New Delhi: The Centre on Monday notified the Semicon 2.0 scheme with an outlay of ₹1.27 lakh crore, expanding India’s push to build a larger domestic semiconductor
industry across chip design, manufacturing, packaging and equipment.
The programme will run for six years and is spread across six major segments. It covers semiconductor fabs, chip assembly, packaging and testing, chip design by Indian companies and manufacturing of equipment needed for semiconductor production. The broader aim is to reduce India’s dependence on imported technology in key areas and deepen its role in the global chip supply chain.
What Semicon 2.0 will focus on
According to the government notification, “Semicon 2.0 provides fiscal support to various verticals across the complete value chain of the semiconductor industry, ranging from chip design, fabrication and packaging to various segments of the semiconductor ecosystem.”
The scheme will support development of semiconductor intellectual property cores, chips, System-on-Chips or SoCs and modules used in electronic products.
India also plans to build standard IP blocks across areas such as compute, memory, radio frequency, power, networking and sensors.
For a country that still imports a large share of the chips used in phones, vehicles, telecom equipment and industrial electronics, this is a fairly big policy bet.
Strategic chips to be identified by high-level panel
Electronics and Information Technology Minister Ashwini Vaishnaw said a high-level committee will identify semiconductor products considered strategically important for the country.
The committee will be chaired by the Principal Scientific Adviser and the National Security Adviser.
Vaishnaw said the scheme could help India meet up to 100 per cent of domestic demand for some products, including sensors.
Indian companies are expected to work with multinational firms, universities and startups for chip development. The government is also looking at mature technology platforms such as ARM, IBM Power, RISC-V and open-source technologies.
Startups and OCI-owned firms get access to incentives
Semicon 2.0 will open chip-design incentives to startups and companies owned by Overseas Citizens of India.
Startups may receive financial support through grants and equity co-investment. Vaishnaw said the government could later exit such investments through an equity valuation or royalty financing at 1.5 times the original investment.
He said, “Every major semiconductor equipment maker will set up operations in India very soon. We have received a good response from gas and equipment makers so far for the scheme.”
India eyes 10 per cent share of global semiconductor market
Vaishnaw said India could account for close to 10 per cent of the global semiconductor industry market in the coming years.
He said the government wants India to become firmly integrated into the global semiconductor value chain, covering everything from wafer fabrication to chip production and design.
The India Electronics and Semiconductor Association has estimated that Semicon 2.0 could lead to more than ₹5 lakh crore in cumulative private and industry investment over the next five to seven years across fabs, packaging, equipment, materials, design and research.
The scheme follows the first phase of the Semicon India programme, under which multiple semiconductor projects moved from approval to construction and, in some cases, commercial production. The next phase puts more focus on local technology development and the wider supply chain around chip manufacturing.
