India Launches ₹1,27,500-Crore Semicon 2.0 to Build Chip Ecosystem

The Government of India notified the Semicon 2.0 scheme on August 31, 2026, establishing a ₹1,27,500-crore ($13.4 billion) plan to build a comprehensive domestic semiconductor ecosystem. The initiative expands beyond manufacturing to include indigenous chip design, intellectual property, equipment, materials, advanced packaging, and research and development.

Fiscal support is tiered by sector, with silicon wafer fabs receiving 40% of eligible capital expenditure, while compound, display, and specialized fabs receive 35%. Advanced packaging facilities are eligible for 35% support, and conventional packaging receives 25%. Additionally, startups and small firms can receive seed funding for up to 50% of project costs, capped at 150 million rupees. The government will also provide up to 30% support for companies establishing plants to produce semiconductor equipment.

Union Minister Ashwini Vaishnaw announced the creation of a high-level expert panel, jointly chaired by the National Security Adviser and the Principal Scientific Adviser, to identify strategic chips across six categories: compute, memory, radio frequency, power, networking, and sensors. To support this infrastructure, the program aims to develop 100,000 additional semiconductor engineers to address a projected global workforce shortage.

This phase follows an initial 2021 effort that approved 12 manufacturing and nine packaging projects across six states. Three facilities have already entered commercial production in 2026. The government targets full self-sufficiency in chips within approximately six years, specifically aiming for domestic production to meet 100% of requirements for products such as sensors.