The Indian Cabinet has approved Semicon 2.0, a comprehensive semiconductor development programme with a budgetary outlay of ₹1,27,500 crore, aimed at accelerating India’s emergence as a global semiconductor design and manufacturing hub.
Building on the momentum created by the India Semiconductor Mission (ISM) under Semicon 1.0, the new programme seeks to create a complete semiconductor ecosystem by supporting chip design, fabrication, advanced packaging, research, talent development and the domestic manufacturing of critical equipment and materials.
The government said the initiative is intended to provide sustained long-term support to one of the world’s most strategic industries while strengthening India’s technological self-reliance and global competitiveness.
Six pillars to drive semiconductor growth
Semicon 2.0 has been structured around six strategic pillars that together aim to establish a comprehensive semiconductor value chain in India.
The first pillar focuses on expanding India’s semiconductor design ecosystem. The government said the country has already made significant progress, with 105 startups engaged in chip design under the first phase of the programme.
Under Semicon 2.0, the focus will shift towards developing intellectual property (IP), advanced chip designs and complete semiconductor systems for both commercial and strategic applications.
The initiative aims to establish India as a globally recognised semiconductor design and IP development centre.
Developing machines and materials
The second pillar seeks to promote domestic manufacturing of semiconductor equipment and critical materials.
Companies involved in manufacturing semiconductor production machinery, specialty chemicals, gases and advanced materials will receive incentives to establish manufacturing and research facilities in India.
The government believes this will strengthen supply chain resilience while laying the foundation for a precision manufacturing ecosystem.
Attracting more fabrication plants
The third pillar focuses on expanding India’s semiconductor fabrication capacity. With the country’s first semiconductor fabrication plant expected to be commissioned in 2028, the government plans to attract additional investments in silicon fabs, compound semiconductor fabs, discrete semiconductor units and display fabrication facilities.
The objective is to establish India as an attractive destination for global semiconductor manufacturers.
Expanding ATMP and OSAT capabilities
The fourth pillar aims to strengthen India’s Assembly, Testing, Marking and Packaging (ATMP) and Outsourced Semiconductor Assembly and Test (OSAT) industry.
Following the positive response to existing semiconductor packaging projects, the government intends to encourage more global companies to establish advanced packaging facilities in India.
The focus will be on bringing cutting-edge packaging technologies to the country and integrating India more deeply into global semiconductor supply chains.
Accelerating research and development
The fifth pillar seeks to promote advanced semiconductor research. While India’s semiconductor journey has begun with technologies ranging from 28 nanometres (nm) to 110nm, the government now plans to support research into more advanced process nodes and emerging semiconductor technologies.
This will involve collaboration with leading research institutions in India and abroad.
Building a skilled workforce
Talent development forms the sixth pillar of Semicon 2.0. Currently, 315 universities across the country are training students in semiconductor chip design using industry-standard Electronic Design Automation (EDA) tools.
Around 68,000 students have already received specialised semiconductor design training.
The government plans to deepen these efforts by expanding university-level programmes and involving the semiconductor industry in specialised training covering clean-room operations, semiconductor fabrication and ecosystem development.
Strengthening India’s strategic capabilities
The government said Semicon 2.0 will contribute significantly to India’s economic growth while strengthening national security through resilient semiconductor supply chains.
The programme is also expected to support technological leadership in strategic sectors including telecommunications, artificial intelligence, defence, automotive electronics, industrial automation and consumer electronics.
By developing the entire semiconductor value chain domestically, India aims to reduce import dependence and improve technological sovereignty.
Towards a global semiconductor hub
The approval of Semicon 2.0 marks one of India’s most ambitious industrial policy initiatives in the technology sector.
Industry experts believe the programme will accelerate investments across semiconductor manufacturing, design, research and advanced packaging while encouraging greater participation by global technology companies.
With sustained policy support, expanding domestic capabilities and growing industry participation, the government aims to position India as an important player in the global semiconductor ecosystem over the coming decade.