Cabinet Approves Semicon 2.0 Policy with ₹1.27 Lakh Crore Outlay
The Union Cabinet chaired by Prime Minister Narendra Modi has approved the Semicon 2.0 policy for developing India's semiconductor design and manufacturing ecosystem with a total budget outlay of ₹1,27,500 crore. This policy represents the government's commitment to providing sustained long-term support to the semiconductor sector and building on the momentum generated under the previous Semicon 1.0 initiative, with the aim of establishing India on the global semiconductor map.
Six-Pillar Strategy for Semiconductor Ecosystem Development
The Semicon 2.0 policy is structured around six comprehensive pillars. The design pillar focuses on building upon the initial success in chip design, where 105 startups are already developing chips, with emphasis on developing intellectual properties (IPs), chip designs, and systems to position India as a key semiconductor chip design IP country. The machines and materials pillar will incentivize companies involved in manufacturing and R&D of semiconductor manufacturing equipment, materials, chemicals, and gases to establish foundation for sustainable industry growth and develop precision manufacturing capabilities.
For manufacturing infrastructure, the policy aims to set up more fabs building on the confidence generated by the first fab scheduled for commissioning in 2028, attracting manufacturers to establish silicon fabs, compound semiconductor fabs, discrete component fabs, and display fabs. The ATMP/OSAT industry pillar will actively encourage advanced assembly, testing, marking, and packaging units with focus on bringing advanced technologies to India. The R&D pillar will focus on developing more advanced nodes beyond the current 28nm-110nm range through collaboration with leading R&D centers. The talent development pillar will build on the existing training of 68,000 students across 315 universities using latest EDA tools, deepening training levels and engaging industry for clean room, fab construction, and ecosystem training.
Progress Under Previous Semicon 1.0 Initiative
The document highlights significant progress under the previous scheme with twelve manufacturing units approved representing cumulative investment of over ₹1.64 lakh crore. These include one Silicon fab, one Silicon Carbide fab, an integrated Gallium Nitride Micro LED Display Fab, and nine packaging units serving sectors including consumer appliances, industrial electronics, automobiles, power electronics, telecommunications, and aerospace. Three companies—Micron, Kaynes, and CG Semi—have already started commercial production, with one more expected to commence operations in 2026.
In the design domain, twenty-four semiconductor design projects from startups and MSMEs have received financial support approval, while 105 startups/MSMEs have been granted access to industry-standard Electronic Design Automation tools. These companies are designing chips and SoCs for strategic and commercial applications including satellite communications, drones, surveillance cameras, IoT devices, LED drivers, AI systems, telecom equipment, and smart meters, currently at various stages of design development approaching deployment after successful prototyping.
Strategic Implications and Expected Outcomes
The Semicon 2.0 policy is expected to support economic growth across all sectors, strengthen national security through enhanced supply chain resilience, and establish technological leadership in critical sectors. The comprehensive ecosystem approach aims to catalyze both semiconductor design and manufacturing capabilities within India, reducing import dependence and creating a self-reliant semiconductor industry.