India’s semiconductor industry could see more than ₹5 lakh crore in cumulative private and industry investment over the next five to seven years following the notification of Semicon 2.0, according to the India Electronics and Semiconductor Association (IESA).
The industry body said the new programme could strengthen India’s semiconductor ecosystem by extending government support beyond chip fabrication to the wider value chain. That includes design, advanced packaging, equipment, materials, research and development, and workforce development.
Semicon 2.0 has a total budget outlay of ₹1,27,500 crore. The programme covers six areas: chip design, machines and materials, new fabs, ATMP/OSAT, R&D and talent development.
IESA President Ashok Chandak said the speed with which the government moved from Cabinet approval to formal notification provides greater policy visibility for an industry that typically makes investments over 10-15 years.
“India is now moving from credibility to capability,” Chandak said, adding that policy continuity would be important to sustaining long-term investment.
The new programme builds on the Semicon India Programme, which IESA said has already helped create confidence among semiconductor companies and investors. The first phase resulted in 12 approved projects, support for more than 100 design startups and access to electronic design automation tools across more than 355 institutes and 60,000 students, according to the industry body.
IESA also pointed to progress in semiconductor talent and design financing. More than 70,000 students have been trained under the Chips to Startup initiative, while more than ₹1,000 crore in venture capital funding has flowed into Indian semiconductor design companies, it said.
Six-Part Semiconductor Strategy
The broader scope of Semicon 2.0 is central to IESA’s assessment of its investment potential.
Chandak said the government’s financial support should be viewed as a catalyst rather than the total capital entering the sector. Semiconductor projects can create demand across equipment, materials, specialty chemicals, precision engineering, packaging, testing, logistics and skilled labor.
The association expects that effect to become stronger when Semicon 2.0 operates alongside other government programmes, including the Electronics Components Manufacturing Scheme (ECMS), Mobile Phone Manufacturing Scheme (MPMS) and Electronics Manufacturing Clusters (EMC).
IESA describes this combination as a potential semiconductor and electronics “flywheel.” In that model, chip design creates intellectual property and products. Fabs and packaging facilities establish manufacturing capacity. Equipment and materials suppliers strengthen the domestic supply chain. Electronics manufacturing creates demand, which can then support further investment and R&D.
The objective is to increase domestic value addition while creating opportunities for startups, small businesses and global suppliers.
Push Toward Advanced Nodes
Chip design is one of the six pillars and is expected to build on India’s existing strength in semiconductor engineering.
IESA’s industry outlook calls for hundreds of fabless semiconductor companies by 2030-32. It also targets the emergence of five to 10 globally scaled semiconductor product companies and more than 500 indigenous semiconductor IPs and products.
Manufacturing is another major focus.
The industry body has set an aspiration for seven or more additional operating fabs or specialty fabs by 2030-32. These could cover silicon logic and memory, compound semiconductors and other strategic technologies.
IESA also sees an opportunity for India to enter the 7-nanometer semiconductor manufacturing and design pathway.
Advanced packaging is expected to play a similar role. The association aims to see India double its globally competitive ATMP/OSAT and advanced-packaging capabilities.
ATMP, or assembly, testing, marking and packaging, and OSAT, or outsourced semiconductor assembly and test, are important parts of the chip supply chain. They can also offer countries a lower barrier to entry than leading-edge wafer fabrication.
Equipment and materials form another critical part of the strategy. IESA expects a larger pool of Indian companies to emerge across semiconductor equipment, materials, specialty chemicals, gases and precision engineering.
The association sees potential for 10-15 Indian companies to develop into global suppliers, supported by technology partnerships and joint ventures.
R&D and Talent Become Strategic Priorities
Semicon 2.0 also places greater emphasis on semiconductor research and development.
IESA’s industry outlook calls for major semiconductor R&D centers and centers of excellence. It also targets more than 100 commercially relevant indigenous technologies and IPs, with greater emphasis on industry-led research and technology commercialization.
The association highlighted research areas including the 7-3 nanometer pathway, silicon photonics, Micro LED and compound semiconductors. It also pointed to support for Indian fabless companies and manufacturing-related skills development.
Talent remains a major constraint for a rapidly expanding semiconductor industry. IESA expects the ecosystem to develop a workforce numbering several hundred thousand across advanced electronics and semiconductor disciplines by 2030-32.
The required skills will span chip design, semiconductor manufacturing, equipment, materials, advanced packaging and R&D.
The association said its own programmes, including Startup Mitra, workforce development, industry-led R&D through IDSPS, policy advocacy and international collaborations, will support the wider effort.
From Manufacturing to Technology Ownership
The semiconductor strategy comes as India seeks to strengthen its position in a supply chain dominated by established manufacturing and technology hubs in Asia, the United States and Europe.
Building fabs is only one part of that challenge. A sustainable ecosystem also requires domestic suppliers, engineering capabilities, intellectual property, product companies and researchers.
That is where the wider scope of Semicon 2.0 could prove important.
IESA said the ultimate measure of the programme should be the technology and businesses created in India, rather than the number of manufacturing facilities alone.
“The real success of Semicon 2.0 will not be measured by the number of fabs alone,” Chandak said. He pointed to IP, products, companies, talent, retained economic value and access to global markets as broader indicators.
The association also credited the Ministry of Electronics and Information Technology (MeitY) and India Semiconductor Mission (ISM) for the speed of implementation. IESA specifically recognized Electronics and IT Minister Ashwini Vaishnaw, MeitY Secretary S. Krishnan and ISM CEO Amitesh Kumar Sinha.
For investors, the immediate significance of Semicon 2.0 is the wider policy framework it provides. Semiconductor projects require substantial capital, long development cycles and confidence that government support will remain consistent through multiple investment phases.
The ₹1,27,500 crore public outlay is therefore intended to unlock a much larger pool of private capital.
IESA’s projection of more than ₹5 lakh crore in cumulative investment over five to seven years remains an industry outlook rather than a government commitment. Its realization will depend on project execution, technology partnerships, infrastructure, demand and the ability to develop competitive domestic suppliers.
Still, the programme marks a broader shift in India’s semiconductor strategy. The focus is moving from establishing initial manufacturing capacity toward building the industrial capabilities around it.
If that ecosystem develops as planned, Semicon 2.0 could give India a larger role across the semiconductor value chain.
