Last Updated on July 15, 2026 11:08 pm by BIZNAMA NEWS

By Our Business Correspondent

New Delhi, July 15: In a significant step towards strengthening India’s ambitions of becoming a global semiconductor powerhouse, the Union Cabinet on Wednesday approved Semicon 2.0, a comprehensive programme with a budgetary outlay of ₹1,27,500 crore aimed at expanding the country’s semiconductor design, manufacturing, research and talent ecosystem.

The decision, taken at a meeting of the Union Cabinet chaired by Prime Minister Narendra Modi, builds on the momentum generated under the India Semiconductor Mission (ISM) 1.0 and seeks to establish a complete semiconductor value chain in the country—from chip design and fabrication to advanced packaging, research and skilled workforce development.

The government said the new initiative reflects its long-term commitment to positioning India as a trusted global destination for semiconductor manufacturing and innovation, while enhancing supply chain resilience and reducing dependence on imports in strategically important technologies.

Six-Pillar Strategy

Semicon 2.0 has been designed around six key pillars to create an integrated semiconductor ecosystem.

The first pillar focuses on chip design, with the government aiming to transform India into a global hub for semiconductor intellectual property (IP). Building on the progress made under the first phase, where 105 start-ups and MSMEs have already begun designing chips, the new programme will support the development of advanced chip designs, system architectures and indigenous semiconductor IP for both commercial and strategic applications.

The second pillar targets the manufacturing of semiconductor equipment and materials. Companies involved in producing fabrication machinery, specialty chemicals, industrial gases and other critical materials required for chip manufacturing will receive government incentives. The move is expected to encourage precision manufacturing and reduce reliance on imported inputs.

The third pillar seeks to expand India’s fabrication capacity by attracting more investments in semiconductor fabrication plants. Besides silicon fabs, the government plans to encourage investments in compound semiconductor fabs, discrete component fabs and display fabrication units. India’s first silicon semiconductor fabrication plant is expected to become operational in 2028, and officials believe the new policy will help attract additional global manufacturers.

The fourth pillar aims to strengthen India’s Assembly, Testing, Marking and Packaging (ATMP) and Outsourced Semiconductor Assembly and Test (OSAT) capabilities. Following strong investor interest under the first phase, the government intends to bring advanced packaging technologies to India and position the country as a major global destination for semiconductor packaging.

Research and development form the fifth pillar of the programme. While India’s semiconductor journey has initially focused on mature technology nodes ranging from 28 nanometres to 110 nanometres, the government now plans to promote the development of more advanced semiconductor technologies through collaborations with leading domestic and international research institutions.

The sixth pillar focuses on skill development. The government will expand semiconductor education programmes across universities and technical institutions while increasing industry participation in specialised training related to clean rooms, fabrication plants and semiconductor manufacturing processes.

Boost to Manufacturing and National Security

According to the government, Semicon 2.0 is expected to support economic growth across multiple sectors, including consumer electronics, telecommunications, automobiles, artificial intelligence, aerospace, defence and industrial automation.

Officials said the programme will also strengthen India’s technological sovereignty by creating resilient domestic supply chains for critical semiconductor components, an area that has gained strategic importance following global chip shortages in recent years.

By developing capabilities across the entire semiconductor value chain, the initiative aims to reduce import dependence while enhancing India’s competitiveness in the global electronics industry.

Strong Progress Under Semicon 1.0

The government highlighted the achievements of the first phase of the India Semiconductor Mission, which laid the foundation for the country’s semiconductor ambitions.

Under Semicon 1.0, 12 manufacturing projects with a combined investment exceeding ₹1.64 lakh crore have already been approved. These include one silicon fabrication plant, one silicon carbide fabrication unit, an integrated gallium nitride (GaN) Micro LED display fabrication facility and nine semiconductor packaging units catering to sectors such as consumer electronics, automotive, telecommunications, power electronics and aerospace.

Of these approved projects, Micron, Kaynes Technology and CG Semi have already commenced commercial production, while another manufacturing facility is expected to begin operations during 2026.

On the design front, the government has approved 24 semiconductor design projects proposed by start-ups and MSMEs for financial assistance. Additionally, 105 start-ups and MSMEs have been provided access to industry-standard Electronic Design Automation (EDA) software tools to develop chips and System-on-Chips (SoCs) for applications including satellite communications, drones, surveillance systems, Internet of Things (IoT) devices, LED drivers, artificial intelligence platforms, telecom equipment and smart meters.

Many of these projects are currently in advanced stages of design and prototyping and are expected to move towards commercial deployment in the coming years.

Long-Term Vision

Industry observers say Semicon 2.0 marks the government’s shift from providing isolated manufacturing incentives to building a comprehensive semiconductor ecosystem covering design, fabrication, packaging, research, materials and skilled manpower.

With geopolitical shifts prompting global technology companies to diversify semiconductor supply chains beyond traditional manufacturing hubs, India is seeking to leverage its large engineering talent pool, expanding electronics manufacturing base and supportive policy framework to attract long-term investments in one of the world’s most strategically important industries.

The approval of Semicon 2.0 is expected to provide fresh impetus to India’s efforts to emerge as a major player in the global semiconductor landscape while supporting the country’s broader vision of becoming a leading technology and electronics manufacturing hub.

