Semiconductors are among the most important building blocks of the modern world. From smartphones and computers to automobiles, satellites, artificial intelligence, telecommunications, defence systems and medical equipments, almost every advanced technology depends on semiconductor chips. Recognising their growing importance, the Government of India under Prime Minister Narendra Modi, has been taking sustained steps to build a strong domestic semiconductor ecosystem and reduce vulnerabilities arising from dependence on global supply chains.
The progress made in recent years and the approval of Semicon 2.0 with an outlay of Rs 1,27,500 crore show the scale of this effort. The leadership of Prime Minister Narendra Modi, the programme builds on the foundation created by Semicon 1.0 and expands India’s focus from semiconductor manufacturing to the wider ecosystem of design, research, machines, materials, advanced packaging and talent.
This approach is important because semiconductor manufacturing is not limited to making chips in a factory. A complete ecosystem requires chip designers, fabrication facilities, specialised machines, materials and gases, packaging and testing facilities, research institutions and highly skilled professionals. Semicon 2.0 has therefore been structured around six strategic pillars covering design, machines and materials, new fabs, advanced packaging, research and development and talent development.
India’s semiconductor journey has already moved beyond the planning stage. Under the Semicon India Programme, 12 semiconductor manufacturing projects have been approved across six states, involving cumulative investments of more than Rs 1.64 lakh crore. These include silicon and compound semiconductor fabs, a display fab and advanced packaging facilities. Three projects have already started commercial production, marking an important transition from policy support to actual manufacturing.
The progress is particularly significant because India had no commercial semiconductor manufacturing plant when the first phase of the programme was approved in 2021. Semicon 1.0, with an outlay of Rs 76,000 crore, was designed to establish a domestic semiconductor and display manufacturing ecosystem. It supported fabs, compound semiconductors, silicon photonics, sensors, ATMP/OSAT facilities and semiconductor design.
The next phase is designed to take this foundation further. Hence, Semicon 2.0 seeks to create greater depth across the value chain. It places special emphasis on machines and materials required for chip manufacturing, encouraging domestic capabilities in areas that are essential for long-term growth.
Chip design is another area where India already has significant strengths. Under the Design Linked Incentive scheme and related initiatives, Indian companies and academic institutions are developing semiconductor designs for applications across different sectors. The government has also expanded access to advanced electronic design automation tools for universities and startups. More than one lakh engineers from hundreds of organisations have been provided access to advanced chip-design tools, while more than 300 chip designs have been developed through these initiatives.
Talent development is equally important. Semiconductor manufacturing and design require specialised skills, and India has a large young technical workforce. Under the Chips to Startup programme, semiconductor education and training have been expanded across academic institutions. More than 68,000 students have been trained in chip design, while hundreds of institutions have been provided access to advanced design tools. This investment in young talent can help create a strong pipeline of engineers and researchers for the semiconductor industry. The objective is not only to meet India’s future requirements but also to strengthen the country’s role in global semiconductor design and technology.
India’s existing strategic capabilities also provide an important foundation. The semiconductor laboratory in Mohali has contributed to India’s space programme by developing specialised chips for applications requiring high reliability. Indigenous semiconductor capabilities have supported important missions and technologies, demonstrating that India has been developing expertise in this field.
The semiconductor push also has a direct connection with India’s growing digital and electronics economy. Artificial intelligence, data centres, electric mobility, 5G and 6G networks, the Internet of Things and autonomous technologies are increasing demand for advanced chips. India’s domestic semiconductor market is projected to reach about USD 110 billion by FY2030 and exceed USD 200 billion by FY2035.
This growing demand makes domestic capabilities increasingly important. India spent almost USD 150 billion on semiconductor product imports during FY2017-FY2025, with imports growing at a compound annual growth rate of about 23 percent during this period. Strengthening domestic manufacturing can therefore contribute to greater resilience and higher domestic value addition.
The government’s semiconductor strategy is also closely linked with wider industrial policies. The National Policy on Electronics, SPECS, Electronics Manufacturing Clusters, Production Linked Incentive schemes and the Electronics Components Manufacturing Scheme are designed to strengthen different parts of the electronics manufacturing ecosystem.
International partnerships are another important part of the strategy. India has developed semiconductor cooperation with countries and regions including the United States, Japan, the European Union, Singapore and the Netherlands. Such partnerships can provide opportunities for technology cooperation, investment and integration with global supply chains. The government’s approach combines stronger domestic capacity with international collaboration rather than treating self-reliance and global engagement as competing objectives.
SEMICON India 2026 provides a major platform to showcase this progress. Inaugurated by Prime Minister Narendra Modi at Yashobhoomi, New Delhi, the event from September 17 to 19 under the theme ‘Silicon to Systems: Building the Ecosystem’, underscores the significance and urgency. It brings together global semiconductor companies, policymakers, investors, researchers, startups and academic institutions.
The theme reflects the larger direction of India’s semiconductor strategy. The goal is to move from individual capabilities towards an integrated ecosystem covering the journey from materials and machines to design, manufacturing, packaging and final systems.
The road ahead will require sustained investment, technological innovation, skilled manpower and long-term policy support. Semiconductor manufacturing is among the world’s most complex industries and building competitive capabilities takes time. The government’s decision to expand the programme through Semicon 2.0 provides a long-term framework for continuing this effort.
India’s semiconductor story is therefore becoming an important part of its broader technology and manufacturing journey. The combination of policy support, investment, manufacturing projects, design capabilities, international partnerships and talent development is creating a foundation for greater participation in the global semiconductor value chain.
The progress achieved under Semicon 1.0 and the expanded vision of Semicon 2.0 represent a significant shift in India’s approach to this strategically important technology. From building capabilities in chip design and packaging to developing fabs, machines, materials, research and talent, India is working towards a more complete semiconductor ecosystem.
For a country aspiring to become a developed and technology-driven economy, this capability has wider significance. Semiconductors will increasingly influence the future of artificial intelligence, communications, mobility, defence, space and advanced manufacturing. India’s sustained semiconductor push is therefore not only about producing chips, it is about building the technological capabilities required for the next generation of economic growth and innovation.
