India Approves ₹1.28 Lakh Cr Semicon 2.0 to Boost Chip Ecosystem
The Indian government has approved the second phase of the Indian Semiconductor Mission, Semicon 2.0, with an outlay of ₹1.28 Lakh Crore aimed at strengthening the country's chip design and manufacturing capabilities.
The Union Cabinet has approved the second phase of the Indian Semiconductor Mission, dubbed Semicon 2.0, allocating ₹1.28 Lakh Crore (approximately $15.3 billion USD). This initiative aims to bolster India's capabilities in chip design and manufacturing.
The program will concentrate on six key areas: chip design, semiconductor equipment and materials, fabrication plants (fabs), assembly, testing, marking, and packaging (ATMP/OSAT) units, research and development, and talent development.
Under the design pillar, the government plans to expand support for India's indigenous chip design ecosystem, which currently involves 105 startups. The new policy will back the development of semiconductor intellectual property (IP), chip designs, and system-level products. Incentives will also be extended to companies producing essential equipment, chemicals, gases, and materials for semiconductor production, fostering a domestic supply chain.
In manufacturing, Semicon 2.0 seeks to attract more chipmakers to establish facilities in India. This includes silicon fabs, compound semiconductor fabs, and display fabs, with the nation's first semiconductor fab projected to be commissioned in 2028. The policy will also continue support for ATMP and OSAT facilities, aiming to attract advanced packaging technologies.
IT Minister Ashwini Vaishnaw stated that Semicon 2.0 will be implemented over six years. The design component will support both large Indian corporations and startups, with grants and investment support available for the latter. The government's focus includes developing strategic chips for defense and national security, alongside commercial chips driven by market demand. The program will also fund research into advanced semiconductor process nodes and enhance talent development initiatives in chip design and cleanroom operations.
The first phase, Semicon 1.0, saw the approval of 12 semiconductor manufacturing projects totaling over ₹1.64 Lakh Crore in investments. This expansion of India's semiconductor ambitions aligns with global efforts to diversify chip supply chains and reduce reliance on imports.