India's Semicon 2.0: Rs 1.27 lakh crore boost for chip manufacturing

The Union Cabinet has approved Semicon 2.0, a Rs 1.27 lakh crore programme to strengthen India's semiconductor ecosystem. The scheme aims to support chip design, manufacturing, research, and talent development, building on Semicon 1.0.

The Union Cabinet on Wednesday approved Semicon 2.0, a new programme with a budget of Rs 1.27 lakh crore (USD 13.17 billion) to strengthen India's semiconductor manufacturing ecosystem.

The scheme aims to support chip design, manufacturing, advanced packaging, research, talent development and the production of key equipment and materials needed for the industry. The programme builds on the progress made under Semicon 1.0 and reflects the government's long-term commitment to making India a global semiconductor hub.

Semicon 2.0: The Six Pillars

Semicon 2.0 is based on six key pillars. The first pillar focuses on strengthening India's chip design ecosystem. The government said 105 startups are already developing semiconductor chips. The new scheme will support semiconductor intellectual property (IP), chip designs and systems for strategic and commercial use to position India as a leading chip design nation.

The second pillar aims to develop the semiconductor supply chain by supporting companies involved in manufacturing and research of semiconductor equipment, materials, chemicals and gases. The government said this will help build a strong domestic ecosystem and improve precision manufacturing.

The third pillar focuses on expanding semiconductor manufacturing by encouraging investments in silicon fabs, compound semiconductor fabs, discrete component fabs and display fabs. The government said global confidence in India's semiconductor strategy has increased, with the country's first semiconductor fabrication plant expected to be commissioned in 2028.

The fourth pillar aims to strengthen India's Assembly, Testing, Marking and Packaging (ATMP) and Outsourced Semiconductor Assembly and Test (OSAT) ecosystem by promoting advanced packaging technologies.

The fifth pillar focuses on research and development to help India move beyond existing semiconductor technology nodes through collaboration with leading research institutions in India and abroad.

The sixth pillar is dedicated to talent development. The government said 315 universities are using advanced Electronic Design Automation (EDA) tools to train students, with around 68,000 students trained so far. Industry participation will also be expanded to develop specialised skills required for semiconductor manufacturing.

Progress Under India Semiconductor Mission 1.0

Highlighting the progress made under the India Semiconductor Mission (ISM) 1.0, the government said 12 manufacturing units with cumulative investments exceeding Rs 1.64 lakh crore (USD 17.02 billion) have been approved, including one silicon fab, one silicon carbide fab, one integrated gallium nitride Micro LED display fab and nine packaging units. Commercial production has already begun at Micron, Kaynes and CG Semi, while another unit is expected to commence production later this year.

On the design front, 24 semiconductor design projects have been approved for financial support, while 105 startups and MSMEs have been granted access to industry-standard EDA tools to develop chips for applications such as AI systems, telecom equipment, drones, satellite communications, IoT devices and smart meters.

Global Partnerships and Major Investments

Vaishnaw also highlighted the growing international confidence in India's semiconductor ambitions, pointing to strategic partnerships with major semiconductor economies, including the United States (2023 and Pax Silica in 2026), the European Union (2023), Japan (2023), Singapore (2024), the Netherlands (2025) and Germany (2026) as part of efforts to strengthen the country's semiconductor ecosystem.

India has attracted significant commitments from leading global semiconductor companies. According to information shared by the minister, Applied Materials and AMD have each announced investments of USD 400 million, while Microchip Technology has committed USD 300 million. Lam Research has announced an investment of USD 1.1 billion, and KLA has committed USD 400 million.

In addition, ASML, IBL Electron and Merck have signed memoranda of understanding (MoUs) with the Tata Group to support semiconductor ecosystem development in India. (ANI)

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