Semicon 2.0 Gets Cabinet Nod with ₹1.27 Lakh Crore Outlay

• Union Cabinet approves Semicon 2.0 with an outlay of ₹1.27 lakh crore.
• Six-pillar strategy to boost semiconductor design and manufacturing.
• Focus on fabs, advanced packaging, R&D and skilled workforce.
• Scheme to build on the progress achieved under Semicon 1.0.

GG News Bureau
New Delhi, 15th July: The Union Cabinet, chaired by Prime Minister Narendra Modi, on Wednesday approved Semicon 2.0 with a total budget outlay of ₹1,27,500 crore to accelerate the development of India’s semiconductor design and manufacturing ecosystem and strengthen the country’s position in the global chip industry.

The new initiative builds on the momentum created under Semicon 1.0 and aims to provide long-term policy support for developing a complete semiconductor ecosystem in the country.

The government said Semicon 2.0 is based on a six-pillar strategy covering semiconductor design, manufacturing of machines and materials, establishment of new fabrication units (fabs), expansion of Assembly, Testing, Marking and Packaging (ATMP/OSAT) facilities, research and development, and talent development.

Under the design pillar, the scheme will focus on developing indigenous intellectual property, advanced chip designs and system-level innovations. With 105 startups already engaged in chip design, the government aims to position India as a global hub for semiconductor design and intellectual property.

The scheme will also provide incentives for manufacturing semiconductor equipment, specialty materials, chemicals and gases required for chip fabrication, strengthening domestic supply chains and precision manufacturing capabilities.

To expand manufacturing capacity, the government will encourage additional investments in silicon fabs, compound semiconductor fabs, display fabs and discrete component manufacturing facilities, while further promoting advanced ATMP and OSAT units to attract global players.

Research and development will focus on advanced semiconductor technologies beyond the current 28nm to 110nm nodes, in collaboration with leading domestic and international research institutions.

The talent development component will expand semiconductor education and industry-linked training. So far, 315 universities have trained nearly 68,000 students in advanced chip design using Electronic Design Automation (EDA) tools, and the programme will now deepen industry participation in clean-room operations, fabrication and ecosystem development.

The Cabinet also reviewed the progress under Semicon 1.0, under which 12 manufacturing projects with cumulative investments exceeding ₹1.64 lakh crore have been approved. These include one silicon fabrication plant, one silicon carbide fab, one integrated gallium nitride Micro LED display fab and nine semiconductor packaging units.

Of these approved projects, Micron, Kaynes and CG Semi have already commenced commercial production, while another unit is expected to begin operations in 2026.

In the design segment, 24 semiconductor design projects have received financial support, while 105 startups and MSMEs have been provided access to industry-standard EDA tools for developing chips for sectors such as telecommunications, artificial intelligence, drones, IoT devices, defence, smart meters and satellite communications.

The government said Semicon 2.0 will enhance economic growth, strengthen supply-chain resilience, improve technological self-reliance and reinforce India’s ambitions of becoming a global semiconductor manufacturing and innovation hub.