Cabinet Approves INR 1.27 Lakh Crore Semicon 2.0 to Boost India's Semiconductor Ecosystem
The Union Cabinet has approved the Semicon 2.0 programme with a total outlay of INR 1,27,500 crore to strengthen India's semiconductor design and manufacturing ecosystem through long-term policy support.
July 16, 2026. By Mrinmoy Dey
Building on the momentum of the India Semiconductor Mission (ISM) under Semicon 1.0, the new programme aims to position India as a global semiconductor hub by supporting the entire value chain – from chip design and manufacturing to research, advanced packaging, materials, equipment and talent development.
Semicon 2.0 is structured around six key pillars. These include strengthening semiconductor design capabilities by supporting the development of intellectual property (IP), chip designs and system-level products; incentivising the manufacturing and R&D of semiconductor equipment, materials, chemicals and gases; encouraging the establishment of additional semiconductor fabrication plants, including silicon, compound semiconductor, discrete component and display fabs; expanding the country's Assembly, Testing, Marking and Packaging (ATMP)/Outsourced Semiconductor Assembly and Test (OSAT) ecosystem with advanced technologies; promoting research and development for next-generation semiconductor nodes and technologies; and enhancing industry-focused talent development through university programmes and specialised training.
According to the government, 105 startups are already engaged in chip development, while 315 universities have adopted industry-standard Electronic Design Automation (EDA) tools, enabling the training of around 68,000 students. Semicon 2.0 will further deepen these initiatives by strengthening collaboration between academia and industry.
The government also highlighted the progress achieved under Semicon 1.0. A total of 12 semiconductor manufacturing projects, involving cumulative investments exceeding INR 1.64 lakh crore, have been approved. These include one silicon fab, one silicon carbide fab, one integrated gallium nitride Micro LED display fab, and nine packaging units serving sectors such as consumer electronics, automotive, industrial electronics, telecommunications, aerospace and power electronics.
Among the approved projects, Micron, Kaynes and CG Semi have already commenced commercial production, while another manufacturing unit is expected to begin operations during 2026.
On the design front, 24 semiconductor design projects from startups and MSMEs have received financial support, while 105 startups and MSMEs have been granted access to industry-standard EDA tools. These companies are developing chips and systems-on-chip (SoCs) for applications including satellite communications, drones, surveillance systems, IoT devices, AI, telecom equipment and smart meters.
The government stated that Semicon 2.0 is expected to drive economic growth across sectors, enhance supply chain resilience, strengthen national security and establish India's technological leadership in critical semiconductor technologies by fostering an integrated domestic ecosystem.
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