**Executive Summary**
The Union Cabinet has approved Semicon 2.0 with a total budget outlay of Rs. 1,27,500 crore to develop India’s semiconductor design and manufacturing ecosystem. Building on the momentum of Semicon 1.0, this long-term policy aims to establish India as a global leader in semiconductor IP and manufacturing. Key upcoming milestones include the scheduled commissioning of the first semiconductor fab in 2028 and the expansion of commercial production by 2026.
**Key Points / Main Content**
**Six Pillars of Semicon 2.0**
* **Design:** Focuses on deepening the design ecosystem and developing IPs for strategic and commercial products; builds on the 105 startups already active in the sector.
* **Machines and Materials:** Provides incentives for companies involved in the R&D and manufacturing of essential chemicals, gases, and machinery to ensure a sustainable supply chain.
* **Fabrication (Fabs):** Targets the establishment of various facilities, including silicon, compound semiconductor, discrete component, and display fabs.
* **ATMP/OSAT Industry:** Strengthens Assembly, Testing, Marking, and Packaging (ATMP) units with a focus on bringing advanced technologies to India.
* **Research & Development:** Shifts focus from 28nm-110nm nodes to developing more advanced nodes in collaboration with international R&D centers.
* **Talent Development:** Expands training for students at 315 universities using Electronic Design Automation (EDA) tools and engages industry for specialized clean room and fab construction training.
**Progress of ISM 1.0**
* **Manufacturing Success:** Twelve manufacturing units have been approved with a cumulative investment of over Rs. 1.64 Lakh Crore.
* **Production Status:** Three companies (Micron, Kaynes, and CG Semi) have started commercial production, with another expected to begin in 2026.
* **Design Support:** Twenty-four design projects have received financial support, and 105 startups/MSMEs have been granted access to industry-standard EDA tools for applications like AI, IoT, and telecommunications.
**Impact Analysis**
**Startups and MSMEs**
**Impact:** These entities receive critical access to EDA tools and financial support for designing System on Chips (SoCs) for diverse sectors like drones, AI, and satellite communications.
**Action Required:** They must focus on developing indigenous IPs and transitioning projects from the prototyping stage to successful deployment.
**Manufacturing and ATMP Companies**
**Impact:** Manufacturers of chips, materials, and machinery are eligible for government incentives and support for setting up high-tech facilities.
**Action Required:** Companies need to invest in domestic production units and align with the goal of commissioning new fabs, such as the one scheduled for 2028.
**Academic Institutions and Students**
**Impact:** Increased resources for 315 universities to train students on complex chip design, with 68,000 students already having undergone training.
**Action Required:** Universities must deepen the level of training and collaborate with the industry for specialized ecosystem training in clean room operations and fab construction.
**National Security and Economic Sectors**
**Impact:** Sectors such as aerospace, automobiles, telecommunications, and industrial electronics will benefit from enhanced supply chain resilience and local chip availability.
**Action Required:** Relevant government and industry bodies must integrate these semiconductor advancements to strengthen national security and establish technological leadership.
Key Entities Referenced
Semicon 2.0: A comprehensive government policy with a budget of Rs. 1,27,500 crore designed to develop India's semiconductor design and manufacturing ecosystem across six strategic pillars.
India Semiconductor Mission (ISM): The national initiative (referenced as ISM 1.0) that established the foundation for the sector by approving initial manufacturing units, design projects, and large-scale investments.
Ministry of Electronics & IT: The primary central ministry responsible for the oversight, formulation, and implementation of semiconductor and electronic manufacturing policies in India.
Ministry of Electronics & IT
Cabinet approves Semicon 2.0 - Government
delivers on its commitment for a long-term policy
support to Semiconductors in India
प्रव तथ: 15 JUL 2026 3:27PM by PIB Delhi
The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has approved the Semicon 2.0 for
the development of India's semiconductor design and manufacturing ecosystem, with a total budget outlay
of Rs.1,27,500 crore.
Recognising the requirement for a sustained and long-term support to Semiconductor sector in India and
also to build on the momentum generated under Semicon1.0, Semicon 2.0 aims to further the
Government's commitment towards putting our country on the semiconductor map of the world.
Semicon 2.0 is aimed to holistically build the semiconductor ecosystem on the following six pillars:
First pillar: Design: Semicon 2.0 will build upon the initial success in chip design. With 105 startups
already started developing chips, the focus is on deepening the design ecosystem. Further, building blocks
have been identified for the development of strategic and commercial products. Under Semicon 2.0, the
aim is to develop IPs, designs of chips and systems with this approach. The work under Semicon 2.0 will
place India as a key semiconductor chip design IP country.
Second pillar: Machines and materials: Companies involved in the manufacturing and R&D of the
machines and manufacturing of materials, chemicals and gases that are essential for manufacturing
semiconductors will be incentivized. This will lay the foundation for the sustainable growth of the
semiconductor industry. This will also help in developing the precision manufacturing industry in our
country.
Third pillar: Setting up more fabs: With the first fab scheduled to be commissioned in 2028, the world
is showing greater confidence in India’s semiconductor strategy. Efforts will be made to attract more
manufacturers to come to India and set up fabs to manufacture chips. This will include silicon fabs,
compound semiconductor fabs, discrete component fabs, display fabs, etc.
Fourth pillar: Further strengthening the ATMP/OSAT industry: With the success of ATMP units, the
world is now looking at India as an alternative location for setting up ATMP/OSAT units. These will be
actively encouraged with a focus on getting some of the most advanced ATMP technologies to India.
Fifth pillar: Research & Development: The semiconductor journey has started with 28nm-110nm as the
node. Now, the focus will be on developing more advanced nodes and other advanced technologies in
collaboration with leading R&D centres within and outside India.
Sixth pillar: Talent development: With 315 universities training students on complex chip design using
the latest EDA tools, around 68,000 students have already been trained. It will be developed further and
deepen the level of training while in college. Further, the industry will be actively engaged in deepening
the clean room, fab construction and other ecosystem training as well.Further, Semicon 2.0 will support economic growth across all sectors, strengthen national security through
enhanced supply chain resilience, and help establish technological leadership in critical sectors. Approach
of building the complete ecosystem, will catalyse semiconductor design and manufacturing in India.
Progress of ISM 1.0:
Manufacturing: So far, twelve (12) manufacturing units have been approved with a cumulative
investment of over Rs.1.64 Lakh Crore. These include one Silicon fab, one Silicon Carbide fab, an
integrated Gallium Nitride Micro LED Display Fab and nine (9) packaging units expected to cater to chip
requirements of sectors such as consumer appliances, industrial electronics, automobiles, power
electronics, telecommunications, aerospace, etc. Out of the 12 approved proposals, three companies,
Micron, Kaynes and CG Semi have started commercial production and one more are expected to start in
2026.
Design: Twenty-four (24) semiconductor design projects from start-ups and MSMEs have been approved
for financial support, while 105 start-ups/MSMEs have been granted access to industry-standard
Electronic Design Automation (EDA) tools. These companies are engaged in designing chips and SoCs
for a range of strategic and commercial applications, including satellite communications, drones,
surveillance cameras, Internet of Things (IoT) devices, LED drivers, AI systems, telecom equipment, and
smart meters. These companies are at different stages of design and development and will enter the
deployment stage after successful prototyping.
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MJPS
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