Semicon 2.0: India’s ₹1.28 Lakh Crore Semiconductor Push

Subject: GS 03: Economy

Context: Recently, MeitY notified Semicon 2.0 with an outlay of ₹1.28 lakh crore, shifting emphasis from initial capacity creation towards deeper semiconductor ecosystem development.

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About Semicon 2.0

• Semicon 2.0 is the second phase of the India Semiconductor Mission (ISM).
• Objective: Strengthening the entire semiconductor value chain, including design, machinery, materials, fabrication, packaging, R&D and skilled talent.
• Nodal Ministry: The Ministry of Electronics and Information Technology (MeitY) is the nodal ministry, while the India Semiconductor Mission (ISM) serves as the operational agency.
• Budget Outlay: ₹1,27,500 crore (about ₹1.28 lakh crore).
• Implementation Period: Applications will initially remain open for three years, while approved projects may have an implementation period of up to six years.
• Six Key Pillars
  • Chip Design: Promotes indigenous semiconductor IP, strategic chips and Indian-owned chip architectures through grants, equity co-investment and royalty financing.
  • Machines & Materials: Supports domestic production of semiconductor machinery, precision equipment, specialty chemicals and high-purity gases.
  • More Fabs: Provides up to 40% capital support for silicon fabs and support for compound, photonics, sensor and display fabs.
  • ATMP/OSAT: Fortifying Assembly, Testing, Marking, and Packaging (ATMP) alongside Outsourced Semiconductor Assembly and Test (OSAT) units using advanced packaging.
  • R&D: Provides support of up to 75% of project cost for advanced semiconductor technologies and research.
  • Talent Development: Expands specialised semiconductor training, clean-room exposure and access to EDA tools.

About Semicon 1.0

• Semicon 1.0 was the foundational initiative to establish a globally competitive semiconductor and display manufacturing ecosystem in India.
• Origin: The India Semiconductor Mission was launched in December 2021 as a mission-led initiative under the Digital India Corporation.
• Implementation Period: It was designed for 2021–2026, with a fiscal outlay of ₹76,000 crore.
• Key Achievements
  • 12 semiconductor manufacturing units received approval, involving over ₹1.64 lakh crore in committed investment.
  • Commercial production commenced at facilities associated with Micron, Kaynes and CG Semi.
  • 24 semiconductor design projects received financial support, while 105 startups received access to EDA software.
  • 315 universities were equipped with chip-design infrastructure, supporting training of about 68,000 engineering students.

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