The Union Cabinet on Wednesday approved Semicon 2.0, a new Rs 1.27 lakh crore (USD 13.17 billion) programme aimed at strengthening India's semiconductor manufacturing ecosystem and positioning the country as a global hub for chip production and technology.
The programme seeks to support the entire semiconductor value chain, including chip design, manufacturing, advanced packaging, research and development, talent development, and the production of critical equipment and materials required by the industry.
Semicon 2.0 builds on the progress achieved under Semicon 1.0 and reflects the government's long-term strategy to create a globally competitive semiconductor ecosystem in India. The new programme is structured around six key pillars.
The first pillar focuses on strengthening India's chip design capabilities. The government said 105 startups are already working on semiconductor chip development. Under the new programme, support will be extended to semiconductor intellectual property (IP), chip designs and systems for both strategic and commercial applications, with the objective of making India a leading global chip design nation.
The second pillar aims to develop a strong semiconductor supply chain by supporting companies involved in the manufacturing and research of semiconductor equipment, materials, chemicals and gases. The government said the initiative will help create a robust domestic ecosystem and enhance India's capabilities in precision manufacturing.
The third pillar focuses on expanding semiconductor manufacturing capacity by encouraging investments in silicon fabs, compound semiconductor fabs, discrete component fabs and display fabs. The government said international confidence in India's semiconductor strategy has increased significantly, with the country's first semiconductor fabrication plant expected to be commissioned in 2028.
The fourth pillar seeks to strengthen India's Assembly, Testing, Marking and Packaging (ATMP) and Outsourced Semiconductor Assembly and Test (OSAT) ecosystem. The focus will be on promoting advanced packaging technologies and building capabilities in an increasingly important segment of the global semiconductor value chain.
The fifth pillar is dedicated to research and development. It aims to help India move beyond existing semiconductor technology nodes through collaboration with leading research institutions in the country and abroad.
The sixth pillar focuses on talent development and building a specialised workforce for the semiconductor industry. The government said 315 universities are currently using advanced Electronic Design Automation (EDA) tools to train students, with around 68,000 students already trained. Industry participation will also be expanded to develop skills aligned with the specific requirements of semiconductor manufacturing.
Highlighting the progress under the India Semiconductor Mission (ISM) 1.0, the government said 12 manufacturing units involving cumulative investments of more than Rs 1.64 lakh crore (USD 17.02 billion) have been approved. These include one silicon fab, one silicon carbide fab, one integrated gallium nitride Micro LED display fab and nine packaging units.
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Commercial production has already commenced at Micron, Kaynes and CG Semi, while another approved unit is expected to begin production later this year.
On the design side, 24 semiconductor design projects have been approved for financial support. In addition, 105 startups and MSMEs have been provided access to industry-standard EDA tools to develop chips for applications including artificial intelligence systems, telecom equipment, drones, satellite communications, Internet of Things (IoT) devices and smart meters.
Union Minister Ashwini Vaishnaw also highlighted growing international confidence in India's semiconductor ambitions. He pointed to strategic partnerships with major semiconductor economies, including the United States through agreements in 2023 and the Pax Silica initiative in 2026, the European Union in 2023, Japan in 2023, Singapore in 2024, the Netherlands in 2025 and Germany in 2026.
India has also attracted significant investment commitments from leading global semiconductor companies. According to information shared by the minister, Applied Materials and AMD have each announced investments of USD 400 million, while Microchip Technology has committed USD 300 million. Lam Research has announced an investment of USD 1.1 billion, and KLA has committed USD 400 million.
In addition, ASML, IBL Electron and Merck have signed memoranda of understanding with the Tata Group to support the development of India's semiconductor ecosystem. The government said Semicon 2.0 will build on these investments and partnerships to create a deeper, more resilient and self-reliant semiconductor value chain in the country.
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