Abstract
The ambitions seen by India’s semiconductor industry is real but ambition without having Intellectual Property just basically means manufacturing on someone else’s terms. This piece examines how there exists a disconnect between India’s booming electronics production and its having almost no indigenous patent portfolio in chip design. On one hand there is an increase in the building of fabrication plants and billions being committed under the India Semiconductor mission, but on the other, all of the country’s best semiconductor engineers continue to file patents for American Corporations. This blog draws comparisons between China’s 30-fold PCT patent growth and Taiwan and South Korea’s state-backed IP strategies and then argues that India must focus on the development of IP’s rather than focusing only on production output milestones.
India Builds the Chips, But Doesn’t Own the Ideas
India has seen a huge increase in the production of electronics, growing from Rs.1.9 lakh crore in 2014-15 to Rs.11.3 lakh crore in 2024-25. This has resulted in new fabrication plants being announced, billions of rupees being landed in investments, and the dream of semiconductors feels closer than ever. But there is something that isn’t mentioned in the press releases, that none of these ideas that are powering those chips are Indian. India is currently in the phase of learning to build and has not yet learned how to invent. This distinction does not matter at all in the semiconductor industry; it just determines who actually does win.
The $161 Billion Opportunity and the Talent Paradox
It is projected that the Indian semiconductor market by 2033 would reach about $161 billion. In order to build this ecosystem, there has been a commitment of Rs.76,000 crore by the India Semiconductor Mission. Additionally, fabrication plants have been announced by TATA, Micron and CG Power, which have contributed in building the momentum to go forward. It is quite surprising that India holds almost 20% of the world’s best semiconductor design engineers, but almost none of them are designing the chips for Indian-owned companies. Companies like Intel, Qualcomm and Texas Instruments have filed their patents at the headquarters in the US and run significant R&D operations outside India but majority of their brainpower is Indian. One can comfortably say that India is the world’s most talented semiconductor subcontractor.
Why Patents Are the Real Power Behind Fabrication Plants
It is important for a fabrication plant to have a patent portfolio because without having a patent portfolio, it will just be an expensive factory wherein you would have to build what others design, and on the terms that others set for you. Patent is indeed a real leverage that helps in enabling licensing revenue, cross-licensing negotiations, and litigation defence at the time when larger players come knocking. It is a signal to the investors that their innovation is protected. In order to understand this better, it is important to draw contrasts with Taiwan and South Korea. Taiwan Semiconductor Manufacturing Company(TSMC) has filed over 28,000 patent applications at the United States Trademark and Patent Office(USPTO), with a grant rate of 94.7%. In 2023, South Korea filed over 12,000 semiconductor patents. Both of these countries made deliberate, state-backed decisions in order to shift from being contract manufacturers to being IP holders, which took them decades. India has to do exactly the same to reach where both of these countries are standing today.
Why Indian Engineers Invent for Everyone Else But India
The causes are far more complex than the policy neglect. It takes between $2 million to $20 million for the creation of chip IP, which prices out most of the Indian startups as they face struggle to even get venture capital for deep-tech hardware. Even when MNCs like Intel and Qualcomm through their centres in India conduct R&D, their patents still get filed at the US headquarters, which implies that the entire brainpower is Indian but the ownership is of those companies that are outside India. Culturally, the problem here is structural. The CEO of Mindgrove says that Indian designers are engineers and not inventors. What he means to say is that Indian designers have been trained with execution of a specification and not inventing something of its own. Additionally, there has been a decline in the patent application since 2022, there has been a shortage of patent examiners, and all the government incentives are attached to the completion of production milestones rather than for IP creation. This is the reason that this gap now does not appear as an accidental oversight, rather it seems to be a design flaw.
The China Blueprint: How IP Creation Became a National Goal
It is worthwhile for all countries to study China’s approach. From the year 2010-2020, companies in China have increased the number of patents of PCT semiconductor by nearly 30-fold, from about 122 to 3,474, and this has resulted in them surpassing Japan. It is important to note that all of this happened because the Chinese Government made IP creation a measurable national goal and not a byproduct of production targets. India certainly needs a version that focuses on the creation of Intellectual Property. Additionally, it is also important that for semiconductor companies, there should be government incentives that depend on patent filing milestones rather than focusing on fulfilling production output milestones. Universities like IITs and NITs should have dedicated IP cells that focus only on chip designs. The government should also encourage the startups to file provisional patents as early in their development process as they can. WIPO’s bilateral cooperation frameworks should be used by the government so that they can help Indian firms protect their IP internationally before they scale. The window for India is not open permanently. Semiconductor patent applications in China have risen by 42% alone in 2023-24. If India does not work on improving its patent portfolio and keep on delaying it, then the difference between the two countries will keep on increasing and India would never be able to catch up with a country like China.
India’s Five-Year Window Before the Next Semiconductor Wave
India now has about five years to prove itself in the semiconductor industry before the next semiconductor wave takes place, which would be driven by AI chips, advanced packaging, and 2nm process nodes that will likely determine which countries would be dominating this industry for the next two decades. The fabrication plants are coming and we already have the engineers here in India, the only thing that is missing is the political support and its will to treat patent creation not just an afterthought to the production milestones but as a serious national infrastructure project. The blueprint to being one of the greats already exists with India, which was used by both China and Taiwan, but the central question that remains is whether Indian policymakers are actually willing to read it.
References
Nidhi Singal, Business Today, ‘ICEA Calls for Action for India to Lead Semiconductor Product Design and IP Creation’ (25 April 2024), [https://www.businesstoday.in/technology/story/icea-calls-for-action-for-india-to-lead-semiconductor-product-design-and-ip-creation-426974-2024-04-25]
Dezan Shira & Associates, India Briefing, ‘India’s Semiconductor Sector Outlook 2025: Growth, Investments, and Policy Incentives’ (6 August 2025), [https://www.china-briefing.com/china-outbound-news/india-semiconductor-sector-outlook-2025]
Press Information Bureau, Ministry of Electronics & IT, India Semiconductor Mission 2.0: A Major Push in Budget 2026 towards Semiconductor Self-Reliance (7 February 2026), [https://www.pib.gov.in/PressReleasePage.aspx?PRID=2224839]
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Aparna Sharma, The Secretariat, ‘India’s Semiconductor Dilemma: Powering Global Giants or Nurturing Homegrown Innovation?’ (5 September 2024), [https://thesecretariat.in/article/india-s-semiconductor-dilemma-powering-global-giants-or-nurturing-homegrown-innovation]