Cabinet Approves Semicon 2.0

Why in News?

The Union Cabinet approved the Semicon 2.0 programme. Building upon the momentum of the first phase, it aims to establish a comprehensive ecosystem from design to advanced packaging solidifying India’s position as a trusted global hub in electronics and semiconductor manufacturing.  

Source: PIB  

What is Semicon 2.0?

• About: Building upon the foundation laid by the India Semiconductor Mission (ISM) 1.0 (launched in 2021), Semicon 2.0 marks India’s shift from ecosystem creation to ecosystem deepening. 
• Financial Outlay: Rs 1,27,500 crore to holistically build the semiconductor ecosystem. 
• Six Key Pillars: The programme focuses on expanding capabilities across the entire value chain: 
  • Design of Chips: Supporting semiconductor intellectual property (IP) and design startups to position India as a leading fabless design nation. 
  • Machines and Materials: Incentivising domestic manufacturing and R&D of semiconductor equipment, specialty chemicals, industrial gases, and critical materials to build a resilient supply chain. 
  • Setting up more Fabs: Encouraging capital-intensive investments in silicon fabs, compound semiconductor fabs, discrete component fabs, and display fabs, with India’s first semiconductor fab expected to be commissioned in 2028.  
  • Strengthening ATMP/OSAT: Fortifying the Assembly, Testing, Marking, and Packaging (ATMP) and Outsourced Semiconductor Assembly and Test (OSAT) industry through advanced packaging technologies. 
  • Research & Development (R&D): Fostering collaboration with top global research institutions to move beyond existing technology nodes into frontier areas like AI-native chip design. 
  • Talent Development: Training industry-ready talent. Currently, 315 universities are using advanced Electronic Design Automation (EDA) tools to train around 68,000 students. 

What is the Current Status of India’s Electronics and Semiconductor Ecosystem? 

• Growth in Electronics Manufacturing: Over the last eleven years, electronics production has grown 7-fold, and exports 11-fold. India is now the world’s second-largest mobile phone manufacturer. 
• Inclusive Job Creation: The rapid expansion of the electronics manufacturing ecosystem has generated approximately 25 lakh jobs over the last decade. 
  • Women constitute around 30% of the electronics manufacturing workforce and an impressive 70% of the direct workforce in mobile manufacturing, underscoring safe workplaces and inclusive growth. 
• Success of ISM 1.0: Since December 2021, the government has approved 12 semiconductor projects across six states, with cumulative investments exceeding Rs 1.64 lakh crore. Commercial production has already begun at major OSAT/ATMP facilities. 
  • Semicon India Programme (Semicon 1.0) launched in 2021 with an outlay of Rs 76,000 crore, the programme aims to establish a domestic semiconductor and display manufacturing ecosystem through support for Semiconductor Fabs, Display Fabs, Compound Semiconductor/ATMP/OSAT facilities, and the Design Linked Incentive (DLI) Scheme.  
• Design and Innovation: 24 semiconductor design projects from startups and MSMEs received financial support, designing System-on-Chips (SoCs) for critical applications including satellite communications, drones, and AI systems. 
• Future Targets: Through Semicon 2.0, India aims to achieve 3-nanometre and 2-nanometre technology nodes and targets a domestic semiconductor market worth USD 200 billion by 2035. 

Why is a Comprehensive Semiconductor Ecosystem Crucial for India? 

• Geostrategic imperative: The US–China chip conflicts has shown that semiconductors are strategic assets. Building capabilities across design, fabrication, packaging, and materials reduces India’s dependence on external powers and strengthens strategic autonomy. 
• National security: Indigenous chips minimise risks of hardware trojans and supply-chain manipulation in defence systems, ISRO missions, power grids, telecom networks, and other Critical Information Infrastructure (CII). 
• Economic competitiveness: Electronics constitute India’s second-largest import bill after crude oil.  
  • Domestic semiconductor manufacturing can reduce import dependence, lower pressure on the Current Account Deficit (CAD), and capture higher value through chip design and fabrication instead of only assembly. 
• Industrial transformation: Semiconductors are the backbone of electric vehicles, consumer electronics, 5G/6G telecom, AI hardware, medical devices, industrial automation, and aerospace.  
  • A domestic ecosystem strengthens the entire manufacturing value chain and complements the PLI-led manufacturing push. 
• Technological leadership: Although India possesses nearly 20% of the world’s semiconductor design talent, it lacks advanced manufacturing capabilities.  
  • A complete ecosystem bridges this gap and supports frontier technologies such as AI, Quantum Computing, IoT, and High-Performance Computing (HPC). 
• Supply chain resilience: Localising semiconductor equipment, specialty chemicals, industrial gases, and critical minerals reduces exposure to global disruptions and dependence on countries dominating semiconductor supply chains, particularly China. 
• Technology diplomacy: Becoming a trusted semiconductor hub strengthens India’s partnerships under initiatives such as the India–US iCET, the Quad, and collaborations with Japan, the Netherlands, Germany, Singapore, and the EU, enhancing India’s role in global technology governance. 

Conclusion 

Semicon India Programme 2.0 marks India’s transition from an electronics manufacturing hub to a complete semiconductor ecosystem spanning design, fabrication, packaging, R&D, and talent. By strengthening technological self-reliance, resilient supply chains, and high-value manufacturing, it lays the foundation for Viksit Bharat and positions India as a trusted global semiconductor hub. 

Source: PIB