NEW DELHI: In a major push to India's semiconductor ambitions, the Union Cabinet has approved an outlay of Rs 1.27 lakh crore for the second phase of the India Semiconductor Mission (Semicon India 2.0). The approved allocation is significantly higher than the Rs 76,000 crore earmarked under the first phase of the India Semiconductor Mission, which was launched to attract semiconductor manufacturers to establish facilities in India.
Union Minister for Electronics and Information Technology Ashwini Vaishnaw said that, under Semicon India 2.0, incentives will be provided on a pari-passu basis, with government support released in proportion to the investments made by companies.
The government expects the programme to catalyse investments of around Rs 4 lakh crore, generate semiconductor and electronics production worth Rs 2 lakh crore, and boost exports by approximately Rs 1 lakh crore over the coming years.
Vaishnaw said the programme is built around six key pillars: support for strategic and commercial chip design through grants, equity co-investment or royalty-based funding; a 30% incentive for manufacturing semiconductor equipment, chemicals, gases and materials; 40% support for silicon fabs and 35% for display and compound semiconductor fabs; 35% incentives for advanced packaging facilities and 25% for conventional ATMP/OSAT units; up to 75% funding, with support from the Centre and states, for semiconductor research and development; and up to 75% assistance for talent development in chip design and manufacturing.
The India Semiconductor Mission was launched in December 2021 with the objective of making India a global semiconductor hub. The programme aims to attract investments across semiconductor fabrication, chip packaging, compound semiconductors, display manufacturing and chip design.
Since its launch, the government has approved 12 semiconductor projects across Gujarat, Assam, Andhra Pradesh, Uttar Pradesh and Odisha, with a cumulative investment of around Rs 1.64 lakh crore. These include Tata Electronics' semiconductor fabrication facility in Dholera, Tata Semiconductor Assembly and Test's ATMP plant in Assam, Micron Technology's semiconductor packaging facility in Gujarat, and additional packaging projects by CG Power and the CG Power–Renesas joint venture.
So far, three semiconductor facilities have commenced commercial production. The first was Micron Technology's $2.75 billion assembly, testing, marking and packaging (ATMP) plant in Sanand, Gujarat, which was inaugurated on February 28, 2026. This facility currently manufactures DRAM and NAND flash memory products for mobile devices, data centres and automotive applications.
The second operational unit is Kaynes Semicon's OSAT facility in Sanand, which began commercial production in March 2026. The third is CG Semi's Outsourced Semiconductor Assembly and Test (OSAT) facility in Sanand, Gujarat, which has also commenced commercial production.
