Key Details
Semicon 2.0 programme marks the next phase of India’s semiconductor strategy by expanding policy support beyond fabrication towards chip design, manufacturing equipment, materials, advanced packaging, research, innovation and skilled talent
Focus Area | Key Initiative | Why It Matters |
|---|---|---|
Next-generation semiconductor strategy | Semicon 2.0 approved with an outlay of ₹1.275 lakh crore | Builds on ISM 1.0 by expanding support from individual projects to the entire semiconductor ecosystem |
Six-pillar ecosystem | Support for chip design, fabs, equipment & materials, ATMP/OSAT, R&D and talent | Strengthens capabilities across the complete semiconductor value chain |
Manufacturing expansion | Incentives for additional silicon fabs, compound semiconductor fabs, discrete semiconductor fabs and display fabs | Expands domestic manufacturing capacity and supply-chain resilience |
Innovation and research | Greater emphasis on advanced semiconductor technologies and indigenous IP | Enhances long-term technological competitiveness |
Talent development | Expansion of industry-linked semiconductor education and specialised training | Builds the skilled workforce required for semiconductor manufacturing and design |
Foundation already created | ISM 1.0 has approved 12 semiconductor projects involving investments exceeding ₹1.64 lakh crore | Provides the industrial base for ecosystem expansion under Semicon 2.0 |
India’s Semiconductor Strategy Enters Its Next Phase
The Cabinet has approved Semicon 2.0 with a budgetary outlay of ₹1.275 lakh crore, marking the next phase of India’s semiconductor strategy.
While the first phase of the India Semiconductor Mission focused on attracting semiconductor fabrication and packaging projects, Semicon 2.0 broadens policy support towards building a complete semiconductor ecosystem. The programme expands beyond manufacturing incentives to strengthen chip design, fabrication, advanced packaging, manufacturing equipment, materials, research and workforce capabilities, enabling India to participate across a larger share of the global semiconductor value chain.
Semicon 2.0 also complements the recently approved Mobile Phone Manufacturing Scheme (MPMS). While MPMS seeks to increase domestic value addition in finished electronics by promoting component localisation, Indian brands and R&D, Semicon 2.0 aims to strengthen the upstream semiconductor ecosystem that supplies those industries.
The Programme Supports the Entire Semiconductor Value Chain
Semicon 2.0 is organised around six pillars covering the entire semiconductor value chain:
Design: Indigenous chip design, EDA tools and semiconductor intellectual property.
Manufacturing: Silicon fabs, compound semiconductor fabs, discrete semiconductor fabs and display manufacturing.
Equipment & Materials: Semiconductor manufacturing equipment, specialty chemicals, industrial gases and precision materials.
ATMP/OSAT: Assembly, Testing, Marking and Packaging facilities, including advanced packaging.
Research & Development: Next-generation semiconductor technologies and advanced process nodes.
Talent Development: Industry-linked education and specialised semiconductor training.
Together, these pillars seek to reduce dependence on imported technologies while strengthening India’s long-term capabilities.
Building on the Foundations of Semicon 1.0
Under the India Semiconductor Mission, 12 semiconductor projects worth over ₹1.64 lakh crore have been approved, including one silicon fab, one silicon carbide fab, one integrated gallium nitride (GaN) Micro LED display fab and nine semiconductor packaging facilities.
Commercial production has already begun at facilities established by Micron, Kaynes and CG Semi, while additional projects are expected to become operational during 2026.
On the design side, 24 startup and MSME projects have received financial support, while 105 startups and MSMEshave gained access to industry-standard EDA tools to develop chips for AI, telecommunications, satellite communications, drones, IoT, surveillance systems and power electronics.
These achievements provide the foundation for Semicon 2.0 to build a more integrated and self-sustaining semiconductor ecosystem.
What is the Semiconductor Value Chain?
The semiconductor value chain covers every stage involved in producing a semiconductor chip. It begins with chip design, followed by fabrication (fabs), where wafers are manufactured, and then Assembly, Testing, Marking and Packaging (ATMP/OSAT) before chips are integrated into electronic products.
Supporting these stages are suppliers of manufacturing equipment, specialty chemicals, industrial gases, EDA software, research institutions and skilled talent. Countries with capabilities across multiple stages retain more technological know-how, generate greater domestic value addition and strengthen supply-chain resilience.
Policy Relevance
Signals a shift from supporting individual semiconductor projects to building a complete domestic semiconductor ecosystem.
Expands policy support across the semiconductor value chain, including design, fabrication, packaging, equipment, materials and advanced R&D.
Strengthens supply-chain resilience by developing domestic capabilities in upstream materials and downstream manufacturing.
Promotes indigenous intellectual property (IP), advanced semiconductor research and skilled talent to enhance long-term technological competitiveness.
Reinforces India’s ambition to become a globally integrated semiconductor hub supporting electronics manufacturing, strategic technologies and economic security.
Relevant Question for Policy Stakeholders: How can Semicon 2.0 translate India’s initial success in attracting semiconductor investments into a globally competitive ecosystem spanning chip design, manufacturing, advanced packaging, research and supply-chain capabilities?
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