How Uttar Pradesh’s Semiconductor Ecosystem Looks To Fuel Strategic Defence Industrial Corridors

In the vast, sun-scorched plains of Uttar Pradesh—once synonymous with agrarian politics and industrial stagnation—a quiet revolution is gaining momentum. Long sidelined in India’s industrial growth story, the state is now poised to be at the forefront of the nation’s next high-tech breakthrough.

From the upcoming semiconductor fab in Noida to the growing Defence Industrial Corridor in Jhansi, Uttar Pradesh is emerging as a key hub in India’s next phase of industrial growth

The timing couldn’t be more critical. As global supply chains recalibrate away from China and semiconductor geopolitics intensify, India is racing to secure its place in the global chip value chain. At the heart of this national push is UP, where the emerging semiconductor ecosystem is not merely a symbol of technological ambition—it’s the engine that will power one of the state’s most strategic bets: the Defence Industrial Corridor.

The Semiconductor Gamble: More Than Just Chips

A nation’s economic vitality, national security, and global competitiveness increasingly depend on the strength of its semiconductor industry. From communication networks to defence systems, nearly every sector of the modern economy is built on the foundation of semiconductor technology.

What’s driving India’s semiconductor surge is a potent mix of national and state-level support. At the heart of this momentum lies the Government of India’s $10 billion incentive scheme under the India Semiconductor Mission (ISM), which provides attractive fiscal incentives across the value chain.

The mission covers 50 per cent of the project cost for setting up semiconductor fabs across all technology nodes, along with similar support for manufacturing display panels, including TFT, LCD, and AMOLED technologies.

One of the earliest beneficiaries of this policy push is the HCL-Foxconn OSAT joint venture near the Jewar Airport in the YEIDA region. As the first semiconductor plant in Uttar Pradesh under ISM, it marks a major milestone—not only for the state but for India’s broader effort to localise high-value chipmaking capabilities. It also strengthens the case for Noida and Greater Noida, both of which already house a robust ecosystem for electronics design and manufacturing.

On top of this, Uttar Pradesh has launched one of the country’s most attractive state policies for the sector. The UP-Semiconductor Policy 2024 offers up to 50 per cent capital subsidy, 75 per cent land discount, and full stamp duty waivers. While these benefits apply statewide, Noida and Greater Noida—with their existing infrastructure—are perfectly positioned to maximise the advantage.

Together, these central and state policies form a powerful double engine—making semiconductor investments not only viable but strategic in this region.

Fuelling The Defence Corridor

To understand why semiconductors are vital to Uttar Pradesh’s Defence Industrial Corridor, one must look beyond the traditional image of warfare. Gone are the days when defence was solely about tanks and artillery. Today, the battlefield is digital—defined by drones, satellites, smart munitions, radar systems, and AI-guided targeting. Semiconductors are the oxygen that fuels this ecosystem.

These tiny chips play a crucial role in various military applications, contributing to communication systems, encryption technologies, radar systems, missile guidance, and electronic warfare. Their small size, low power consumption, and high reliability make them ideal for military technologies that demand compactness, efficiency, and durability.

In communication systems, semiconductors are used in the development of advanced radios, satellite communications, and network infrastructure. They enable faster data transmission, improved signal quality, and enhanced connectivity.

Semiconductors also play a pivotal role in encryption and cybersecurity, safeguarding sensitive information and military networks from hostile cyber intrusions. In radar systems, they are used to create high-frequency amplifiers and sophisticated signal processors that enhance detection range, resolution, and tracking accuracy—vital for air defence and surveillance.

In electronic warfare, semiconductor-based systems allow militaries to jam or spoof enemy signals, degrade adversary radar, and maintain electromagnetic superiority. And in the realm of missile systems, chips embedded in guidance units process complex sensor data and compute precise trajectories, enabling pinpoint accuracy even in complex terrain.

By anchoring a semiconductor ecosystem in proximity to the Defence Corridor, Uttar Pradesh is closing a critical loop—ensuring that defence production is not just mechanical but also deeply digital. The co-location of chip facilities and defence manufacturers promises shorter development cycles, faster integration of cutting-edge tech, and a more resilient, self-reliant defence supply chain.

Status Report

Established in 2018 and spearheaded by the Uttar Pradesh Expressways Industrial Development Authority (UPEIDA), the Uttar Pradesh Defence Industrial Corridor (UPDIC) is quickly emerging as a critical pillar in India’s ambition to become a global defence manufacturing powerhouse.

Spanning six strategic nodes—Kanpur, Jhansi, Lucknow, Aligarh, Agra, and Chitrakoot—the corridor is driving robust investments and positioning Uttar Pradesh as a rising force in both national and global defence manufacturing.

These locations offer strategic advantages, including proximity to major expressways and robust airport connectivity, with proposed airstrips in Chitrakoot and Jhansi, as well as the upcoming international airport in Jewar near Aligarh.

