India Semiconductor Mission 2.0 Gets Cabinet Approval with ₹1.27 Lakh Crore Outlay

The Union Cabinet has approved India Semiconductor Mission (ISM) 2.0 with a budgetary outlay of ₹1.27 lakh crore, marking the next phase of the country's semiconductor programme, as per The Economic Times report.  

It also approved a ₹62,500 crore Mobile Phone Manufacturing Scheme (MPMS). The 2 proposals were among seven Cabinet decisions with a combined value of about ₹2.19 lakh crore, alongside projects related to railways, fertilisers and infrastructure. 

Six-Part Framework for the Next Phase 

The government has structured ISM 2.0 around 6 areas covering semiconductor design, manufacturing equipment, materials, fabrication, packaging, research and skill development.  

The design segment will provide support for semiconductor intellectual property (IP), chip design, and system development.  

Another component will encourage domestic production of semiconductor equipment, specialty chemicals, industrial gases, and raw materials used in manufacturing.  

The programme also aims to attract investments in silicon fabs, compound semiconductor units, display fabs, and discrete semiconductor facilities. 

Research and Training 

The mission includes a separate provision for research into semiconductor technologies beyond the existing 28nm to 110nm process nodes. According to the government, this work will be carried out with support from research institutions in India and overseas. 

Skill development will remain part of the programme. The government said 315 universities are already using industry-standard Electronic Design Automation (EDA) tools, with nearly 68,000 students trained under the first phase.  

The next phase will also include training in fabrication, clean-room operations, and other technical areas required by semiconductor manufacturing. 

Status of the First Phase 

According to the government, 12 semiconductor manufacturing projects involving investments of more than ₹1.64 lakh crore have been approved under Semicon 1.0.  

These include one silicon fabrication plant, one silicon carbide fab, one integrated gallium nitride Micro LED display facility, and 9 semiconductor packaging units.  

3 companies, Micron, Kaynes and CG Semi, have started commercial production, while another manufacturing unit is expected to become operational in 2026.  

The government also said 24 semiconductor design projects have received financial assistance, while 105 startups and MSMEs have been given access to EDA software to develop chips for applications including telecom, artificial intelligence, satellite communication, drones and IoT devices. 

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Conclusion 

The latest Cabinet approvals increase government funding for semiconductor manufacturing and related industries, with separate allocations for chip ecosystem development and mobile phone production. 

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