Semicon 2.0: India’s Ambitious Leap into Semiconductor Design and Manufacturing

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Dated: 01.09.2026

Semicon 2.0: India’s Ambitious Leap into Semiconductor Design and Manufacturing

India has launched the Semicon 2.0 scheme to transform itself into a global powerhouse for semiconductor design and manufacturing. Building on the momentum of the National Policy on Electronics 2019 (NPE 2019) and the first Semicon India Programme, this initiative aims to create a robust, self-reliant, and globally competitive semiconductor ecosystem. Here’s a comprehensive look at the scheme, its pillars, incentives, and what it means for the industry.

Vision and Objectives

Semicon 2.0 is designed to:

Establish India as a global hub for Electronics System Design and Manufacturing (ESDM).
Build a self-reliant semiconductor chip design and manufacturing ecosystem.
Support economic growth, strengthen national security, and establish technological leadership.

The Six Pillars of Semicon 2.0

1. Design

Category 1: Focuses on designing semiconductor IPs, chips, SoCs, and modules for national importance and strategic priorities.
- Eligibility: Indian-owned companies, with options for consortiums including global partners.
- Support: Long-term upgrades, co-ownership of IP with CDAC, and competitive RfP-based selection.
Category 2: Targets commercial sector chip design, fostering innovation and IP creation.
- Eligibility: Indian and OCI-owned companies, including startups and MSMEs.
- Support: Access to national EDA tools, MPW fabrication, seed funding (up to ₹15 crore), equity co-investment, and royalty financing.
Category 3: Deployment-linked incentives for first-time product launches.
- Support: 9% reimbursement on net sales for five years (up to ₹30 crore per application).

2. Machines and Materials

Supports R&D and manufacturing facilities for semiconductor equipment, raw materials, and test facilities.
- Fiscal Support: 30% of capital expenditure, with additional Production Linked Incentives (PLI) for domestic sourcing.

3. Setting Up More Fabs

Category 5: Silicon Semiconductor Wafer Fabs
- Eligibility: Minimum ₹20,000 crore investment, ₹7,500 crore revenue threshold.
- Support: 40% of eligible capital expenditure.
Category 6: Compound Semiconductors, Photonics, Sensors, Discrete Fabs
- Eligibility: Minimum ₹500 crore investment, ₹200 crore revenue threshold.
- Support: 35% of eligible capital expenditure.
Category 7: Display Fabs (OLED, Micro LED, LCD)
- Eligibility: High-capacity, high-investment projects.
- Support: 35% of eligible capital expenditure.

4. ATMP/OSAT Industry

Supports advanced and legacy packaging facilities.
- Support: 35% (advanced) and 25% (legacy) of eligible capital expenditure.

5. Research and Development

Strengthens R&D in advanced semiconductor and display technologies.
- Support: Up to 75% of project cost (including state incentives).

6. Talent Development

Develops a multi-tiered talent ecosystem across design, fabrication, and packaging.
- Support: Up to 75% of project cost for training and capacity building.

Application and Approval Process

Application Window: Open for three years via the Nodal Agency portal.
Nodal Agency: India Semiconductor Mission (ISM) manages applications, evaluations, and disbursements.
Approval: Projects are approved based on cost thresholds by the Secretary, Minister, or Cabinet.
Disbursement: Fiscal support is released as per approved terms.

Impact and Future Prospects

Mid-term Appraisal: Schemes will be reviewed after three years to assess impact and make necessary adjustments.
Innovation Awards: ISM may announce deep tech awards to promote innovation from 2026.

Why Semicon 2.0 Matters

Semicon 2.0 is a strategic move to secure India’s place in the global semiconductor value chain. By offering comprehensive fiscal support, fostering innovation, and building talent, the scheme aims to:

Reduce import dependence and enhance supply chain resilience.
Attract global investments and partnerships.
Enable India to compete in critical and emerging technology sectors.

India’s Semicon 2.0 scheme is set to be a game-changer, positioning the country as a leader in the semiconductor industry and driving technological and economic growth for years to come.

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