India’s semiconductor industry ready for next phase of growth: Ashwini Vaishnaw

India’s semiconductor push is entering its next phase, with the government seeking to expand beyond setting up fabrication and packaging facilities and build capabilities across the wider chip-making ecosystem.

Speaking on the sidelines of SEMICON India 2026 in New Delhi on Sep 17, Union Electronics and IT Minister Ashwini Vaishnaw said the foundation of the semiconductor industry had been laid in India and the focus now was on expanding it.

The government’s next phase, Semicon 2.0, is structured around six areas: chip design, semiconductor machines and materials, fabrication plants, assembly and packaging, research and development, and talent development.

The scheme has a total outlay of ₹1.275 lakh crore and was approved by the Union Cabinet in July.

Vaishnaw said the objective was to develop more parts of the semiconductor value chain within India, including materials, machinery, additional fabs, ATMP and OSAT facilities, chip design and talent.

From chip design to manufacturing

The first phase of the government’s semiconductor programme focused on establishing manufacturing capacity while supporting domestic chip design. Under Semicon 1.0, 12 semiconductor projects involving more than ₹1.64 lakh crore in investment were approved, according to government data.

Three of these projects have already started commercial production. They include facilities operated by Micron, Kaynes and CG Semi.

The government has also supported the design ecosystem. Vaishnaw said more than 105 startups participated in the first phase, with around 20 receiving venture capital funding of about ₹800 crore.

Semicon 2.0 is now seeking to widen that base. Vaishnaw said the government is targeting at least 200 startups and companies working on chip design in India. The new phase will also focus on equipment, materials, fabrication and advanced packaging rather than treating chip manufacturing as a standalone activity.

The talent component is also being expanded. After achieving its earlier target of developing 85,000 semiconductor engineers in four years against a 10-year timeline, the government is now looking to build another pool of skilled workers, including technicians, clean-room workers and factory-floor personnel. The new target is one lakh semiconductor talent.

Building the layers around the chip

The six pillars of Semicon 2.0 cover different stages of the semiconductor value chain.

The design pillar will support semiconductor intellectual property, chips, systems-on-chip and modules. The machines and materials component is intended to support the equipment, chemicals, gases and other inputs needed for semiconductor manufacturing.

Another pillar will support additional fabrication facilities, including silicon and compound semiconductor fabs, while the ATMP and OSAT component will expand assembly, testing and packaging capacity. The remaining pillars focus on advanced semiconductor research and development and workforce development.

Projects supported under the scheme will generally have a duration of up to six years, while the scheme will initially remain open for applications for three years. The India Semiconductor Mission will act as the nodal agency, handling applications, technical and financial assessments and implementation oversight. A mid-term assessment is planned after three years or earlier if required.

Global companies expand their India presence

The push comes as international semiconductor companies increase their participation in India's market.

At SEMICON India 2026, US semiconductor equipment maker Applied Materials announced plans to invest $5 billion in India over the next decade. The company said the investment would focus on research, supply-chain expansion and workforce development.

The three-day SEMICON India 2026 event in New Delhi has attracted more than 600 companies from 52 countries, according to MeitY Secretary S Krishnan. More than 300 of the participating exhibition companies are from overseas.

The scale of the event is considerably larger than the previous edition, with nearly 40,000 delegates registered, Krishnan said.

The government's semiconductor strategy is therefore moving beyond the question of how many fabs can be established in India. Semicon 2.0 places equal emphasis on the companies supplying those fabs, the technologies being designed domestically, the equipment and materials required for production, advanced packaging, research and the workforce needed to operate the industry.

India's first phase established semiconductor projects and commercial production. The second phase is designed to connect those pieces into a broader ecosystem covering design, manufacturing, packaging, research and talent.