India is expanding its semiconductor strategy with the launch of Semicon India Programme 2.0, broadening its focus from chip manufacturing to developing a complete semiconductor ecosystem. The new phase aims to strengthen every stage of the value chain, including chip design, fabrication, advanced packaging, research, equipment, materials, and workforce development.
The initiative builds on the progress made under the original Semicon India Programme, launched in 2021 with a financial outlay of ₹76,000 crore. According to the government, India now aims to develop a domestic semiconductor market worth $200 billion by 2035 while increasing technological self-reliance, creating high-value jobs, and strengthening its position in global electronics manufacturing.
Key Highlights
- India is targeting a $200 billion domestic semiconductor market by 2035 through the Semicon India Programme 2.0.
- Twelve semiconductor projects have been approved across six states, with three facilities already in commercial production.
- The original Semicon India Programme, approved in December 2021, has an outlay of ₹76,000 crore.
- The new programme expands support beyond chip manufacturing to include design, equipment, materials, packaging, research, and talent development.
- India accounts for nearly 20% of the world’s semiconductor design talent, while government-backed design and skilling programmes continue to expand.
- Partnerships with several countries and global technology companies are supporting the growth of India’s semiconductor ecosystem.
Read: Semicon 2.0 India: Cabinet Approves ₹1.27 Lakh Crore Semiconductor Plan
Electronics Manufacturing Growth Supports Semiconductor Expansion
India’s semiconductor ambitions are built on the rapid expansion of its electronics manufacturing sector over the past decade. Government initiatives such as the National Policy on Electronics, SPECS, EMC 2.0, the Production Linked Incentive (PLI) Scheme, and the Electronics Components Manufacturing Scheme (ECMS) have helped strengthen the country’s Electronics System Design and Manufacturing (ESDM) ecosystem.
According to the government, over the last eleven years:
- Electronics production has increased sevenfold.
- Electronics exports have grown elevenfold.
- Mobile phone production has increased thirty-two-fold.
- Mobile phone exports have expanded 165-fold.
India is now the world’s second-largest mobile phone manufacturer, providing a strong industrial base for semiconductor manufacturing.
The electronics manufacturing ecosystem has also created around 25 lakh jobs over the past decade. Women account for approximately 30% of the electronics manufacturing workforce, while they represent around 70% of the direct workforce in mobile phone manufacturing.
Semiconductor Manufacturing Gains Momentum
The Semicon India Programme, launched in December 2021, was introduced after global semiconductor shortages during the COVID-19 pandemic highlighted the need for stronger and more resilient supply chains.
Rather than focusing only on semiconductor fabrication, the programme supports the complete ecosystem required for chip manufacturing, including testing, packaging, specialty chemicals, industrial gases, equipment, logistics, and skilled manpower.
Under the programme, the government has approved 12 semiconductor manufacturing projects across Gujarat, Uttar Pradesh, Punjab, Assam, Odisha, and Andhra Pradesh. These projects include:
- One Silicon Fab
- One Compound Semiconductor Fab with Packaging
- One Micro LED Display GaN Fab with Packaging
- Nine Assembly, Testing, Marking, and Packaging (ATMP/OSAT) facilities
Three facilities, Micron ATMP, Kaynes Semicon, and CG Power OSAT, have already started commercial production. Two additional facilities are expected to begin production before the end of the year, further expanding India’s manufacturing capacity.
Focus on Chip Design, Research, and Skilled Workforce
Alongside manufacturing, the government continues to strengthen India’s semiconductor design capabilities. India currently has nearly one-fifth of the world’s semiconductor design talent, making design an important part of the country’s semiconductor strategy.
Under the Design Linked Incentive (DLI) Scheme:
- 103 applications for Electronic Design Automation (EDA) tools have been approved.
- 24 chip design projects have received approval.
- 15 companies have obtained venture capital support.
Students have also designed and fabricated 175 semiconductor chips for applications in sectors such as automotive, healthcare, telecommunications, artificial intelligence and satellite communications.
To support future workforce requirements, the Chips to Startup (C2S) programme has introduced EDA tools in 320 academic institutions, training more than 68,000 students. In addition, a dedicated semiconductor curriculum has been adopted by over 500 engineering colleges.
Semicon India 2.0 Broadens the Semiconductor Value Chain
The second phase of the programme expands government support beyond manufacturing facilities to develop a more comprehensive semiconductor ecosystem.
Semicon India Programme 2.0 is built around six strategic pillars: Chip design, semiconductor equipment and materials, fabrication facilities, advanced packaging, research and development, and talent development.
As more manufacturing plants become operational, demand for semiconductor-grade materials, equipment, and specialised services is expected to increase. This could create new opportunities for domestic manufacturers, including MSMEs, while helping Indian companies participate more actively in global semiconductor supply chains.
The government is also working with state governments that have introduced dedicated semiconductor policies offering investment incentives. International cooperation with countries including the United States, Japan, Singapore, the Netherlands, Germany, and the European Union is supporting technology partnerships and ecosystem development. Several global technology companies, including Applied Materials, AMD, Lam Research, KLA, and Microchip Technology, have also announced investments or collaborations in India.
India’s semiconductor strategy reflects a broader effort to move beyond electronics assembly and develop capabilities across the entire semiconductor value chain. With global demand for chips expected to grow over the coming years, the government aims to strengthen domestic manufacturing, research, innovation, and skilled talent while improving India’s role in global semiconductor supply chains.
Source: Ministry of Electronics & IT
