Govt Approves Second Leg of Chip Manufacturing Program with Semicon 2.0

The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the Semicon 2.0 program to expand the development of the domestic semiconductor design and manufacturing ecosystem. The policy refresh carries an aggregate budgetary allocation of ₹127,500 crore, building upon the initial industrial momentum generated during the first iteration of the national chip initiative.

The government said in a release that the renewed policy architecture distributes the capital allocation across six primary industrial areas. The first section targets semiconductor design, shifting parameters from initial prototyping to the creation of strategic commercial intellectual property and systems. The second and third sections introduce production incentives for firms manufacturing specialized capital equipment, chemicals, and industrial gases, while simultaneously trying to attract global silicon, compound semiconductor, and discrete component fabrication plants to the country ahead of the first facility commissioning scheduled for 2028.

The legislative update follows the administrative closing of the initial version of the India Semiconductor Mission, which approved 12 production facilities drawing a cumulative investment of over 1.64 lakh crore rupees. The early industrial approvals include one silicon fabrication plant, a silicon carbide facility, a specialized micro-LED display unit, and nine packaging facilities designed to supply components across the automotive, telecommunications, and aerospace industries.