India’s Semiconductor Packaging Market: The Next Strategic Battleground for Global Material Suppliers

1. Industrial Ambition vs. Material Gaps

In September 2025, India’s semiconductor industry took center stage in national headlines. However, turning this ambition into reality depends on the country’s ability to secure advanced packaging materials. From bonding wires and conductive silver adhesives to solder and flux, these materials determine whether chips can conduct stably, withstand high temperatures, and support advanced 2.5D/3D packaging technologies.

While India has developed capabilities for producing basic soldering consumables for electronics assembly, it still lacks capacity for ultra-fine, high-purity materials at the chip level. This gap results in heavy reliance on imports for advanced packaging and highlights a lack of domestic R&D investment at the upstream level.

This scenario presents a strategic opportunity for global materials companies. As India rolls out its semiconductor initiatives, international suppliers are accelerating their presence, targeting OSAT (Outsourced Semiconductor Assembly and Test) and adjacent sectors.

2. Strategic Moves by Global Material Suppliers

Tanaka Precious Metals: Building a Full-Cycle Ecosystem

Tanaka Precious Metals holds over 30% of the global bonding wire market and has made India a core component of its strategy. Managing Director Yutaka Ito emphasized the company’s closed-loop model, which involves recycling precious metals from electronic waste and turning them into bonding wires and sputtering targets for advanced manufacturing.

The company established its Indian subsidiary in Mumbai in 2020, initially focusing on the automotive sector. It is now shifting toward semiconductor packaging and plans to build a full-fledged recycling, refining, and supply network between 2026 and 2030 as OSAT facilities ramp up.

Additionally, Tanaka has introduced 29 types of specialized bonding wires for SiC power semiconductor applications and developed innovative silver paste technology that overcomes adhesion challenges on copper lead frames, enabling high-performance local packaging solutions

Indium Corporation: Bridging Manufacturing and Innovation

Indium Corporation has set up a high-end solder paste manufacturing facility in Chennai. CEO Ross Berntson explained that while the immediate motivation was logistics efficiency, the long-term vision is to make India a hub for material innovation in AI chip packaging, telecom equipment, and EV thermal management.

Indium’s competitive edge lies in co-development with customers. Its Durafuse LT low-temperature solder paste is a prime example — originally created for low-temperature assembly, it is now widely used in high-performance computing and telecom packaging applications

Looking ahead, the company plans to establish local R&D teams in collaboration with universities and industry partners to transform India from a manufacturing base into an innovation powerhouse.

3. Infrastructure Challenges and Strategic Opportunities

India still faces infrastructure gaps — particularly in power supply, ultra-pure water availability, and recycling smelter facilities. However, global suppliers are shifting from a sales-driven approach to local co-innovation, fostering collaboration in areas like precious metal recycling and custom alloy development.

As India’s first large-scale packaging plants approach mass production, suppliers of bonding wires, solder paste, and packaging adhesives are positioning themselves early. For Tanaka and Indium, India represents not just a new market but a strategic proving ground for the next generation of materials technology.