India has taken its semiconductor ambitions to the next level with the Union Cabinet approving the India Semiconductor Mission 2.0 (Semicon 2.0), allocating Rs 1.27 lakh crore to expand the country's semiconductor ecosystem. The new phase builds on the foundation laid by Semicon 1.0, which was launched in December 2021 with an outlay of Rs 76,000 crore.
Rather than focusing solely on manufacturing, Semicon 2.0 aims to develop the entire semiconductor value chain—from chip design and fabrication to advanced packaging, research, equipment, materials and talent development.
Announcing the initiative, Prime Minister Narendra Modi said Semicon 2.0 would attract greater investment, create high-value employment opportunities, strengthen supply chains and enhance India's technological self-reliance in critical sectors.
The programme was approved alongside the Rs 62,500 crore Mobile Phone Manufacturing Scheme, with the combined financial commitment across all Cabinet decisions amounting to Rs 2.19 lakh crore.
Progress Under Semicon 1.0
The first phase of the India Semiconductor Mission focused primarily on attracting investments in semiconductor manufacturing through financial incentives for fabrication plants, packaging facilities and chip design.
According to government data, 12 semiconductor manufacturing projects with a combined investment exceeding Rs 1.64 lakh crore have been approved under Semicon 1.0. These include one silicon fabrication plant, one silicon carbide fabrication facility, one integrated gallium nitride Micro LED display fabrication unit and nine semiconductor packaging facilities.
These projects are expected to support a wide range of industries, including consumer electronics, automobiles, industrial equipment, telecommunications, aerospace and power electronics.
Among the most significant developments is Tata's semiconductor fabrication facility at Dholera, Gujarat. The company has also partnered with Dutch semiconductor equipment manufacturer ASML to enable the production of 300 mm wafers in India, laying the groundwork for manufacturing more advanced semiconductor chips. Companies including Micron, Kaynes and CG Semi have already commenced commercial production under the programme.
Industry experts believe these investments have demonstrated India's ability to attract major global semiconductor companies.
On the design front, the government has approved 24 semiconductor design projects from startups and MSMEs for financial assistance, while more than 105 startups and small businesses have received access to industry-standard Electronic Design Automation (EDA) tools.
These companies are developing chips and system-on-chip (SoC) solutions for applications ranging from satellite communication, drones and surveillance systems to artificial intelligence, Internet of Things (IoT) devices, telecommunications equipment, LED drivers and smart meters.
Several indigenous processors, including Dhruv64 and Vikram32, have also emerged through these initiatives.
Talent development has been another major focus under Semicon 1.0. More than 315 universities now use industry-standard EDA software for semiconductor education, and nearly 68,000 students have received advanced chip design training.
The Six Pillars of Semicon 2.0
Electronics and Information Technology Minister Ashwini Vaishnaw outlined six strategic pillars that will shape the next phase of the mission:
Semiconductor design
Machines and materials
Additional fabrication facilities
ATMP and OSAT industries
Research and development
Talent development
Strengthening Chip Design
Semicon 2.0 expands support beyond providing design tools. The programme will now encourage the development of semiconductor intellectual property, chip architectures and complete system-level products for both commercial and strategic applications, building upon the work already underway by more than 105 Indian semiconductor startups.
Building Domestic Manufacturing Capability
A major addition under the new programme is support for manufacturing equipment and materials used in semiconductor production.
The government plans to incentivise companies involved in producing semiconductor manufacturing equipment as well as essential chemicals, specialty gases and raw materials required by fabrication facilities.
The programme will also encourage additional investments in silicon fabs, compound semiconductor facilities, discrete semiconductor manufacturing and display fabrication units.
Expanding Packaging Infrastructure
Semicon 2.0 places significant emphasis on Assembly, Testing, Marking and Packaging (ATMP) facilities as well as Outsourced Semiconductor Assembly and Test (OSAT) operations.
These facilities play a critical role by converting fabricated semiconductor wafers into finished chips ready for commercial use. Strengthening this segment is expected to reduce dependence on overseas packaging services.
Investing in Advanced Research
Research and development receives a much stronger focus under the second phase.
The government intends to support research into advanced semiconductor manufacturing processes beyond the current 28 nm to 110 nm technology nodes through collaborations with Indian and international research institutions.
While today's flagship smartphone processors are manufactured using advanced 3 nm and 4 nm technologies, India aims to gradually build capabilities that move closer to these cutting-edge manufacturing standards.
Developing Skilled Talent
The programme also seeks to deepen semiconductor education by strengthening university-level training and expanding industry-led programmes in cleanroom operations, fabrication plant construction and specialised semiconductor manufacturing skills.
The government has indicated that the detailed scheme guidelines are expected to be notified shortly.
Why Semicon 2.0 Matters
Unlike its predecessor, Semicon 2.0 adopts a broader, long-term strategy by addressing every major component of the semiconductor ecosystem instead of concentrating primarily on fabrication facilities.
Industry analysts argue that this integrated approach is essential because semiconductor manufacturing cannot become self-reliant without domestic capabilities in equipment, chemicals, materials and design.
Reducing dependence on imported gases, specialty chemicals and manufacturing tools could significantly strengthen India's supply chain resilience over the coming years.
For electronics manufacturers, the initiative offers opportunities to move beyond simple assembly operations towards higher-value activities such as chip design, semiconductor intellectual property development and advanced electronics manufacturing.
Experts also note that semiconductor fabrication requires long-term investment horizons, often taking a decade or more to mature. By adopting a policy framework aligned with these timelines, India is expected to attract greater interest from long-term global investors.
Growing International Interest
The government's presentation highlighted growing engagement from companies and institutions across the United States, Europe, Japan, Singapore, Germany and the Netherlands.
Several global technology companies, including Applied Materials, AMD, Microchip Technology, Lam Research and KLA, have already announced investments or collaborations supporting India's semiconductor ambitions.
According to the government, Semicon 2.0 is expected to strengthen India's technological capabilities, improve supply chain resilience and drive economic growth across multiple strategic industries.
The Road Ahead
While Semicon 1.0 successfully attracted major investments and established the initial framework for India's semiconductor industry, the second phase represents a far more ambitious undertaking.
Its success will depend not only on policy implementation but also on sustained private-sector participation, continued investment in research and development, and the availability of highly skilled engineering talent.
If executed effectively, Semicon 2.0 could significantly reduce India's dependence on imported semiconductor technologies and establish the country as an important participant in the global semiconductor value chain.
The government's broader objective is to substantially increase the share of semiconductor chips designed and manufactured domestically over the coming years, positioning India as a technology producer rather than merely a technology consumer in one of the world's most strategically important industries.
