How Nuclear Energy Can Power India’s $103 Billion Semiconductor Market
India stands at a pivotal juncture in its quest to become a global technology powerhouse. With the Indian semiconductor market projected to grow from $52 billion in 2024 to $103.2 billion by 2030, driven by demand in electronics, automotive, and telecommunications, the nation is rapidly scaling its chip manufacturing capabilities. However, the energy-intensive nature of semiconductor fabrication plants (fabs) poses a significant challenge: ensuring a reliable, low-carbon, and cost-effective power supply. Nuclear energy—particularly through Small Modular Reactors (SMRs) and Bharat Small Reactors (BSRs)—offers a transformative solution to power India’s semiconductor industry, securing its tech supply chain and positioning the country as a resilient player in the global market. With India targeting 100 GW of nuclear power capacity by 2047, the foundation is being laid for a clean and dependable industrial future. Can India harness the full potential of nuclear energy to power its semiconductor ambitions and lead the next wave of global innovation?
The Energy Demand of Semiconductor Fabs:
Semiconductor fabrication is among the most energy-intensive industrial processes in the world today. According to the International Energy Agency (IEA), semiconductor fabs can consume as much electricity as an entire city. A single advanced facility may require up to 100 megawatts of power per hour, a level of consumption comparable to the electricity needs of approximately 80,000 U.S. homes. Reflecting the scale of this demand, a 2020 study by the Semiconductor Industry Association (SIA) estimated that the global semiconductor industry used around 100 terawatt-hours (TWh) of electricity—roughly 0.3% of the total global electricity consumption. These facilities operate continuously, 24 hours a day and seven days a week, as even momentary power interruptions can lead to significant production defects, resulting in losses that can run into millions of dollars within a single hour.
In this context, India’s growing ambition to emerge as a global semiconductor manufacturing hub underscores the critical importance of ensuring a stable and scalable energy ecosystem. The India Semiconductor Mission (ISM), launched in 2021 under the Ministry of Electronics and Information Technology (MeitY), is a strategic initiative with a total financial outlay of ~$9.1 billion aimed at building a robust semiconductor ecosystem within the country.
Several landmark projects have already been greenlit under this mission. Tata Electronics is establishing a state-of-the-art fabrication plant in Dholera, Gujarat, with a massive investment of $11 billion. This facility is expected to manufacture up to 50,000 semiconductor wafers per month, reinforcing India’s commitment to building indigenous high-tech capabilities. Meanwhile, Micron Technology’s Assembly, Testing, Marking, and Packaging (ATMP) facility in Sanand, Gujarat, is moving ahead with an investment of $2.75 billion. Another significant addition is the upcoming fab in Morigaon, Assam, which is projected to produce a staggering 48 million chips per day.
The energy demands of these facilities are further amplified by the increasing focus on manufacturing AI-specific semiconductors. These advanced chips, designed to accelerate machine learning and data-intensive tasks, require substantial computational power—both during their design phase and in deployment. To illustrate the intensity of this energy demand, training a single large-scale AI model, such as OpenAI’s GPT-3, can consume energy equivalent to that used in driving a conventional car for more than 700,000 kilometers.
Why Nuclear Power for Semiconductor Fabs?
India’s ambition to become a global leader in semiconductor manufacturing is strategically aligned with its energy goals—but this alignment hinges on the availability of a stable, reliable, and sustainable power supply. With an installed electricity generation capacity of 446 GW as of March 2024, including 220 GW from renewable sources, India appears well-positioned at first glance. However, a deeper assessment reveals that this capacity may not be sufficient or suitable to meet the unique and continuous power demands of semiconductor fabrication plants.
Renewable sources such as solar (102 GW) and wind (48 GW) form a substantial part of India’s energy mix, yet their intermittency makes them ill-suited for powering high-precision semiconductor facilities that require uninterrupted, around-the-clock electricity. At the same time, coal continues to contribute approximately 50% of India’s electricity, but its carbon intensity—ranging between 400 to 500 grams of CO₂ per kilowatt-hour—poses a significant challenge for a semiconductor industry aiming to meet international sustainability standards and access carbon-sensitive global markets.
In contrast, nuclear energy offers a strategic, future-ready solution. India currently operates 24 nuclear reactors with a combined capacity of 8,180 MW, and eight additional reactors under construction will add 6,800 MW. Furthermore, 10 more reactors with a projected capacity of 7,000 MW are in advanced planning stages. By 2031–32, India’s nuclear power capacity is expected to rise to 22,480 MW. This expansion aligns with India’s net-zero emissions target by 2070 and provides a foundation for industrial decarbonization.
