Semiconductor manufacturing gets a ₹1.2L crore boost in India
What's the story
The Indian government is gearing up to give a major push to its semiconductor sector, with the Finance Ministry approving an allocation of ₹1.2 lakh crore for the second phase of the India Semiconductor Mission (ISM 2.0). The proposal is likely to be taken to the Union Cabinet for final approval around mid-April. Unlike its predecessor, ISM 2.0 will focus more on strengthening core capabilities within India's semiconductor ecosystem, and promote research and development (R&D), chip design, and innovation.
Strategic shift
ISM 2.0 will focus on advanced semiconductor nodes
The second phase of the ISM 2.0 will mark a departure from the manufacturing-centric incentives of its predecessor. Instead, it will adopt a more comprehensive, value chain-led approach. A major aspect of this new phase is likely to be incentives for developing advanced semiconductor nodes such as 3nm and 2nm technologies, bringing India closer to global standards in chipmaking.
Phase
Proposed outlay for ISM 2.0
The proposed outlay for ISM 2.0 is more than double that of the first phase, which had a budget of ₹76,000 crore. Under this initial phase, the government approved 10 projects with total investments estimated at ₹1.6 lakh crore. This new push also builds on India's $10 billion incentive program launched in 2021 to cover up to half of project costs and catalyze initial investments in semiconductor manufacturing.
Sector growth
Semiconductor push leading to major investments
The semiconductor push has already resulted in major investments such as US-based Micron Technology's semiconductor assembly facility in Gujarat and Tata Group's semiconductor fabrication plant. Foxconn also has plans for a semiconductor test and assembly unit under the incentive scheme. Meanwhile, Kaynes Technology has started production at its ₹3,300 crore facility in Sanand, Gujarat. These developments show early but significant progress toward making India a global hub for electronics and semiconductors manufacturing.