In a bid to boost chip manufacturing ecosystem in the country, the government has notified Semicon 2.0 programme with an outlay of Rs 1.27 lakh crore, offering fiscal support across the semiconductor value chain, including 40 per cent funding for large silicon wafer fabs, as the country steps up efforts to attract global chipmakers and build a domestic design and manufacturing ecosystem. The programme provides central fiscal support of 40 per cent of eligible capital expenditure for silicon semiconductor wafer fabs, with a minimum investment threshold pegged at Rs 20,000 crore.
The scheme also offers incentives for chip design, advanced packaging, semiconductor equipment and materials, research and development and talent creation. India’s bold pitch to woo global investors and foster startups working on cutting-edge chip design comes at a time when semiconductors have emerged as a critical strategic resource globally, with the AI boom driving unprecedented demand for advanced chips and memory. At the same time, growing concerns over supply-chain vulnerabilities and shifting geopolitics have pushed global players to expand semiconductor capacities and reduce dependence on concentrated production hubs.
The programme was approved by the Union Cabinet in July 2026. Semicon 2.0 covers six pillars and 10 categories in all, spanning chip design, semiconductor equipment and materials, fabrication, packaging, research and development, and talent creation.
