The Union Cabinet, chaired by Prime Minister Narendra Modi, approved Semicon 2.0 on July 15, 2026, with a budgetary outlay of ₹1,27,500 crore, marking a significant expansion of India’s semiconductor policy.
The programme is intended to extend the government’s support beyond the projects initiated under Semicon 1.0 and develop a more comprehensive domestic semiconductor ecosystem. It will cover chip design, fabrication facilities, packaging, equipment and materials, research and development, and workforce training.
The government said the long-term programme would also seek to improve supply-chain resilience, strengthen capabilities in strategically important technologies and reduce India’s dependence on imported semiconductor products and inputs.
Six pillars of Semicon 2.0
Semicon 2.0 has been structured around six areas: design; machinery and materials; additional fabrication plants; semiconductor assembly and packaging; research and development; and talent creation.
Greater support for chip design
Under the design component, the government plans to build on the work undertaken by 105 start-ups and micro, small and medium enterprises that have begun developing semiconductor products.
The programme will support the creation of intellectual property, chip designs and complete systems for strategic as well as commercial applications. The government has also identified technology building blocks that could be used to develop products for the Indian and international markets.
The objective is to strengthen India’s position not only as a destination for semiconductor services but also as a source of semiconductor intellectual property and domestically developed chip technologies.
Incentives for machinery, materials and chemicals
The second pillar will extend incentives to companies involved in the manufacturing and research and development of semiconductor equipment. Support will also cover producers of the specialised materials, chemicals and gases required in chip fabrication.
This represents a widening of India’s semiconductor strategy beyond fabrication and packaging plants. Semiconductor manufacturing depends on an extensive supplier network involving precision machinery, high-purity chemicals, wafers, industrial gases and other specialised inputs.
By encouraging these supporting industries, the government aims to develop a more sustainable domestic supply chain while expanding India’s precision-manufacturing capabilities.
More fabrication plants planned
Semicon 2.0 will seek to attract additional chip manufacturers to establish fabrication facilities in India. The proposed expansion will cover silicon fabs, compound-semiconductor fabs, discrete-component fabs and display fabs.
India’s first semiconductor fabrication plant is scheduled to be commissioned in 2028, according to the government. The next phase will attempt to build on the investment momentum created under the original semiconductor programme and bring more manufacturers into the country.
The inclusion of compound semiconductors and discrete components is significant because these technologies have applications across electric vehicles, telecommunications, renewable energy, industrial equipment, defence systems and consumer electronics.
Focus on advanced packaging technologies
The fourth component of Semicon 2.0 will expand support for Assembly, Testing, Marking and Packaging, or ATMP, and Outsourced Semiconductor Assembly and Test, known as OSAT.
India has already attracted multiple investments in semiconductor packaging under the first phase of its semiconductor programme. The government now plans to encourage more ATMP and OSAT facilities, with a particular focus on bringing advanced packaging technologies into the country.
Packaging is a critical stage of the semiconductor supply chain, involving the assembly, connection, protection and testing of fabricated chips before they are incorporated into electronic products.
Research to move beyond existing technology nodes
Research and development will form the fifth pillar of the programme. India’s semiconductor manufacturing journey has so far focused on process nodes ranging from 28 nanometres to 110 nanometres.
Under Semicon 2.0, the government plans to pursue more advanced process nodes and related technologies through collaboration with leading research and development institutions in India and overseas.
The move indicates an attempt to develop longer-term technological capabilities alongside the immediate establishment of manufacturing and packaging facilities.
Workforce programme to expand beyond chip design
Talent development will constitute the sixth pillar. According to the government, 315 universities are currently training students in complex chip design with industry-standard Electronic Design Automation tools. Around 68,000 students have received such training so far.
Semicon 2.0 will seek to increase the depth of semiconductor instruction offered at the university level. The government also plans to involve industry in developing skills related to clean-room operations, fab construction and other parts of the manufacturing ecosystem.
The wider training strategy reflects the range of skills required by the semiconductor sector, extending from circuit design and materials science to plant construction, equipment maintenance, contamination control and high-precision manufacturing.
Twelve manufacturing projects approved under first phase
The government also outlined the progress made under Semicon 1.0, or the first phase of the India Semiconductor Mission.
As of July 15, 2026, 12 semiconductor manufacturing units had received approval, representing cumulative proposed investment of more than ₹1.64 lakh crore. These projects comprise one silicon fabrication plant, one silicon-carbide fabrication plant, an integrated gallium-nitride and micro-LED display fab, and nine semiconductor packaging units.
The facilities are expected to supply components for consumer appliances, automobiles, telecommunications, industrial electronics, power electronics and aerospace applications, among other sectors.
Three approved companies—Micron, Kaynes and CG Semi—have begun commercial production. The government said another unit was expected to commence production during 2026.
Twenty-four semiconductor design projects receive support
Under the design component of the first programme, 24 semiconductor projects led by start-ups and MSMEs have been approved for financial assistance. Separately, 105 start-ups and MSMEs have received access to industry-standard EDA tools used to design, simulate and verify semiconductor products.
These companies are working on chips and systems-on-chip for satellite communications, drones, surveillance cameras, Internet of Things devices, LED drivers, artificial intelligence systems, telecommunications equipment and smart meters.
The projects are currently at different stages of design and development. Products that successfully complete prototyping will subsequently move towards deployment.
Semicon 2.0 signals a shift towards a broader semiconductor industrial policy covering the complete value chain rather than concentrating only on chip fabrication. Its implementation, however, will depend on the timely commissioning of approved plants, the development of reliable supporting infrastructure and India’s ability to attract specialised technology, suppliers and skilled workers.
