SEMICON India 2026: Semiconductor Ecosystem, Semicon 2.0 & India

Subject: GS 03: Economy

Context: Prime Minister Narendra Modi inaugurated Semicon India 2026 at Yashobhoomi, New Delhi, on 17 September 2026.

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About SEMICON India 2026

• It is India’s flagship international semiconductor conference and exhibition, bringing together global semiconductor companies, fab operators, chip-design startups, academic institutions and policymakers.

• Organised by: India Semiconductor Mission (ISM), Ministry of Electronics and Information Technology (MeitY) and SEMI, the global industry association representing the electronics manufacturing and design supply chain.
• Theme: “Silicon to Systems: Building the Ecosystem.”
• Aim: To accelerate capital investment, promote global technology partnerships, strengthen domestic semiconductor design intellectual property (IP) and position India as a trusted and resilient global manufacturing destination across the electronics value chain.

Semicon India Programme

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.

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.

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What is a semiconductor?

• A semiconductor is a material whose electrical conductivity can be controlled. It sits between conductors (e.g., copper), which let current flow easily, and insulators, which strongly resist it.
• Semiconductor materials can be engineered to switch, amplify, sense or control electrical signals.
• A transistor is a microscopic electronic switch. An integrated circuit (IC), or chip, packs millions or billions of transistors and other components onto a small piece of semiconductor. Their coordinated switching enables computing, communication, sensing, memory and power management.
• Example: Smartphones, computers, medical equipment, automobiles, defence systems, satellites and data centres all depend on semiconductor components. This is why they are called the building blocks of modern electronics.

From silicon to chip: the manufacturing process

1. Raw material: Silicon is the most widely used semiconductor material. It is obtained from silica, which is abundant in sand.
2. Purification and ingots: Highly purified silicon is formed into cylindrical ingots.
3. Wafers: Ingots are sliced into thin discs called wafers and polished.
4. Fabrication (in a “fab”): Wafers go through hundreds of controlled processes, including:
   • Deposition: adding thin layers of material
   • Photolithography: transferring circuit patterns onto the wafer using light
   • Etching: removing material to carve out the patterns
   • Ion implantation: introducing impurities to alter electrical properties
5. The steps are repeated across multiple layers to build transistors, interconnects and other components.
6. ATMP/OSAT: Finished devices undergo Assembly, Testing, Marking and Packaging (ATMP), or Outsourced Semiconductor Assembly and Test (OSAT). Packaging protects the chip and lets it connect to other components. Testing ensures it meets performance and quality standards.

Why a Domestic Semiconductor Ecosystem Is Urgent for India?

1. Significant import dependence

• India imports almost all of the chips it uses. Between 90% and 95% of its chip consumption is imported.
• Global chip manufacturing is concentrated in a few countries. Taiwan, South Korea, Japan, China and the United States dominate it.
• Taiwan is the single biggest point of concentration. It accounts for over 60% of global chip production and nearly 90% of advanced chips.

2. National security risk

• India’s defence systems depend on semiconductors. UAVs, naval and airborne systems all use them.
• Heavy imports make this dependence a strategic weakness. With 90-95% of chips imported, these systems rely on foreign supply chains.
• Domestic capability would reduce this exposure. It strengthens national security and reduces vulnerabilities across strategic sectors.

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3. Drain on forex

• India spends a large amount of foreign exchange on chip imports. It spent USD 150 billion on them between FY17 and FY25.

4. Societal upliftment

• It also creates high-value jobs. At Semicon India 2026, the IT Minister announced a plan to train one lakh people for factories coming up in India, and Infineon reported a 28% increase in its India hiring.

News Source: The Hindu

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