Semicon 2.0 Solidifies India’s Role as Global Chip Hub

The newly approved Semicon 2.0 programme provides critical policy continuity, reinforcing India’s established credibility in the global semiconductor value chain.

India’s semiconductor aspirations received a significant boost this week as the Union Cabinet approved the second phase of the Semicon India Programme, known as Semicon 2.0. With a fiscal outlay of ₹1,27,500 crore, the initiative aims to accelerate the development of a robust and resilient semiconductor ecosystem, building upon the successes of the initial programme.

Ashok Chandak, President of SEMI India and the India Electronics and Semiconductor Association (IESA), lauded the move, stating that the policy provides the necessary continuity to translate India’s existing credibility into tangible manufacturing capability.

A Comprehensive Value Chain Approach

Unlike earlier efforts, Semicon 2.0 is designed to cover the entire semiconductor value chain. According to Chandak, the policy’s strength lies in its holistic approach, which encompasses six critical pillars: fabrication and foundries, assembly and testing (OSAT), research and development (R&D), chip design, talent development, and the supply chain for machines and materials.

“All these six items put together complete the entire value chain or supply chain of semiconductor manufacturing,” Chandak explained. He noted that this comprehensive coverage is the single biggest differentiator of the new policy, providing defined incentives for various verticals and helping to accelerate capacity creation across the country.

Building on Established Credibility

The approval of Semicon 2.0 marks a transition from policy formulation to production readiness. With several OSAT plants already operational and chips manufactured in India beginning to integrate into electronic products like mobile phones, the country has moved beyond mere ambition.

The government’s decision to increase the fiscal outlay to ₹1,27,500 crore—an incremental increase over the previous policy—demonstrates a strong commitment to long-term policy support. Industry leaders expect this sustained investment to attract more fabrication units, advanced R&D centers, and fabless design firms, further cementing India’s position as a reliable partner in the global semiconductor network.

Official Sources

• Union Cabinet: Approved the Semicon 2.0 programme with a fiscal outlay of ₹1,27,500 crore.

• IESA: Ashok Chandak, President of SEMI India and IESA, emphasized the policy’s role in providing continuity and strengthening India's manufacturing capabilities.

• India Semiconductor Mission (ISM): Serves as the nodal agency for implementing semiconductor and display schemes.

Why It Matters

Semicon 2.0 is crucial for India’s technological sovereignty. By fostering domestic capacity in chip design, manufacturing, and R&D, the programme reduces the nation's vulnerability to global supply chain disruptions. For businesses, the policy offers a stable and incentivized environment to invest in high-tech manufacturing, while for the broader economy, it supports the growth of sectors ranging from telecommunications and automotive to artificial intelligence.

Key Facts at a Glance

• Total Outlay: ₹1,27,500 crore allocated for Semicon 2.0.

• Strategic Focus: Covers six pillars, including fabrication, OSAT, R&D, design, talent, and supply chain materials.

• Goal: To build a robust and resilient semiconductor ecosystem and accelerate industrial capacity.

• Progress: India has already gained global credibility, with several OSAT facilities now operational.

FAQ

What is the primary difference between Semicon 1.0 and Semicon 2.0?

Semicon 2.0 builds on the foundation of the first phase by providing policy continuity and expanding the scope to cover the entire value chain, including machines and materials, with an increased fiscal outlay.

How will Semicon 2.0 impact the electronics industry?

The programme is expected to increase the domestic availability of semiconductor components, which will be used in a wide range of products, including mobile phones and other consumer electronics.

What are the key pillars of the new policy?

The policy focuses on fabrication, foundries, OSAT/assembly, R&D, design, talent development, and supply chain components.