The government on Monday notified the Semicon 2.0 scheme with an outlay of Rs 1.27 lakh crore to strengthen and expand India’s semiconductor manufacturing and design ecosystem, with fiscal support planned across the industry’s entire value chain.
The scheme has been structured around six pillars covering semiconductor design, manufacturing equipment and materials, fabrication units, chip assembly and packaging, research and development, and talent development.
According to the government notification, Semicon 2.0 seeks to provide sustained policy support to the semiconductor sector and accelerate the development of a comprehensive design and manufacturing ecosystem in the country.
Focus on the Entire Semiconductor Value Chain
The scheme is designed to extend support beyond semiconductor fabrication and build capabilities across the wider chip ecosystem.
It covers areas including semiconductor design by Indian companies, manufacturing of capital equipment required for chip production, semiconductor fabrication facilities and chip assembly, testing, marking and packaging.
The initiative also includes support for research into advanced semiconductor technologies and development of skilled talent for the industry.
High-Level Panel to Identify Strategic Chips
Union Minister for Electronics and Information Technology Ashwini Vaishnaw said the government will constitute a high-level expert panel to identify strategic semiconductor chips that will qualify for incentives under Semicon 2.0.
The committee will be jointly chaired by the Principal Scientific Adviser and the National Security Adviser and will identify semiconductor products based on their national importance and strategic priorities, Vaishnaw said while speaking to reporters.
The move is aimed at ensuring that support under the scheme is directed towards semiconductor products considered strategically important for the country.
Reducing Dependence on Overseas Supplies
The government’s semiconductor push is not limited to creating manufacturing capacity but also seeks to build domestic capabilities across different stages of the value chain.
Vaishnaw said Semicon 2.0 is expected to help reduce India’s dependence on overseas supplies for several semiconductor-dependent products.
Asked about areas where India could eventually meet domestic demand, the Minister said the initiative aims to enable products such as sensors to meet up to 100 per cent of domestic requirements.
Strengthening Domestic Design Capabilities
A key objective of Semicon 2.0 is to encourage greater participation by Indian companies in semiconductor design while supporting manufacturing and downstream activities.
The scheme seeks to support facilities involved in fabrication, packaging and testing, along with the production of specialised equipment required by the semiconductor industry.
This approach is intended to help India develop capabilities across the semiconductor value chain rather than relying on a limited number of segments.
Semiconductor Sector Gains Strategic Importance
The notification comes as India seeks to build a globally competitive semiconductor ecosystem and strengthen domestic capabilities in a sector considered critical to a wide range of industries.
Semiconductors are integral to electronics, automobiles, telecommunications, defence and several other strategic and technology-intensive sectors.
By providing fiscal support across design, manufacturing, packaging, equipment, research and talent development, Semicon 2.0 aims to create a broader ecosystem capable of supporting India’s growing demand for semiconductor technologies.
