New Delhi: The precision manufacturing ecosystem is emerging as a key enabler of India’s semiconductor industry as the country moves from establishing the foundation for semiconductor manufacturing to building the industry at scale, Union Minister for Electronics and Information Technology Ashwini Vaishnaw said at SEMICON India 2026.
Speaking at a fireside chat during SEMICON India 2026, Vaishnaw said the next phase under the India Semiconductor Mission (ISM) 2.0 will focus on developing a complete semiconductor ecosystem.
While ISM 1.0 focused on creating the foundational ecosystem, ISM 2.0 will take the industry forward across six key pillars, Design; Materials and Machines; More Fabs; More ATMP units; R&D; and Talent.
The Minister said ISM 1.0 was originally envisaged as a six-year programme but achieved its objectives in four years. He expressed confidence that ISM 2.0 would similarly progress ahead of schedule, supported by strong and growing investor interest.
Precision Manufacturing Ecosystem: Five Semiconductor Manufacturing Plants Begin Commercial Production
India’s semiconductor manufacturing ecosystem has reached a new stage, with five semiconductor manufacturing plants having commenced commercial production, according to Vaishnaw.
He said the plants are manufacturing chips for both domestic requirements and exports. According to the Minister, this demonstrates the ability of Indian semiconductor manufacturing to compete on cost and quality, which are essential for competing in the global market.
Vaishnaw said demand for semiconductor products is currently high, with several companies rapidly expanding their production capacity. He also noted that a fab scheduled to be commissioned in 2028 already has a large part of its capacity booked.
He highlighted the global nature of the semiconductor and electronics industries, where components and products move across international boundaries as part of global supply chains.
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Precision Manufacturing Ecosystem: Design Capability to Strengthen Semiconductor Ecosystem
Design is one of India’s major strengths in the semiconductor sector, with the country’s design capabilities, rooted in the IT industry and global capability centres, increasingly extending into semiconductors.
Vaishnaw estimated that at least 200 chip design companies could emerge under ISM 2.0, describing the development as “a game changer” for building homegrown semiconductor intellectual property.
Under ISM 1.0, the first phase of support for chip-design startups focused on addressing the high cost of Electronic Design Automation (EDA) tools.
More than 105 chip design startups gained access to state-of-the-art EDA tools through the initiative, while 20 startups received venture capital funding.
The Minister said progress among startups, including the development of chips for products, has encouraged the expansion of the programme and greater participation from larger companies and Indian-origin engineers working globally.
Precision Manufacturing Ecosystem and Applied R&D Gain Focus
The electronics manufacturing ecosystem has helped India develop precision manufacturing capabilities, particularly among MSMEs. These capabilities are supporting multiple sectors, including electronics, mobile manufacturing, aerospace, aviation, defence and semiconductors.
Vaishnaw said the next focus should be on applied R&D within manufacturing plants, with the objective of improving product quality and manufacturing processes.
The development of the precision manufacturing ecosystem will also require skilled personnel, he said. A multi-level training model is being developed to meet the growing requirement for skilled workers in precision manufacturing.
The focus on precision manufacturing is part of the broader effort under ISM 2.0 to strengthen capabilities across the semiconductor value chain, from design and manufacturing to R&D and talent.
Precision Manufacturing Ecosystem: India Trains Around 70,000 Design Engineers in Four Years
India has trained around 70,000 design engineers in four years, significantly advancing its semiconductor talent development efforts, Vaishnaw said.
The country had initially set a target of training 85,000 design engineers over 10 years. The Minister said this target is being pursued ahead of schedule, with around 70,000 design engineers already trained within four years.
Students from around 400 engineering colleges, including institutions in smaller cities, have received access to industry-grade EDA tools. Students are also getting opportunities to take their designs through tape-out and see their ideas developed into products.
Under ISM 2.0, semiconductor skilling will move beyond chip design towards system design. The objective is to create talent that is highly sought after by the industry.
Vaishnaw also highlighted the increasing demand for cleanroom technicians and maintenance personnel. He said the target of training one lakh technicians under ISM 2.0 may need to be increased in view of industry demand.
Precision Manufacturing Ecosystem: Electronics, AI and Semiconductor Ecosystem Growing Together
Vaishnaw said electronics, semiconductors and artificial intelligence applications are closely interconnected.
He highlighted the growing manufacturing ecosystem for AI servers and said major server manufacturers are showing interest in setting up manufacturing operations in India.
The ecosystem covering components, finished products, laptops, servers and accessories is gradually taking shape, according to the Minister. Once the ecosystem is established, growth can become more consistent.
The development of the precision manufacturing ecosystem is also expected to support this broader electronics and semiconductor manufacturing base by strengthening manufacturing capabilities across multiple sectors.
Precision Manufacturing Ecosystem: Towards Made-in-India and Designed-in-India Chips
India is progressing systematically towards becoming a product nation, Vaishnaw said.
He noted that some of the chips being developed in India are already being used in strategic sectors, while chips are also being exported.
The Minister said many more Made-in-India and designed-in-India chips are expected to emerge over the course of the semiconductor programme.
He also said ATMP units are already exporting to Japan, while chips are being incorporated into products exported to the USA and European Union countries such as Switzerland and Germany.
The expansion of chip design, semiconductor manufacturing, applied R&D, talent development and the precision manufacturing ecosystem forms part of the broader six-pillar approach under ISM 2.0 as India seeks to build a complete semiconductor ecosystem.
