India Launches Massive Tech Push: Govt Approves ₹1,27,500 Crore 'Semicon 2.0' to Power Global Chip Design

India Launches Massive Tech Push: Govt Approves ₹1,27,500 Crore 'Semicon 2.0' to Power Global Chip Design​

The Union Cabinet has greenlit Semicon 2.0, a landmark initiative designed to accelerate the development of India's semiconductor design and manufacturing ecosystem. With a total budget outlay of Rs.1,27,500 crore, this approval solidifies the government's long-term commitment to establishing India as a major player on the global semiconductor map.

Semicon 2.0 builds directly upon the momentum generated by Semicon 1.0. The policy is aimed at providing sustained support across the entire value chain, ensuring that India can cater to complex industrial and technological requirements globally. This comprehensive approach seeks to catalyze holistic semiconductor design and manufacturing growth within the nation.

Focusing on the Six Pillars of Semiconductor Growth​

The new initiative is built upon six critical pillars designed to strengthen every aspect of the industry ecosystem. The design pillar aims to deepen the existing success, focusing on developing strategic and commercial chip designs and Intellectual Properties (IPs). This focus aims to position India as a leading semiconductor chip IP country.

Crucially, Semicon 2.0 includes incentives for companies involved in the manufacturing and R&D of essential materials and machines. By supporting this segment, the government is laying the foundation necessary for sustainable industry growth and bolstering India's precision manufacturing capabilities.

Attracting Fabs and Elevating Advanced Technology​

A major focus area under Semicon 2.0 is expanding fabrication capacity (fabs). With a first fab scheduled for commissioning in 2028, the global community is showing growing confidence in India’s strategy. Efforts will be intensified to attract more manufacturers to set up various types of fabs in India, including silicon, compound semiconductor, discrete component, and display fabs.

Strengthening the Assembly, Testing, Marking, and Packaging (ATMP) or OSAT industry is another key pillar. The government actively encourages setting up advanced ATMP/OSAT units in India, aiming to attract some of the most cutting-edge technologies available globally.

Advancing R&D and Talent Development​

The initiative addresses the need for higher technological sophistication by focusing on advanced research and development (R&D). While the journey has begun with 28nm-110nm nodes, the future focus is on developing more advanced nodes and technologies in collaboration with both domestic and international R&D centres.

To ensure a skilled workforce, talent development remains paramount. Around 315 universities are already training students in complex chip design using modern EDA tools, having trained approximately 68,000 students so far. The program will be further deepened through active industry engagement in cleanroom and fab construction training.

Progress and Momentum: Success Stories from Semicon 1.0​

The initial phase of the initiative has already yielded significant results across manufacturing and design. In terms of manufacturing, twelve units have been approved with a cumulative investment exceeding Rs.1.64 Lakh Crore. These projects include specialized fabs such as one Silicon fab, one Silicon Carbide fab, an integrated Gallium Nitride Micro LED Display Fab, and nine packaging units designed for sectors ranging from automobiles to aerospace.

In the design sector, 24 semiconductor design projects from startups and MSMEs have received financial support. Furthermore, 105 start-ups or MSMEs have been granted access to industry-standard Electronic Design Automation (EDA) tools. These companies are developing chips and Systems on Chips (SoCs) for critical applications including IoT devices, satellite communications, AI systems, and smart meters.