India’s Union Cabinet, chaired by Prime Minister Narendra Modi, has approved a total budget outlay of Rs.1,27,500 crore (~US$ 13.23 billion) for the Semicon 2.0 scheme which aims to develop India’s semiconductor design and manufacturing ecosystem.
“Recognising the requirement for a sustained and long-term support to the Semiconductor sector in India and also to build on the momentum generated under Semicon1.0, Semicon 2.0 aims to further the Government’s commitment towards putting our country on the semiconductor map of the world,” the government said in an official press release.
India’s semiconductor strategy
India laid the foundation for its semiconductor industry development plan when it launched the India Semiconductor Mission (ISM) in December 2021. The Mission is overseen by the Ministry of Electronic and Information Technology (MEITy). Under the ISM, 12 manufacturing units have been approved with a cumulative investment of over Rs.1.64 lakh crore (~US$ 17 billion) so far. Moreover, 24 semiconductor design projects from start-ups and Micro, Small and Medium Enterprises (MSME) have been approved for financial support, while 105 start-ups/MSMEs have been granted access to industry-standard Electronic Design Automation (EDA) tools. These companies are engaged in designing chips and SoCs for a range of strategic and commercial applications, including satellite communications, drones, surveillance cameras, Internet of Things (IoT) devices, LED drivers, AI systems, telecom equipment, and smart meters.
Semicon 2.0 is expected to support economic growth across all sectors, strengthen national security through enhanced supply chain resilience, and help establish technological leadership in critical sectors. Approach of building the complete ecosystem, will catalyse semiconductor design and manufacturing in India.
Six pillars of semiconductor industry development plan
Semicon 2.0 aims to holistically build the semiconductor ecosystem on the following six pillars:
Design: Semicon 2.0 will build upon the initial success in chip design. With 105 startups already started developing chips, the focus is on deepening the design ecosystem. Under Semicon 2.0, the aim is to develop IPs, designs of chips and systems with this approach.
Machines and materials: Companies involved in the manufacturing and R&D of the machines and manufacturing of materials, chemicals and gases that are essential for manufacturing semiconductors will be incentivized. This will lay the foundation for the sustainable growth of the semiconductor industry, and also help in developing the precision manufacturing industry in India.
Setting up more fabs (fabrication units): With the first fab scheduled to be commissioned in 2028, the world is showing greater confidence in India’s semiconductor strategy. Efforts will be made to attract more manufacturers to come to India and set up fabs to manufacture chips. This will include silicon fabs, compound semiconductor fabs, discrete component fabs, display fabs, etc.
Strengthening the ATMP/OSAT industry: With the success of Assembly, Testing, Marking, and Packaging (ATMP) units, India is emerging as an alternative location for setting up ATMP and Outsourced Semiconductor Assembly and Test (OSAT) units. These will be actively encouraged with a focus on getting some of the most advanced ATMP technologies to India.
Research & Development: The semiconductor journey has started with 28nm-110nm as the node. Now, the focus will be on developing more advanced nodes and other advanced technologies in collaboration with leading R&D centres within and outside India.
Talent development: With 315 universities training students on complex chip design using the latest EDA tools, around 68,000 students have already been trained. It will be developed further and deepen the level of training while in college. Further, the industry will be actively engaged in deepening the clean room, fab construction and other ecosystem training as well.
