The Union Cabinet on July 15 approved Semicon 2.0 with a total budget outlay of ₹1,27,500 crore to strengthen India’s semiconductor design and manufacturing ecosystem. The scheme is aimed at providing long-term policy support while expanding the country’s semiconductor capabilities after the progress made under Semicon 1.0.
Semicon 2.0 is built around six key areas. It will expand semiconductor chip design by supporting intellectual property (IP), chip and system design, building on the work of 105 startups already developing chips. The scheme will also incentivise companies involved in manufacturing and research of semiconductor machines, materials, chemicals and gases required for chip production.
The programme will support the setting up of more semiconductor fabs, including silicon fabs, compound semiconductor fabs, discrete component fabs and display fabs. With the first fab scheduled to be commissioned in 2028, the government will also encourage more advanced ATMP/OSAT units and strengthen research and development for advanced semiconductor nodes and technologies in collaboration with leading R&D centres in India and abroad.
Talent development is another major focus of the scheme. So far, 315 universities have trained around 68,000 students in advanced chip design using Electronic Design Automation (EDA) tools. Under Semicon 2.0, training will be expanded further, with greater industry participation in clean room, fab construction and other semiconductor ecosystem skills.
Under Semicon 1.0, the government has approved 12 manufacturing units with a cumulative investment of more than ₹1.64 lakh crore. These include one silicon fab, one silicon carbide fab, one integrated Gallium Nitride Micro LED Display Fab and nine packaging units serving sectors such as consumer appliances, industrial electronics, automobiles, power electronics, telecommunications and aerospace. Micron, Kaynes and CG Semi have already started commercial production, while one more company is expected to begin production in 2026.
The design ecosystem has also expanded under Semicon 1.0, with 24 semiconductor design projects from startups and MSMEs approved for financial support. In addition, 105 startups and MSMEs have received access to industry-standard EDA tools to design chips and systems for applications including satellite communications, drones, surveillance cameras, Internet of Things (IoT) devices, LED drivers, AI systems, telecom equipment and smart meters. These projects are at different stages of development and will move to deployment after successful prototyping.
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