For the semiconductor sector, nuclear power—especially in the form of Small Modular Reactors (SMRs) and Bharat Standard Reactors (BSRs)—presents several compelling advantages:
Uninterrupted Baseload Supply: Nuclear reactors offer continuous, high-quality power. This is vital for semiconductor fabs where even a momentary disruption can result in defective outputs and millions of dollars in losses.
Tailored Deployment with Compact Footprint: SMRs, with outputs ranging from 10 to 300 MW, and BSRs designed for India’s geographic and economic realities, can be rapidly deployed near emerging chip hubs such as Dholera and Sanand. Their modular construction enables shorter development cycles—typically between 3 to 5 years—matching the pace of India’s semiconductor expansion.
Ultra-Low Carbon Emissions: Emitting just 10 to 15 grams of CO₂ per kilowatt-hour, nuclear power is among the cleanest baseload energy sources available. For chipmakers, this ensures compliance with international ESG benchmarks, enhances brand value, and unlocks access to global carbon credit and green financing markets.
Cost-Competitive Manufacturing: Reliable nuclear power reduces electricity costs per chip, giving Indian fabs a competitive edge against global leaders like Taiwan and South Korea, where power tariffs and grid stability are crucial factors.
Energy Sovereignty and Risk Mitigation: Reducing dependence on imported fossil fuels and shielding domestic manufacturing from geopolitical price shocks in global energy markets, nuclear power offers long-term energy security for the semiconductor industry.
Strategic Autonomy in High-Tech Sectors: Leveraging domestically generated nuclear energy supports India’s vision of becoming self-reliant in chip production, particularly for critical sectors such as defense, aerospace, and nuclear technologies.
Case Study: Building a Nuclear-Powered Semiconductor Hub in Gujarat
Gujarat is rapidly emerging as a cornerstone of India’s semiconductor strategy, and it presents a compelling opportunity to pioneer the integration of nuclear energy into high-tech industrial ecosystems. With two flagship semiconductor projects underway—Tata Electronics’ $11 billion fabrication facility in Dholera and Micron Technology’s $2.75 billion Assembly, Testing, Marking, and Packaging (ATMP) unit in Sanand—the state is set to become a high-demand zone for reliable, uninterrupted, and clean power.
The energy requirements of these advanced facilities are immense. Tata’s fab alone is expected to produce 50,000 wafers per month by 2026, while Micron’s ATMP plant will handle millions of chip units annually. Together, they will require a continuous baseload supply of electricity that conventional sources, especially intermittent renewables or carbon-intensive coal, are ill-equipped to provide without compromising reliability or sustainability targets.
Fortunately, Gujarat is already home to significant nuclear infrastructure. The Kakrapar Atomic Power Station (KAPS), located within the state, houses two 220 MWe Pressurized Heavy Water Reactors (PHWRs)—KAPS 1 and 2—and two recently commissioned 700 MWe PHWRs—KAPS 3 and 4. This nuclear foundation not only affirms Gujarat’s technical readiness but also strengthens the case for expanding nuclear deployment to support new industrial demand.
One viable pathway is the establishment of a dedicated SMR cluster in the state. A single 300 MW SMR, with an estimated cost of $2 billion, could be operational as early as 2028. Strategically located near the Dholera and Sanand semiconductor clusters, such an SMR would offer a host of advantages. By adopting this model, Gujarat has the potential to become not only India’s semiconductor capital but also a global exemplar of how nuclear energy can power the high-tech manufacturing future.
In short, as India advances toward becoming a semiconductor manufacturing leader, integrating nuclear energy into its industrial ecosystem is not just a strategic option—it is an imperative. The reliability, scalability, and low-carbon profile of nuclear power, especially through SMRs and BSRs, aligns seamlessly with the energy demands of modern chip fabrication. Business leaders, investors, and policymakers must act now to integrate nuclear energy with semiconductor hubs, securing India’s technological sovereignty and driving economic prosperity. A key milestone in this journey will be the 6th edition of the India Nuclear Business Platform (INBP) 2025, scheduled for 14–15 October 2025 in Mumbai. As a premier industry event, INBP 2025 is set to bring together policymakers, global stakeholders, and business leaders under one roof to shape the future of India’s nuclear-powered industrial growth.
