New Delhi: The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved Semicon 2.0, a long-term policy initiative aimed at accelerating the development of India’s semiconductor design and manufacturing ecosystem.
With a total budget outlay of ₹1,27,500 crore, Semicon 2.0 seeks to build on the momentum created under Semicon 1.0 while reinforcing the Government’s commitment to establishing India as a global semiconductor hub.
Recognising the need for sustained policy support for the semiconductor sector, Semicon 2.0 has been designed to strengthen the entire semiconductor value chain through a comprehensive ecosystem approach.
The initiative focuses on six strategic pillars covering semiconductor design, manufacturing, research, talent development and supply chain capabilities.
Design ecosystem to be strengthened
Under the first pillar, Semicon 2.0 aims to build upon the progress made in chip design. With 105 startups already developing semiconductor chips, the Government will focus on expanding the design ecosystem further.
Building blocks have been identified for developing both strategic and commercial semiconductor products, with the objective of creating intellectual property (IP), chip designs and complete systems. The initiative aims to position India as a leading semiconductor chip design IP nation.
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Semicon 2.0: Support for machines, materials and manufacturing
The second pillar of Semicon 2.0 focuses on encouraging companies engaged in manufacturing and research and development of semiconductor equipment, along with the production of essential materials, chemicals and gases required for semiconductor fabrication.
The Government said these incentives will help establish a sustainable semiconductor manufacturing ecosystem while strengthening India’s precision manufacturing capabilities.
More semiconductor fabs planned
The third pillar of Semicon 2.0 aims to attract additional semiconductor manufacturers to establish fabrication facilities in India. With the country’s first semiconductor fab scheduled for commissioning in 2028, the Government noted that global confidence in India’s semiconductor strategy has increased.
The initiative will support the establishment of silicon fabs, compound semiconductor fabs, discrete component fabs and display fabs.
Focus on advanced ATMP and OSAT facilities
The fourth pillar of Semicon 2.0 seeks to further strengthen India’s Assembly, Testing, Marking and Packaging (ATMP) and Outsourced Semiconductor Assembly and Test (OSAT) industry.
Following the success of existing ATMP units, the Government said India is increasingly being viewed as an alternative destination for semiconductor packaging facilities. The programme will actively encourage the adoption of advanced ATMP technologies.
Research and development to target advanced nodes
The fifth pillar under Semicon 2.0 focuses on expanding semiconductor research and development.
While India’s semiconductor journey has begun with 28nm to 110nm technology nodes, future efforts will concentrate on developing more advanced nodes and next-generation technologies through collaboration with leading research and development centres in India and abroad.
Talent development to continue
The sixth pillar of Semicon 2.0 emphasises talent development. According to the Government, 315 universities are currently training students in advanced chip design using the latest Electronic Design Automation (EDA) tools, with around 68,000 students already trained.
The programme will further strengthen semiconductor education, deepen industry-academia collaboration and enhance training in clean rooms, fab construction and other ecosystem requirements.
The Government said Semicon 2.0 is expected to support economic growth across multiple sectors, strengthen national security by improving supply chain resilience and establish India’s technological leadership in critical industries.
The ecosystem-based approach is intended to accelerate semiconductor design and manufacturing across the country.
Progress under ISM 1.0
The Government also highlighted the progress made under ISM 1.0.
- Manufacturing
A total of 12 semiconductor manufacturing units have been approved with cumulative investments exceeding ₹1.64 lakh crore.
These include one silicon fab, one silicon carbide fab, one integrated gallium nitride Micro LED display fab and nine packaging units catering to sectors such as consumer appliances, industrial electronics, automobiles, power electronics, telecommunications and aerospace.
Among the approved projects, Micron, Kaynes and CG Semi have already commenced commercial production, while one additional unit is expected to begin commercial operations in 2026.
- Design
Under ISM 1.0, 24 semiconductor design projects from startups and MSMEs have received financial support. Additionally, 105 startups and MSMEs have been granted access to industry-standard Electronic Design Automation (EDA) tools.
These companies are developing semiconductor chips and systems-on-chip (SoCs) for applications including satellite communications, drones, surveillance cameras, Internet of Things (IoT) devices, LED drivers, artificial intelligence systems, telecom equipment and smart meters.
The Government said these projects are at various stages of design and development and are expected to move towards deployment after successful prototyping.