With investments worth Rs 28,809 crore proposed across these nodes, the UP Defence Industrial Corridor is gaining significant momentum. Land has been allotted to nearly 47 companies, many of which have begun construction, while seven units are fully operational, marking the corridor’s swift emergence as a hub of cutting-edge manufacturing and strategic excellence. Meanwhile, the execution of lease deeds is underway for approximately 10 more companies.

Notably, Adani Defence Systems and Technologies Ltd. has started operations at its Rs 1,500 crore ammunition manufacturing facility in Kanpur—the corridor’s largest investment to date. This state-of-the-art facility is poised to set new national benchmarks in ammunition production.

In Aligarh, Amitec Electronics Ltd. has begun producing advanced electronic warfare systems and satellite technology, following an investment of Rs 330 crore. Also in Aligarh, Werywin Defence Pvt Ltd. has launched manufacturing of small arms with a Rs 65 crore investment. Lucknow is witnessing growth in advanced materials and missile systems. Aerolloy Technologies, with a Rs 320 crore investment, has started titanium casting operations.

DRDO’s BrahMos Aerospace has commenced production and assembly of the BrahMos NG missile system at its Rs 300 crore facility. Further boosting Kanpur’s industrial momentum, A R Polymers Pvt Ltd. has begun production of ballistic materials and safety gear with a Rs 48 crore investment. Additionally, Adhunik Materials and Sciences Pvt Ltd. has started manufacturing defence textiles with a Rs 38.58 crore investment.

While all of this underscores the UPDIC’s role in catalysing indigenous production of defence and aerospace systems—cutting import dependency and unlocking export potential—the real game-changer lies in the state’s emerging semiconductor ecosystem. These chipmaking facilities will supercharge the corridor, infusing it with the digital intelligence and advanced electronics essential for next-generation military capabilities.

The Bigger Picture: UP as India’s Strategic Growth Lever

The Uttar Pradesh Defence Industrial Corridor (UPDIC)—stretching across the central, western, and Bundelkhand regions—offers far more than just manufacturing muscle. In a rapidly shifting geopolitical landscape, especially amid recurring tensions along India’s borders with Pakistan and China, UPDIC occupies a strategic vantage point in the heart of the country.

While the defence corridor has already begun making its mark, its proximity to emerging semiconductor facilities will take its impact to the next level.

As warfare evolves into a high-tech domain, co-locating chip fabs and defence units unlocks the potential for developing next-generation weaponry—drones, radar systems, satellite-based surveillance, and AI-powered defence platforms. This synergy will not only drive the growth of UP’s aerospace and defence ecosystem but also usher in cutting-edge manufacturing technologies into the state.

This model is beginning to inspire emulation. Take Assam, for instance, which now hosts an OSAT (Outsourced Semiconductor Assembly and Test) facility by Tata Electronics. The state has formally requested the Central Government to set up a Defence Industrial Corridor in the Northeast to support India’s extensive military deployment along borders with China, Bangladesh, and Myanmar.

But Uttar Pradesh holds a unique edge. A thriving corridor that integrates both conventional arms manufacturing and chip-based systems right in the heart of northern India helps overcome a critical bottleneck—supply chain fragmentation. With production ecosystems closer to deployment zones and testing facilities, the state can significantly accelerate time-to-market for defence products.

Secondly, with its fast-evolving chip ecosystem, Uttar Pradesh is well-positioned to emerge as the leading contender for India’s first National Security Semiconductor Fabrication Plant—a facility dedicated exclusively to manufacturing chips deployed in military hardware, critical telecommunication networks, and electronics.

The ambitious India-U.S. joint project was announced following talks between Prime Minister Narendra Modi and U.S. President Joe Biden at the fourth Quad Leaders’ Summit in Delaware in late September.
The project will be enabled by support from the India Semiconductor Mission and will be part of a strategic technology partnership among Bharat Semi, 3rdiTech, and the U.S. Space Force. The fab, named Shakti, will produce infrared, gallium nitride, and silicon carbide semiconductors.

Notwithstanding the challenges ahead, at a time when microchips are at the core of almost every techno-nationalist competition, the birth of the Shakti fab should be celebrated as a triumph of India’s tech diplomacy and strategic foresight.

The Road Ahead

What makes UP’s semiconductor journey even more consequential is the multiplier effect it triggers. Chip facilities don’t operate in isolation—they attract an entire supply chain ecosystem: specialty chemicals, high-purity gases, photolithography tools, materials, packaging, and testing services. Simultaneously, downstream sectors—consumer electronics, telecommunications, automotive, and of course, defence—gain seamless access to indigenous, high-value components.

By fusing semiconductor manufacturing with its defence industrial corridors, UP is not just chasing economic growth—it is building a strategic capacity that aligns with India’s national interests.