Building a fab versus owning the chain: India's capacity, Taiwan's depth, Japan's demand data

India: the input side is growing fast

SEMICON India 2026, which opened on 17 September 2026 at Yashobhoomi in New Delhi, made India's semiconductor programme visible at plant scale for the first time: more than 600 exhibiting companies, some 300 international firms and 15,000 square metres of exhibition space. The real number on the manufacturing side is in Gujarat. Total investment in the country's first commercial wafer fab, built at Dholera by Tata Electronics with Taiwan's PSMC, exceeds 910 billion rupees, with planned capacity of 50,000 wafers a month. Applied Materials, for its part, announced a 5 billion dollar investment and a 140-acre research park as part of a ten-year plan.

The packaging and test end of the chain did not wait for the fair to start working. CG Semi at Sanand has entered commercial production with an initial capacity of 200 million units a year against a target of 5 billion units. Suchi Semicon at Palsana has completed its Class 10K and 100K clean rooms with 868 crore rupees of approved support; CDIL Semiconductor's assembly, test and packaging plant at Mohali, producing MOSFETs, IGBTs and Schottky diodes, has opened. Against this, neither source gives an official date for the first wafer to come off the Dholera line; the advanced node timetable could not be independently verified.

The bottleneck is not in the fab but at the ends of the chain

The Observer Research Foundation's assessment of 8 September 2026 is the text that draws this distinction most clearly on the Indian side. It reads the 1.275 trillion rupee budget of the Semicon 2.0 programme, approved by the cabinet on 15 July 2026, as a continuation of the earlier 76,000 crore rupee programme; cumulative commitments across the twelve approved projects have reached 1.64 trillion rupees. Electronics manufacturing turnover rose from 1.9 trillion rupees in 2014-15 to 12 trillion rupees in 2024-25, nine ATMP/OSAT projects have been approved, 24 design-focused projects supported, 105 companies given access to advanced EDA tools, and 38,000 GPUs connected to the shared computing infrastructure as of March 2026.

The human capital picture is stronger still: 100,000 engineers have been trained, 68,000 of them going directly into chip design, and 20% of the global chip design workforce is already in India. The author's objection follows from this: outside dependence persists as long as the gap between design strength and manufacturing, advanced materials and equipment supply stays open. The text does not regard full autarky as realistic and proposes selective technological autonomy in the links where vulnerability is disproportionate. Its own blind spot is worth noting: it does not say how many of the twelve projects have actually entered production, and gives no yield rates or unit cost comparison.

Taiwan: not expansion but thickening the cluster

Taiwan's move is not to open a new geography but to fortify the one it has. On 17 September 2026 the National Development Council approved a 104-hectare expansion of the Longtan Science Park in Taoyuan; the park already covers 106.94 hectares and employs about 7,000 people. Total cost is 95.63 billion NT dollars (2.99 billion dollars) and financing will come from the Science Park Administration's operating fund. On completion, companies on the site are expected to produce 550 billion NT dollars of output a year and to create some 4,500 well-paid jobs.

The timetable, though, is drawn out: development permits and the environmental impact assessment are to be completed by the end of 2028 and infrastructure construction will begin in 2030; the plan now goes to the Executive Yuan for final approval. In May 2026 local media reported that TSMC was seeking government approval for an advanced node fab on the site, but the company's investment decision could not be independently verified. The real sign of deepening lies elsewhere: in the same week the Taoyuan administration announced that it was planning a separate 40-hectare area, in a first phase, in the Aerotropolis zone for makers of advanced ABF carrier substrates. Taiwan is trying to keep not only wafer capacity but also the advanced packaging link on the island.

Japan's data: demand still pulls, momentum slows

According to Ministry of Finance data released on 16 September 2026, Japan's August exports rose 19.3% year on year; that is above the market expectation of 18.2% but below July's jump of 23.2%. The increase was supported by shipments of chips and chipmaking equipment, which stayed strong on artificial intelligence demand; exports to the United States rose 24.9% and exports to China 20.6%. In other words, the demand assumption underlying India's and Taiwan's capacity decisions still held in August.

The same data show a second thing: the cost side of the chain is exposed to price shocks. Imports rose 28% in August, the sharpest increase since November 2022; on crude oil, volume rose only 3.6% while value rose 58.7%. The trade deficit widened to 1.106 trillion yen (7.12 billion dollars), a fourth consecutive month; the July deficit had been revised to 638.3 billion yen (4.1 billion dollars). The outcome of the Bank of Japan meeting that concluded on 18 September could not be independently verified as of the hour this report was written.

A reading for Türkiye and importers

Taken together, the three items give an importing country no grounds for optimism. Construction at Longtan begins in 2030 and Dholera has no first-wafer date; none of the announced capacity changes the supply picture before the end of this decade. Actual progress in India is concentrated in the packaging and test link: nine ATMP/OSAT projects and CG Semi's start at 200 million units a year. For Türkiye that means the prospect of a second address outside East Asia in the supply of electronics and automotive chips; it does not mean an alternative in the supply of advanced node processors.

The second channel is cost. In Japan's case, value rising 58.7% while volume rose 3.6% shows that the bill is being inflated by price rather than quantity; the same mechanism works on the current account of Türkiye, a net energy importer. While capacity investment leaves its effect on prices to the 2030s, the energy and intermediate goods bill is acting today through the exchange rate and commodity prices.

What to watch

Five indicators are decisive: the first wafer announcement from Tata Electronics or the India Semiconductor Mission; whether CG Semi's output of 200 million units a year is revised; the Executive Yuan's Longtan approval and the end-2028 permit target; the chip export items and the value of crude oil imports in Japan's September data in mid-October; and the share of the 1.64 trillion rupee commitment that turns into cash.