New Delhi, 31st August 2026: India Cellular and Electronics Association (ICEA) today welcomed notification of Semicon 2.0, with an outlay of ₹1,27,500 crore, as a decisive next phase in India’s semiconductor journey. The Scheme is designed to attract investments of around ₹4 lakh crore and enable semiconductor production of about ₹2 lakh crore over the scheme period, while building depth across design, manufacturing, supply chains and talent.
Building on the India Semiconductor Mission (ISM) 1.0 under which 12 manufacturing units with cumulative investments of more than ₹1.64 lakh crore have been approved, Semicon 2.0 shifts the emphasis from creating capacity to creating capability. Commercial production has already begun at three units in 2026, with two more expected this year. Design activity is also gathering pace, with applications for EDA tools, approved design projects and growing venture funding into Indian design companies.
The scheme rests on six pillars: design of chips; machines and materials; additional fabs; further strengthening of the ATMP/OSAT industry; research and development; and talent development. Fiscal support is comprehensive and covers the full value chain. Silicon fabs will receive 40 per cent of capex on a pari-passu basis; display, compound semiconductor and advanced packaging units 35 per cent; conventional ATMP/OSAT 25 per cent; and semiconductor equipment, chemicals, gases and materials 30 per cent. Design support for Indian-owned companies and start-ups includes grants with equity co-investment for start-ups and MSMEs, and royalty financing or equity co-investment for larger firms. R&D in advanced nodes, silicon photonics, micro-LED/OLED and advanced packaging, together with talent development, can receive combined Centre and State support of up to 75 per cent. The talent pillar targets training of one lakh design engineers in five years, alongside manufacturing skills in fabrication, packaging, equipment and materials.
Welcoming the announcement, Mr. Pankaj Mohindroo, Chairman, ICEA, said:
“We commend the Government of India, MeitY and ISM for this prescient continuation of semiconductor policy. ISM 1.0 has been pivotal in translating India’s semiconductor aspirations into a tangible manufacturing ecosystem.
Semicon 2.0 builds on Semicon India 1.0’s foundation with a pronounced emphasis on design, R&D, capital goods, the entire supply chain and skill development. The Government has now placed on the table support for entire supply chain: for fabs, packaging, machines and materials, Indian-owned intellectual property, research and talent.
Government’s focus on developing domestic design and R&D will pave the way for long-term and sustained growth of the industry. Design is where value, intellectual property and strategic control reside. Building Indian-owned chip-design capability, including for AI compute, will allow companies to move higher up the value chain, retain a larger share of global electronics and generate growth that is recurring and durablenot dependent on a single manufacturing cycle.
India now has a singular opportunity to emerge as a semiconductor superpower: self-reliant, resilient to global supply-chain shocks, and possessed of strategic sovereignty in a technology that underpins national security and economic strength. Design, including AI compute and Indian-owned intellectual property, must advance together with manufacturing and the wider supply chain. States that move first will lock in a first-mover advantage by attracting the ecosystem as a whole: fabs, packaging, suppliers, design houses and talent and not a standalone plant. ICEA and its members stand ready to work with the Government to ensure that Semicon 2.0 delivers depth, resilience and sovereignty, not merely capacity.
That policy certainty must now be matched by industry action. Companies, investors, start-ups and States should move with speed to convert this framework into projects, products and globally relevant intellectual property.”
We believe that Semicon 2.0 must now be read as a destination, not only a scheme. India should aim to nurture 100 fabless companies in this phase and over the longer horizon, build a base of around 500 semiconductor design firms that own their IP. The prize is not another assembly line but US$50 billion of indigenously designed semiconductor product value, a million high-quality jobs, and the capability to design and source chips for the bulk of India’s own strategic and commercial demand. If design, AI compute and Indian-owned IP move first and manufacturing, packaging and materials follow, India can become a semiconductor superpower that is not a tenant in someone else’s value chain.
As part of continuous work to deepen India’s semiconductor ecosystem, ICEA in March 2026 constituted two dedicated verticals to drive focused engagement and industry leadership: the Semiconductor Leadership Forum, chaired by Dr. Randhir Thakur, CEO & Managing Director, Tata Electronics Pvt. Ltd. and the Semiconductor Product Design Forum, chaired by Dr. Sandeep Kumar, CEO, L&T Semiconductor Technologies. These platforms will work with members, States and the Centre to convert the design, manufacturing and talent agenda of Semicon India 2.0 into Indian-owned products, IP and globally competitive companies.
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