India’s Semiconductor Boom Brings a New Cybersecurity Challenge

India’s push to establish a stronger semiconductor industry is attracting significant investment, but the country’s growing role in the global chip supply chain is also creating new cybersecurity, geopolitical and supply-chain challenges.

Industry leaders and Union Electronics and Information Technology Minister Ashwini Vaishnaw have highlighted the need for stronger cyber defenses and greater supply-chain resilience as India expands its semiconductor manufacturing and design capabilities.

The potential risks extend beyond fabrication plants. Semiconductor companies rely on specialized equipment, software, intellectual property, suppliers, digital manufacturing systems and international logistics networks, creating multiple points that could be targeted or disrupted.

India’s Semiconductor Growth Creates New Security Challenges

As India develops capabilities across semiconductor design and manufacturing, its exposure to global geopolitical and cybersecurity risks is also increasing.

Vaishnaw has warned that geopolitical developments must be closely monitored as India becomes more involved in designing and manufacturing advanced electronic components. He has also discussed cybersecurity concerns with semiconductor companies and deep-tech startups.

The minister has urged businesses to prepare for cyberattacks and other disruptions that could affect manufacturing facilities, research activities, supply chains and critical infrastructure.

The concern is particularly significant because semiconductor production is strategically important to industries ranging from automobiles and telecommunications to energy, consumer electronics and artificial intelligence.

Global Semiconductor Supply Chains Remain Vulnerable

Semiconductor manufacturing depends on a complex international network. Companies require advanced production equipment, electronic design automation software, intellectual property, wafers, chemicals, materials, packaging services and testing capabilities from suppliers across multiple countries.

Ashok Chandak, president of the India Electronics and Semiconductor Association and SEMI India, has pointed to geopolitical tensions, cyberattacks and supply disruptions as major challenges for the industry.

Heavy dependence on a limited number of suppliers or countries can increase the impact of export restrictions, transportation problems, technology controls and sudden price increases.

Because semiconductor production cannot easily be separated from global supply networks, completely eliminating these risks is difficult. Instead, companies need contingency plans that allow them to continue operating when critical supplies or technologies become unavailable.

Supplier Diversification Could Strengthen India’s Resilience

One approach is to reduce excessive dependence on a single supplier, country or technology provider for critical semiconductor inputs.

This could involve identifying alternative suppliers, testing replacement equipment and materials in advance, and maintaining appropriate inventories of components that are difficult to obtain quickly.

India could also expand technology partnerships with multiple trusted international partners rather than relying heavily on one external source.

At the same time, domestic capabilities could be developed in areas where local production is economically and technologically practical. These areas include semiconductor equipment, specialized materials, chemicals, electronic design automation, chip intellectual property, packaging technologies and manufacturing processes.

Such diversification would not eliminate international dependencies, but it could give companies more options during geopolitical or commercial disruptions.

Cyberattacks Could Disrupt Semiconductor Manufacturing

Semiconductor facilities increasingly depend on connected digital manufacturing equipment and operational technology, making cybersecurity a critical component of factory operations.

A successful cyberattack could potentially interrupt production, compromise manufacturing systems, steal proprietary chip designs or expose sensitive corporate information.

The threat can also originate outside the factory. Equipment manufacturers, maintenance providers, software suppliers and other third parties can introduce security risks that eventually affect connected manufacturing environments.

Potential entry points include compromised equipment, malicious firmware, infected removable media and outdated operating systems.

For this reason, cybersecurity needs to be considered throughout the lifecycle of factory equipment—from procurement and installation to maintenance, upgrades and eventual replacement.

Semiconductor Industry Standards Offer a Security Framework

The semiconductor industry already has several cybersecurity standards that can help manufacturers improve their defenses.

SEMI E187 establishes baseline cybersecurity requirements for semiconductor manufacturing equipment, covering areas such as operating systems, network security, endpoint protection and monitoring.

SEMI E188 addresses the risk of malware entering manufacturing facilities during equipment delivery, installation, maintenance and servicing. SEMI E191 focuses on communicating the cybersecurity status of computing devices connected to factory networks.

Indian semiconductor companies could also use established frameworks and standards such as ISO/IEC 27001, IEC 62443 and the NIST Cybersecurity Framework, alongside applicable CERT-In requirements.

Security measures could include:

• Comprehensive inventories of IT and operational technology assets
• Risk classification of critical systems
• Continuous network monitoring
• Regular vulnerability assessments
• Penetration testing and independent security audits
• Incident reporting and response procedures
• Reliable backup and disaster-recovery systems
• Multi-factor authentication
• Privileged-access management
• Encryption for sensitive information
• Data-loss prevention controls

These protections should also extend to third-party software, equipment, firmware, design tools and service providers.

India Expands Its Semiconductor Ecosystem

India’s semiconductor strategy is moving beyond assembly, testing and packaging toward a broader ecosystem covering chip design, fabrication, equipment, materials, research and workforce development.

The Union Cabinet approved the second phase of the semiconductor programme, known as Semicon 2.0, in July 2026 with an allocation of ₹12,750 crore.

The first phase led to approval for 12 semiconductor projects involving investments of more than ₹1.66 lakh crore. According to information cited in the report, five projects associated with companies including Micron, Kaynes and CG Semi had entered commercial production.

The government has also reported investment commitments of approximately ₹1 lakh crore under the programme’s second phase.

Vaishnaw has said India aims to develop semiconductor capabilities supporting a wide range of products, including automotive systems, power electronics, televisions, refrigerators and other consumer and industrial applications.

The government’s broader strategy also includes developing research and manufacturing capabilities in areas such as display technologies.

Intellectual Property Will Be a Critical Security Target

As India’s semiconductor ecosystem grows, protecting physical factories alone will not be enough.

Chip designs, engineering databases, intellectual property, manufacturing recipes, supplier systems and connected production equipment could all become targets for cybercriminals or other threat actors.

Companies will therefore need visibility across their entire digital and supply-chain environments.

Continuous monitoring could help organizations identify potential problems involving supplier concentration, export controls, technology restrictions, cyber incidents, logistics interruptions and financial difficulties among critical suppliers.

Resilience May Matter More Than Complete Self-Sufficiency

India’s semiconductor ambitions are closely connected with economic security and several strategic industries, including telecommunications, automobiles, energy, defense and artificial intelligence.

As the country becomes more integrated into global semiconductor networks, resilience will become increasingly important.

The objective does not necessarily have to be complete self-sufficiency. Instead, India can focus on developing an ecosystem capable of continuing operations despite cyberattacks, supply shortages, export restrictions, logistics problems or geopolitical disruptions.

For semiconductor manufacturers, cybersecurity and supply-chain planning will therefore need to become continuous processes rather than one-time compliance exercises.

The Road Ahead for India’s Chip Industry

India’s semiconductor expansion presents significant opportunities, but its success will depend not only on investment and manufacturing capacity.

Protecting intellectual property, securing connected equipment, diversifying suppliers and preparing for cyber incidents will be equally important.

As factories and technology networks become more interconnected, a weakness in a supplier, software platform or piece of manufacturing equipment could potentially affect a much larger part of the ecosystem.

Building cybersecurity and operational resilience into India’s semiconductor strategy from the beginning could therefore become an important part of maintaining the country’s long-term chip ambitions.