Cabinet Clears ₹1.27 Lakh-Crore Semicon 2.0 Mission to Accelerate India’s Semiconductor Ecosystem

By Our Business Correspondent

New Delhi, July 15: In a significant step towards strengthening India’s ambitions of becoming a global semiconductor powerhouse, the Union Cabinet on Wednesday approved Semicon 2.0, a comprehensive programme with a budgetary outlay of ₹1,27,500 crore aimed at expanding the country’s semiconductor design, manufacturing, research and talent ecosystem.

The decision, taken at a meeting of the Union Cabinet chaired by Prime Minister Narendra Modi, builds on the momentum generated under the India Semiconductor Mission (ISM) 1.0 and seeks to establish a complete semiconductor value chain in the country—from chip design and fabrication to advanced packaging, research and skilled workforce development.

The government said the new initiative reflects its long-term commitment to positioning India as a trusted global destination for semiconductor manufacturing and innovation, while enhancing supply chain resilience and reducing dependence on imports in strategically important technologies.

Six-Pillar Strategy

Semicon 2.0 has been designed around six key pillars to create an integrated semiconductor ecosystem.

The first pillar focuses on chip design, with the government aiming to transform India into a global hub for semiconductor intellectual property (IP). Building on the progress made under the first phase, where 105 start-ups and MSMEs have already begun designing chips, the new programme will support the development of advanced chip designs, system architectures and indigenous semiconductor IP for both commercial and strategic applications.

The second pillar targets the manufacturing of semiconductor equipment and materials. Companies involved in producing fabrication machinery, specialty chemicals, industrial gases and other critical materials required for chip manufacturing will receive government incentives. The move is expected to encourage precision manufacturing and reduce reliance on imported inputs.

The third pillar seeks to expand India’s fabrication capacity by attracting more investments in semiconductor fabrication plants. Besides silicon fabs, the government plans to encourage investments in compound semiconductor fabs, discrete component fabs and display fabrication units. India’s first silicon semiconductor fabrication plant is expected to become operational in 2028, and officials believe the new policy will help attract additional global manufacturers.

The fourth pillar aims to strengthen India’s Assembly, Testing, Marking and Packaging (ATMP) and Outsourced Semiconductor Assembly and Test (OSAT) capabilities. Following strong investor interest under the first phase, the government intends to bring advanced packaging technologies to India and position the country as a major global destination for semiconductor packaging.

Research and development form the fifth pillar of the programme. While India’s semiconductor journey has initially focused on mature technology nodes ranging from 28 nanometres to 110 nanometres, the government now plans to promote the development of more advanced semiconductor technologies through collaborations with leading domestic and international research institutions.

The sixth pillar focuses on skill development. The government will expand semiconductor education programmes across universities and technical institutions while increasing industry participation in specialised training related to clean rooms, fabrication plants and semiconductor manufacturing processes.

Boost to Manufacturing and National Security

According to the government, Semicon 2.0 is expected to support economic growth across multiple sectors, including consumer electronics, telecommunications, automobiles, artificial intelligence, aerospace, defence and industrial automation.

Officials said the programme will also strengthen India’s technological sovereignty by creating resilient domestic supply chains for critical semiconductor components, an area that has gained strategic importance following global chip shortages in recent years.

By developing capabilities across the entire semiconductor value chain, the initiative aims to reduce import dependence while enhancing India’s competitiveness in the global electronics industry.

Strong Progress Under Semicon 1.0

The government highlighted the achievements of the first phase of the India Semiconductor Mission, which laid the foundation for the country’s semiconductor ambitions.

Under Semicon 1.0, 12 manufacturing projects with a combined investment exceeding ₹1.64 lakh crore have already been approved. These include one silicon fabrication plant, one silicon carbide fabrication unit, an integrated gallium nitride (GaN) Micro LED display fabrication facility and nine semiconductor packaging units catering to sectors such as consumer electronics, automotive, telecommunications, power electronics and aerospace.

Of these approved projects, Micron, Kaynes Technology and CG Semi have already commenced commercial production, while another manufacturing facility is expected to begin operations during 2026.

On the design front, the government has approved 24 semiconductor design projects proposed by start-ups and MSMEs for financial assistance. Additionally, 105 start-ups and MSMEs have been provided access to industry-standard Electronic Design Automation (EDA) software tools to develop chips and System-on-Chips (SoCs) for applications including satellite communications, drones, surveillance systems, Internet of Things (IoT) devices, LED drivers, artificial intelligence platforms, telecom equipment and smart meters.

Many of these projects are currently in advanced stages of design and prototyping and are expected to move towards commercial deployment in the coming years.

Long-Term Vision

Industry observers say Semicon 2.0 marks the government’s shift from providing isolated manufacturing incentives to building a comprehensive semiconductor ecosystem covering design, fabrication, packaging, research, materials and skilled manpower.

With geopolitical shifts prompting global technology companies to diversify semiconductor supply chains beyond traditional manufacturing hubs, India is seeking to leverage its large engineering talent pool, expanding electronics manufacturing base and supportive policy framework to attract long-term investments in one of the world’s most strategically important industries.

The approval of Semicon 2.0 is expected to provide fresh impetus to India’s efforts to emerge as a major player in the global semiconductor landscape while supporting the country’s broader vision of becoming a leading technology and electronics manufacturing hub.