India Launches Semicon 2.0 to Boost Domestic Chip Manufacturing

India has officially initiated the second phase of its semiconductor mission, titled Semicon 2.0, with an expanded focus on diverse manufacturing capabilities. The policy aims to attract more semiconductor fabrication plants (fabs) while prioritizing domestic production of memory, displays, and advanced packaging solutions. This initiative seeks to build upon the momentum of the first phase, transitioning from initial foundational efforts toward a more comprehensive, self-reliant semiconductor ecosystem capable of supporting global supply chains.

Building on the existing Production Linked Incentive (PLI) schemes, the government is introducing more targeted incentives aimed at fostering research and development and product design. Officials have indicated that the government plans to take equity stakes in promising semiconductor startups to de-risk investment and encourage local innovation. This shift responds to industry feedback that scale and cost remain significant hurdles for local players competing in a global market dominated by established international manufacturers.

The government expects these measures to drive domestic firms into advanced high-value areas rather than just assembly. While the first phase focused on attracting large-scale investment, Semicon 2.0 emphasizes the integration of local design houses and academic R&D to create a vertically integrated industry. Success in this phase could position India as a pivotal player in the global chip value chain, potentially reducing reliance on foreign imports and bolstering the nation’s technological sovereignty in the coming decade.