Hyderabad’s SAESI Facility: A New Frontier in India’s Semiconductor-Driven Defence Ecosystem

In a landmark step toward technological sovereignty, Defence Minister Rajnath Singh on November 28, 2025 inaugurated the Secure Advanced Electronics and Semiconductor Innovation (SAESI) facility in Hyderabad. Spread across a sprawling 1 million square feet in the Maheshwaram Electronic Manufacturing Cluster, this state-of-the-art hub is exclusively dedicated to designing and producing military-grade semiconductors, sensors, and microelectronic systems. Billed as India’s answer to global supply-chain vulnerabilities exposed during the 2020 Galwan clash and the ongoing Red Sea disruptions, SAESI marks the culmination of a Rs 8,500 crore public-private partnership that aims to reduce India’s 95%+ import dependency on defence electronics by 2035.

Facility Overview: Scale, Security, and Strategic Mandate

SAESI is not just another fab – it is India’s first fully air-gapped, defence-exclusive semiconductor ecosystem operating at Security Clearance Level-5 (highest in the country). Key features include:

• 300mm Wafer Fabrication Line capable of 3nm to 28nm nodes for GaN, SiC, and CMOS processes critical for radar, missiles, and avionics.
• Trusted Foundry Status certified by DRDO and MeitY, ensuring zero foreign backdoors – a prerequisite for AESA radars and secure comms.
• Design House Cluster housing 22 Indian fabless companies (including IdeaForge, Tonbo Imaging, and Signalchip) under one roof.
• ATMP (Assembly, Testing, Marking, Packaging) Zone with MIL-STD-883 qualification labs.
• Clean Room Class 1 spanning 120,000 sq ft – the largest in South Asia for defence applications.

The project is executed by a consortium led by Tata Electronics (60%), with Bharat Electronics Limited (BEL), Hindustan Aeronautics Limited (HAL), and Israel’s Tower Semiconductor as technology partner for initial GaN-on-SiC transfer. Full indigenous control is mandated by 2029.

Strategic Imperative: Ending the “Chip Choke” in Defence

India currently imports over $3.2 billion worth of defence semiconductors annually – almost entirely from Taiwan, South Korea, and the United States. The Russia-Ukraine war and China’s repeated threats to Taiwan have exposed the fragility of this dependence. A single export-control decision can ground entire squadrons or render missile guidance systems inoperable.

SAESI directly addresses this vulnerability. Priority systems already queued for indigenisation include:

• Uttam AESA radar chips for Tejas Mk2 and AMCA
• Seekers for Astra Mk2/3 and Rudram series
• GaN TR modules for QRSAM and Akashteer
• Secure processors for Netra AEW&C and naval combat management systems
• High-temperature electronics for hypersonic vehicles and BrahMos-NG

Officials estimate that by 2032, SAESI will substitute $1.8–2.1 billion in annual imports and generate $4–5 billion in defence exports through co-developed chips with friendly nations.

Public-Private Partnerships: The Tata-DRDO Backbone

The SAESI model is built on aggressive indigenisation timelines:

• Phase I (2025–2027): Tower Semiconductor transfers 65nm–28nm RF and power semiconductor processes.
• Phase II (2027–2029): Tata and BEL take over full process ownership; 5nm design capability achieved with C-DAC’s Vega processor family.
• Phase III (2030+): 3nm military-grade nodes using Indian EUV lithography tools under development at IISc Bengaluru.

A dedicated ₹2,400 crore Defence Semiconductor Mission Fund has been created under the Ministry of Defence to subsidise 50% of capex for any Indian company producing MIL-grade chips at SAESI. Over 40 MSMEs have already signed MoUs for design incubation.

Projected Impact: Cost, Capability, and Combat Readiness

Independent assessments project a 20–35% reduction in lifecycle costs for major platforms:

• Tejas Mk2 avionics suite: from ₹180 crore to ₹115 crore per unit
• Astra BVR missile: ₹9 crore to ₹6.2 crore
• Arjun Mk1A fire-control system: 28% lower maintenance cost

Beyond savings, SAESI enables leapfrog technologies previously denied due to export controls – wide-bandgap GaN for 1,000 km+ active radar ranges, radiation-hardened chips for satellite kill vehicles, and quantum-resistant encryption ASICs for Link-Next tactical data links.

Integration with Existing Defence Clusters

SAESI is designed as the “silicon heart” of Hyderabad’s emerging defence corridor:

• 50 km from DRDO’s Research Centre Imarat (missile guidance hub)
• 30 km from Tata-Lockheed C-295 final assembly line
• Co-located with Bharat Dynamics’ new seeker production unit

This geographic clustering will slash lead times from 18–24 months (current import route) to under 6 months, a game-changer for wartime surge capacity.

Global Significance and Export Ambitions

With the US CHIPS Act restricting military-grade foundry access and China embargoed, SAESI instantly becomes one of only five non-adversarial sources worldwide for trusted defence semiconductors (alongside TSMC-Taiwan, GlobalFoundries-USA, Samsung-Korea, and UMC-Singapore). Early export contracts are already under negotiation with Vietnam, Philippines, and Armenia for radar and missile electronics.

Looking Ahead: A Silicon Shield for Atmanirbhar Bharat

Speaking at the inauguration, Rajnath Singh declared: “Today we lay not just the foundation of a factory, but of India’s silicon shield. No nation can claim to be truly sovereign if its weapons blink because someone else controls the chips.”

With Phase-I production slated to begin in Q3 2026 and full operational capability by 2029, SAESI is more than infrastructure – it is strategic insurance. In an era where wars will increasingly be fought in electrons before steel, Hyderabad’s new facility ensures that when Indian missiles fly and radars scan, they do so on Indian silicon.