Semicon India clears ten chip projects worth Rs 1.6 lakh crore

The government details its full semiconductor push as the Budget announces India Semiconductor Mission 2.0.

What happened

• The Ministry of Electronics and IT detailed the status of the Semicon India Programme — the umbrella effort to build a complete domestic semiconductor ecosystem covering design, fabrication, assembly, testing, marking and packaging (ATMP/OSAT) and display modules.
• Ten projects have been approved with investment commitments of about Rs 1.6 lakh crore, spread across Gujarat, Assam, Uttar Pradesh, Odisha, Punjab and Andhra Pradesh.
• Commercial production has begun at two plants — Micron and Kaynes — with two more expected to start this year, marking the first packaged chips rolling out of Indian units.
• The programme is executed through the India Semiconductor Mission (ISM), which is overseeing ten units under construction.
• The Union Budget 2026-27 announced India Semiconductor Mission 2.0 (ISM 2.0), widening the focus to equipment, materials, full-stack chip design, Indian intellectual property (IP) and supply chains.
• On the human-capital side, chip-design tools have been provided free to 315 universities, with 211 chips taped out by 75 institutions and 24 chip-design projects approved.

Background & context

A semiconductor — the silicon "chip" — is the basic building block of every electronic device, from mobile phones and laptops to cars, missiles, satellites and power grids. India consumes a very large volume of chips but has historically imported almost all of them, leaving a strategic and economic dependence on a handful of foreign foundries. The Semicon India Programme is the policy answer to that gap: launched in January 2022 by the Ministry of Electronics and IT, it is designed to seed every stage of the chip value chain on Indian soil rather than only one slice of it.

The programme sits within the broader "Make in India" / Atmanirbhar Bharat manufacturing thrust and is a sibling of the Production-Linked Incentive (PLI) schemes that incentivise electronics, mobile-phone and component manufacturing. Where the electronics PLI rewards assembly volumes, the Semicon India Programme targets the harder, more capital-intensive upstream — the fabrication plant (fab) that actually etches circuits onto silicon wafers, and the assembly-test-packaging units that turn finished wafers into usable chips. Its delivery arm, the India Semiconductor Mission (ISM), is an independent business division housed under the Digital India Corporation; it appraises proposals, disburses fiscal support and acts as the single nodal agency for the sector.

A key reform that made the current pipeline possible was the decision to offer uniform fiscal support of up to 50% of project cost across fabs, display fabs, compound-semiconductor units and ATMP/OSAT facilities, sharply de-risking the enormous capital outlays a fab demands. The releases now report the result of that policy: a clutch of marquee investments has moved from intent to construction and, in two cases, to commercial output.

It helps to read the chip value chain as a sequence, because the programme deliberately funds each link rather than one. First comes design — laying out the circuit using electronic-design-automation (EDA) software; this is where India already has deep talent and where the design-linked support and free university tools are aimed. Next is fabrication (the fab) — etching that design onto silicon wafers in an ultra-clean facility costing billions of dollars, the most capital-intensive and import-dependent link, addressed by the Tata-PSMC and CG Power lines. Then assembly, testing, marking and packaging (ATMP / OSAT) — slicing wafers into individual chips, wiring and sealing them, which Micron, Kaynes and the Tata Assam unit cover. Around these sit compound-semiconductor units (using materials such as silicon carbide for power and high-frequency uses, the SiCSem line) and advanced packaging (3D Glass Solutions). Reading the ten units against these links is exactly the kind of mapping a "match the pairs" question rewards.

For Prelims

• Full form & nature: Semicon India Programme — an umbrella programme (not a single scheme) for developing a sustainable semiconductor and display manufacturing ecosystem in India.
• Launch year: January 2022 · Nodal ministry: Ministry of Electronics and IT (MeitY).
• Delivery agency: India Semiconductor Mission (ISM), the nodal body that administers the programme.
• Headline numbers: 10 projects approved · ~Rs 1.6 lakh crore of investment commitments · production already begun at Micron and Kaynes · 10 units under construction.
• Talent pillar: chip-design tools (EDA) given free to 315 universities (over 200 lakh usage hours); 211 chips taped out by 75 institutions; 24 chip-design projects approved.
• International tie-ups: MoUs / partnerships with the United States, Japan, the European Union, Singapore and the Netherlands.
• Jobs: the wider electronics sector supports about 25 lakh jobs, of which roughly 12 lakh are in mobile-phone manufacturing (release figure).
• Companion scheme: Electronics Component Manufacturing Scheme (ECMS), which received 249 applications, targets the passive and active components that feed assembly lines.
• ISM 2.0: announced in Union Budget 2026-27; expands the mission to equipment, materials, full-stack design, Indian IP and resilient supply chains.

The ten approved units

The cleared projects span the full chain — wafer fabs, OSAT/ATMP packaging units, compound-semiconductor and advanced-packaging lines — and are anchored across several States, which is itself an exam-relevant pairing set.

What it is NOT

• It is not a single yojana with one beneficiary class — it is an umbrella programme with several distinct schemes underneath (fab support, display fab, compound semiconductor/ATMP, the Design Linked Incentive, and the companion ECMS).
• The India Semiconductor Mission (ISM) is the delivery agency, not the programme itself — examiners often swap the two; ISM administers, the Programme is the policy umbrella.
• It is not the same as the PLI for electronics. PLI rewards downstream assembly output; Semicon India funds upstream fabrication and packaging capacity. The two are siblings under Make in India, not duplicates.
• ISM 2.0 is not a fresh programme replacing the first — it is a Budget 2026-27 expansion of the same mission into equipment, materials, design IP and supply chains.
• "Commercial production has begun" applies only to two plants (Micron, Kaynes); the marquee Tata fab in Gujarat is under construction, not yet producing.

Why it matters

Chips are a chokepoint of modern strategic and economic power. A country that cannot fabricate or even package semiconductors is exposed every time global supply tightens — as the 2020-22 chip shortage showed when it stalled car and appliance production worldwide. Building domestic fabs and packaging lines reduces import dependence, shields critical sectors such as defence, telecom and automobiles, and captures more of the value that India today exports as raw demand. The shift from approvals to actual commercial output at two plants is the substantive marker here: it converts a policy promise into the first Made-in-India packaged chips.

The programme also addresses a quieter bottleneck — talent. Fabrication is capital-heavy, but the design layer is talent-heavy, and India's strength has long been in chip design rather than manufacturing. Seeding 315 universities with design tools, enabling 211 tape-outs and approving 24 design projects builds the engineering base that any sustainable ecosystem needs. ISM 2.0 deepens this by widening the mission from fabrication alone to the surrounding ecosystem — equipment, materials, full-stack design and home-grown IP — the parts that determine whether the gains endure once the initial subsidies taper.

How it compares

India's approach is best understood against the global wave of state-backed chip support. The United States enacted its own large semiconductor incentive package to re-shore fabs, and Taiwan, South Korea, Japan and the European Union each run substantial programmes to anchor or expand domestic capacity. India is a late entrant, which has two faces: it starts without an existing fab base, but it can target the fast-growing packaging and design segments where the entry cost is lower and where its engineering talent is already competitive. The strategic logic mirrors other "critical-technology" pushes — much as the country sought to localise solar-cell and battery manufacturing through dedicated incentives, the Semicon India Programme localises the most foundational hardware of the digital economy. The distinguishing design choice is the single-window mission (ISM) plus uniform 50% cost support, intended to make India a predictable destination for capital-intensive, long-gestation fab investments.

For Mains