India Building Semiconductor Future with Semicon 2.0 Initiative
The Union Cabinet approved Semicon 2.0 on July 15, 2026, with an outlay of ₹127,500 crore to advance India's semiconductor ecosystem beyond the foundation laid by Semicon 1.0. This new phase focuses on six strategic pillars: research and development, chip design, machines and materials, setting up more fabrication plants, talent development, and strengthening the ATMP/OSAT (Assembly, Testing, Marking and Packaging/Outsourced Semiconductor Assembly and Test) industry. The program aims to position India as a trusted global semiconductor hub and advance the vision of Viksit Bharat.
Strategic Importance and Market Context
Semiconductors are recognized as building blocks of modern technology and economic power, critical for artificial intelligence, telecommunications, electric mobility, defense, and advanced manufacturing. The global semiconductor market grew at a compound annual growth rate of 6.5% between 2014 and 2024 and is projected to grow at 8.5% over the next 5-10 years. India's semiconductor demand is projected to reach $110 billion by FY2030 and exceed $200 billion by FY2035, while the country spent almost $150 billion on semiconductor product imports during FY17-FY25, growing at a 23% CAGR during this period. Without intervention, annual imports could reach $240 billion by 2035.
Semicon 1.0 Foundation and Achievements
The initial Semicon 1.0 program was approved in December 2021 with an outlay of ₹76,000 crore and has delivered significant results. Twelve semiconductor manufacturing units have been approved with cumulative investment of over ₹1.64 lakh crore, including one silicon fab, one silicon carbide fab, one Gallium Nitride Micro LED Display Fab, and nine ATMP/OSAT units located across Gujarat, Assam, Uttar Pradesh, Odisha, Punjab, and Andhra Pradesh. Five units have commenced commercial production. Additionally, twenty-four chip design projects have been approved with a total value of about ₹900 crore, and more than 1 lakh engineers from 500 organizations including 400 academic institutions and 100 start-ups have been provided access to advanced chip-design tools, resulting in over 300 chip designs developed.
Current Capabilities and International Partnerships
India hosts about 7% of the world's Global Capability Centres in the semiconductor domain and employs nearly 20% of the global semiconductor chip design workforce. The country has established semiconductor cooperation with the United States, Japan, the European Union, Singapore, and the Netherlands. Specific achievements include signing a Joint Declaration of Intent on an India-Germany Semiconductor Ecosystem Partnership during the German Chancellor's visit in January 2026 and joining Pax Silica at the India AI Impact Summit in February 2026. The Semiconductor Laboratory (SCL) in Mohali has developed flight-grade chips for satellites and launch vehicles, including the Vikram processor used in satellite launch vehicles and radiation-hardened ADC chips used in the Aditya-L1 solar mission.
Supporting Policy Ecosystem
India's semiconductor ambitions are supported by multiple complementary policies including the National Policy on Electronics 2019, Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS) 2020, Modified Electronics Manufacturing Clusters Scheme (EMC 2.0) 2020, Production Linked Incentive Scheme for Large Scale Electronics Manufacturing 2020, PLI Scheme 2.0 for IT Hardware 2023, Electronics Components Manufacturing Scheme with enhanced outlay of ₹40,000 crore (Budget 2026-27), Mobile Phone Manufacturing Scheme 2026, Research, Development and Innovation Scheme, and 100% Foreign Direct Investment policy for electronics manufacturing.