Cabinet Approves ₹1.27 Lakh Crore Semicon 2.0 to Strengthen India’s Semiconductor Ecosystem

The Union Cabinet of India, led by Prime Minister Narendra Modi, has officially approved the Semicon 2.0 initiative, allocating a substantial budget of ₹1,27,500 crore. This program aims to bolster India’s semiconductor design and manufacturing capabilities while providing long-term policy support to the sector. The initiative is a significant step in positioning India as a global leader in semiconductor innovation and manufacturing.

Building on Previous Successes

Semicon 2.0 is designed to build upon the momentum generated by the earlier Semicon 1.0 program. The new initiative seeks to create a comprehensive ecosystem that integrates various aspects of semiconductor design, manufacturing, and innovation. By adopting a holistic approach, the government aims to transform India into a major global hub for semiconductor activities.

Key Pillars of Semicon 2.0

The government has outlined six key pillars that form the foundation of Semicon 2.0:

1. Chip Design: The initiative will enhance India’s chip design ecosystem. With 105 startups already engaged in semiconductor chip development, the focus will shift towards creating intellectual property (IP), chip designs, and complete systems for both strategic and commercial applications. This aims to establish India as a leading player in semiconductor design IP.

2. Domestic Manufacturing: The second pillar emphasizes promoting the domestic production of semiconductor equipment, materials, chemicals, and specialty gases essential for chip manufacturing. Companies involved in the R&D of these critical inputs will receive incentives to foster a sustainable semiconductor supply chain, thereby enhancing India’s precision manufacturing capabilities.

3. Fabrication Capacity: The third pillar aims to expand semiconductor fabrication capacity by attracting global manufacturers to set up fabrication facilities in India. The first semiconductor fabrication plant is expected to be commissioned by 2028, with plans to draw investments in various types of fabs, including silicon and compound semiconductor facilities.

4. Packaging Technologies: The fourth pillar focuses on strengthening India’s Assembly, Testing, Marking, and Packaging (ATMP) and Outsourced Semiconductor Assembly and Test (OSAT) industries. The government intends to attract advanced semiconductor packaging technologies to establish India as a viable global destination for semiconductor packaging.

5. Research and Development: The fifth pillar is dedicated to advancing semiconductor R&D. While India’s semiconductor journey has begun with technologies ranging from 28 nanometers to 110 nanometers, the government aims to support the development of more advanced nodes and next-generation technologies in collaboration with leading research institutions.

6. Talent Development: The sixth pillar focuses on enhancing talent development in the semiconductor sector. Currently, 315 universities are training students in advanced chip design using industry-standard Electronic Design Automation (EDA) tools, with nearly 68,000 students trained. Semicon 2.0 will expand this training ecosystem, increasing industry participation in areas such as clean-room operations and semiconductor fabrication.

Economic and Security Implications

The government anticipates that Semicon 2.0 will stimulate economic growth across various sectors, strengthen national security through resilient semiconductor supply chains, and enhance India’s technological capabilities in critical industries. By addressing the entire semiconductor value chain, the initiative aims to accelerate both design and manufacturing processes within the country.

Highlighting the achievements of the India Semiconductor Mission (ISM) 1.0, the government reported that 12 semiconductor manufacturing projects have been approved, with a cumulative investment exceeding ₹1.64 lakh crore. These projects include a silicon fabrication plant, a silicon carbide fabrication unit, and nine semiconductor packaging units, which are expected to meet the semiconductor needs of sectors such as consumer electronics, industrial equipment, and telecommunications.

Progress and Future Prospects

Among the approved projects, companies like Micron, Kaynes, and CG Semi have already commenced commercial production, with additional units expected to begin operations later this year. On the design front, 24 semiconductor design projects from startups and MSMEs have received financial support, and 105 startups have been granted access to EDA tools. These companies are developing chips and Systems-on-Chip (SoCs) for diverse applications, including satellite communications, IoT devices, and AI systems.

The government emphasizes that Semicon 2.0 reflects its long-term commitment to establishing India as a global semiconductor powerhouse. By strengthening domestic capabilities across design, manufacturing, research, and workforce development, the initiative aims to position India favorably in the global semiconductor landscape.

For further information, visit the source: The Mainstream.

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