India's Semiconductor Industry Turns Focus to Localizing Materials and Gases

India's semiconductor industry is taking its next step in localizing materials and gases to support its growing manufacturing base. This push was highlighted at Semicon 2026, where executives from Kaynes Semicon, Merck, INOX Air Products, and L&T Semiconductor Technologies discussed the opportunities and challenges ahead.

Kaynes Semicon's General Manager Nannie Torries stated that India has proven it can produce semiconductors locally. The company's Sanand plant began production on March 31, 2026, marking a significant milestone for the country's semiconductor industry. Kaynes is now working to qualify multiple suppliers for critical inputs rather than relying on a single source.

According to Torries, localizing materials such as lead frames, moulding compounds, and bonding wire can account for 5% to 15%, 4% to 8%, and 2% to 8% of manufacturing costs respectively. This is seen as a huge opportunity for India to capture.

However, Torries noted that qualification can take nine to 18 months due to the established suppliers' reputation and long-standing relationships. Merck Electronics CEO Benjamin Hein emphasized that fab viability will require parallel local investment in ultra-pure semiconductor chemicals and gases, safe materials handling, and certified domestic suppliers.