Partnerships with Taiwan and the US can bridge India’s immediate needs, but long-term security demands building India’s own upstream capacity and diversifying supply chains.
 
China has been expanding its domestic manufacturing at scale.
 
State-backed investment funds running into tens of billions of dollars continue to support fabrication, materials, and equipment development.
 
The third phase of China’s national semiconductor fund alone has mobilised over $40 billion to strengthen the supply chain, including manufacturing and chipmaking tools. China, now the second-largest chipmaker, is preparing to produce 7-nanometre chips, marking a step forward in its effort to reduce reliance on foreign technology, even under continued export restrictions from the US.
 
A paper by Ulupi Bohra at the Centre for Joint Warfare Studies, an autonomous think tank based in New Delhi, noted that semiconductor ecosystems are now closely tied to national security and how economies with advanced semiconductor ecosystems will have the military edge over countries that don’t have such ecosystems.
 
What sets China apart is its integration — its ecosystem is designed to reduce dependencies on external suppliers.
 
For India it is a good model to replicate or learn from. There are only a handful of countries that are into the production and control of semiconductors.
 
India’s response to these vulnerabilities is beginning to take shape, driven by a mix of policy intervention, state-backed investment, and private sector participation.
 
Since the launch of the India Semiconductor Mission (ISM) in 2021, the government has approved at least 10 semiconductor projects, with total investments of over ₹1.6 trillion. The next phase, ISM 2.0, expands that ambition by building a full-stack ecosystem that includes manufacturing, design materials, and equipment.
 
According to a Deloitte report, India’s semiconductor market is projected to grow from $45-$50 billion in FY25 to $120 billion by 2030 and $300 billion by 2035.
 
On the ground, this push is beginning to translate into physical infrastructure. Facilities led by the Tata Group, Micron Technology, CG Power, and Kaynes Semicon are already manufacturing chips.
 
Much of this early capacity, however, is concentrated in assembly, testing, marking and packaging (ATMP) and outsourced semiconductor assembly (OSAT). While these are critical steps, they represent only a part of the value chain.
 
India’s strength continues to lie in design: It accounts for a significant share of the global semiconductor design workforce, and design-linked incentives have supported a growing base of domestic startups and fabless companies.
 
But the gap between design and fabrication persists, particularly in advanced and defence-specific technologies such as GaN and silicon carbide.
 
What is not often discussed in the context of defence semiconductors is that the equipment does not use only one type of semiconductor. Though the equipment does require GaN for high-power applications like radars and electronic warfare, modern defence equipment requires memory, storage, and processing semiconductors.
 
These semiconductors process the signals, store the data, and make the decisions in equipment like  radars, missile guidance, and communication systems. The recent semiconductor push by India is part of the overall requirement.
 
In February, the government inaugurated the Micron Technology ATMP facility in Sanand, which is India’s first commercial-scale semiconductor unit. The plant has the potential to produce tens of millions of semiconductors per year, thus entering the global memory market. Memory chips are critical for radars, missile guidance, and battlefield networks.
 
The ₹22,500-crore facility is responsible for assembling and packaging memory chips for global markets, thereby positioning India within the semiconductor value chain, albeit at the backend stage.
 
Even as India builds capability in semiconductor design and materials, a critical gap remains because of the absence of a trusted foundry for defence-grade chips.
 
In military systems, where semiconductors underpin sensors, communication, and electronic warfare, origin matters as much as performance. If a chip is designed in India but fabricated abroad, it introduces risks across the supply chain, from tampering and counterfeiting to long-term availability.
 
“A trusted foundry model is a must for sovereign chain-of-custody,” said Rawat. “It ensures assured access over decades, along with institutional safeguards against tampering and counterfeit components.”
 
At present, India lacks a high-volume fabrication ecosystem capable of meeting such requirements. Even critical defence electronics continue to rely on external manufacturing networks.
 
This becomes more significant as semiconductors are increasingly treated as strategic assets. Recent policy signals, including the launch of ISM 2.0, indicate a shift towards building not just capacity but trusted supply chains.
 
Yet, the gap is not merely technological: It is institutional. A trusted foundry ecosystem requires continuity, assured demand, long-term contracts, and integration into defence procurement planning.
 
“Please give them contracts. Please give them orders,” said Chandrasekar. “It cannot be tender.”
 
Without assured, long term procurement contracts, private firms have little incentive to invest in fabrication or scale manufacturing.
 
In a capital-intensive sector, uncertainty in demand directly translates into underinvestment.
 
Countries such as the US have addressed this through long-term defence contracts and designated trusted supplier frameworks. India is yet to build that linkage at scale.
 
Until then, the absence of a trusted foundry will remain one of the most critical gaps, because in today’s battlefield, the difference between capability and vulnerability is determined not by platforms alone, but by the silicon inside them.
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Written By :

Mohammad Asif Khan

Mohammad Asif Khan is a Senior Correspondent at Business Standard, where he covers defence, security, and strategic affairs.
First Published: Apr 10 2026 | 6:25 AM IST

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