Cabinet approves ₹1.27 lakh crore Semicon 2.0 to strengthen India’s chip manufacturing ecosystem
New Delhi: The Union Cabinet, chaired by Prime Minister Narendra Modi, on Wednesday approved Semicon 2.0, a ₹1.27 lakh crore programme aimed at accelerating the development of India’s semiconductor design and manufacturing ecosystem and providing long-term policy support to the sector.
The new initiative builds on the momentum created by the India Semiconductor Mission (ISM) under Semicon 1.0 and seeks to position India as a major global hub for semiconductor design, manufacturing and innovation.
The government said Semicon 2.0 will focus on six key pillars to develop a comprehensive semiconductor ecosystem.
The first pillar aims to strengthen chip design by expanding support for startups and intellectual property (IP) creation. With 105 startups already engaged in chip development, the programme seeks to establish India as a global centre for semiconductor design.
The second pillar focuses on promoting the domestic manufacturing of semiconductor equipment, materials, specialty chemicals and industrial gases, while also encouraging research and development in precision manufacturing technologies.
Under the third pillar, the Centre plans to attract additional semiconductor fabrication plants (fabs), including silicon, compound semiconductor, discrete component and display fabs. The first semiconductor fab approved under the earlier programme is expected to become operational in 2028.
The fourth pillar seeks to further expand India’s Assembly, Testing, Marking and Packaging (ATMP) and Outsourced Semiconductor Assembly and Test (OSAT) capabilities by encouraging global companies to establish advanced packaging facilities in the country.
Research and development forms the fifth pillar of the programme, with the government aiming to move beyond the current 28nm-110nm technology nodes and support the development of more advanced semiconductor technologies in collaboration with leading research institutions in India and abroad.
The sixth pillar focuses on talent development. The government said 315 universities are already offering semiconductor design training using industry-standard Electronic Design Automation (EDA) tools, with nearly 68,000 students trained so far. The programme will further strengthen industry-oriented training in chip design, clean-room operations, semiconductor fabrication and related technologies.
According to the government, Semicon 2.0 will boost economic growth across multiple sectors, strengthen national security through resilient semiconductor supply chains and enhance India’s technological capabilities in strategic industries.
Progress under Semicon 1.0
Highlighting the achievements of the India Semiconductor Mission, the government said 12 semiconductor manufacturing projects with a combined investment of over ₹1.64 lakh crore have been approved so far. These include one silicon fab, one silicon carbide fab, an integrated gallium nitride Micro LED display fab and nine semiconductor packaging units catering to sectors such as consumer electronics, automobiles, telecommunications, industrial electronics, aerospace and power electronics.
Of the approved projects, Micron, Kaynes and CG Semi have already commenced commercial production, while another manufacturing unit is expected to begin operations in 2026.
On the design front, 24 semiconductor design projects by startups and MSMEs have received financial assistance, while 105 startups and MSMEs have been provided access to industry-standard EDA tools. These companies are developing chips and system-on-chip (SoC) solutions for applications including artificial intelligence, satellite communications, drones, surveillance systems, Internet of Things (IoT) devices, telecom equipment, LED drivers and smart meters. Several of these projects are currently in the design and prototyping stage and are expected to move towards commercial deployment after successful validation.
