THEBUSINESSBYTES
BUREAU
NEW
DELHI, JULY 15, 2026
In a major push to
transform India into a global semiconductor powerhouse, the Union Cabinet,
chaired by Prime Minister Narendra Modi, on Wednesday approved Semicon 2.0, a
comprehensive semiconductor development programme with a budget outlay of ₹1,27,500 crore.
The new policy builds on the momentum of the India Semiconductor Mission (ISM)
and underscores the government’s long-term commitment to creating a globally
competitive semiconductor design and manufacturing ecosystem.
The ambitious
initiative is designed to strengthen every link of the semiconductor value
chain through a six-pillar strategy covering chip design, manufacturing
equipment and materials, fabrication units, advanced packaging, research and
development, and talent creation. The government said the holistic approach
will position India as a key player in the global semiconductor landscape while
supporting economic growth, technological self-reliance and national security
through resilient supply chains.
A key focus of
Semicon 2.0 will be expanding India’s chip design capabilities. Building on the
success of over 105 startups already engaged in chip development, the programme
aims to create globally competitive intellectual property, semiconductor
designs and system-level solutions, establishing India as a leading hub for
semiconductor design IP.
To strengthen
domestic manufacturing, the scheme will incentivise companies involved in
producing semiconductor manufacturing equipment, specialty materials, chemicals
and industrial gases—critical inputs required for chip fabrication. The move is
expected to create a robust domestic supply chain while boosting India’s
precision manufacturing capabilities.
The government will
also intensify efforts to attract additional fabrication facilities to India.
With the country’s first silicon fabrication plant scheduled to become
operational in 2028, Semicon 2.0 seeks to bring more silicon fabs, compound
semiconductor fabs, discrete component fabs and display fabrication units to
the country, reflecting growing international confidence in India’s
semiconductor strategy.
Advanced chip
packaging will remain another major priority. Following the success of
Assembly, Testing, Marking and Packaging (ATMP) projects, the government plans
to encourage more global investments in advanced ATMP and OSAT (Outsourced
Semiconductor Assembly and Test) facilities, further integrating India into
global semiconductor supply chains.
Research and
innovation form another cornerstone of the programme. While India’s
semiconductor journey began with mature technology nodes ranging from 28nm to
110nm, the new phase aims to support development of advanced process nodes and
next-generation semiconductor technologies through collaboration with leading
domestic and international research institutions.
Talent development
will receive renewed attention under the expanded programme. Currently, 315
universities across the country are training students in advanced chip design
using industry-standard Electronic Design Automation (EDA) tools, with nearly
68,000 students already trained. Semicon 2.0 will deepen academic training
while expanding industry-led programmes in clean-room operations, fabrication
plant construction and other specialised semiconductor skills.
The approval comes
against the backdrop of encouraging progress under Semicon 1.0. The government
has already approved 12 semiconductor manufacturing projects involving
cumulative investments exceeding ₹1.64 lakh crore, including one silicon fabrication plant,
one silicon carbide fab, an integrated gallium nitride Micro LED display fab
and nine semiconductor packaging units catering to industries ranging from
consumer electronics and automobiles to
telecommunications, aerospace and industrial electronics. Among these, Micron,
Kaynes and CG Semi have already commenced commercial production, with another
project expected to begin operations in 2026.
India’s semiconductor
design ecosystem has also witnessed rapid expansion. Twenty-four startup and
MSME chip design projects have received financial support, while 105 startups
and MSMEs have been granted access to industry-standard EDA tools. These
companies are developing chips and system-on-chip (SoC) solutions for strategic
and commercial applications, including satellite communications, drones,
surveillance systems, Internet of Things devices, artificial intelligence,
telecom equipment and smart metering.
With Semicon 2.0, the
government aims to build on these early successes by creating a complete
semiconductor ecosystem that spans innovation, manufacturing, skilled manpower
and global partnerships. The programme is expected to significantly enhance
India’s technological competitiveness and strengthen its position as a trusted
destination in the rapidly evolving global semiconductor industry.
