Centre Notifies Semicon 2.0 With Rs 1.27 Lakh Crore Outlay

New Delhi: The Centre on Monday formally notified Semicon 2.0, setting in motion the Rs 1.27 lakh-crore plan that seeks to deepen India’s semiconductor ambitions in the country. The government’s plan to open up the next phase of its semiconductor push to a much wider set of companies and institutions — from chip-design start-ups and MSMEs to semiconductor fabs, packaging companies, materials manufacturers, research organisations and training institutions.

As per the notification, the ministry of electronics and information technology (MeitY) said that it has divided eligible applicants into six pillars and 10 categories. The move of the ministry comes at a time when semiconductors have emerged as a critical strategic resource globally, with the AI boom driving unprecedented demand for advanced chips and memory.

At the same time, growing concerns over supply-chain vulnerabilities and shifting geopolitics have pushed global players to expand semiconductor capacities and reduce dependence on concentrated production hubs. “Now the time is ripe to move to next stage to develop semiconductor ecosystem through Semicon 2.0. The objective of the scheme is self reliance and fostering a globally competitive industry,” IT secretary S Krishnan said at a briefing.

For design of chips for the commercial sector, the eligibility will be startups, and companies owned by Indian citizens or OCI. For start-ups, financial support will be in the form of grant and equity co-investment, and for companies it would be in the form of royalty financing or equity co-investment.

When it comes to setting up more fabs, the new scheme will provide 40 per cent fiscal support for silicon fabs and 35 per cent for compound, display (LCD, OLED, micro LED), and other specialised fabs. For strengthening assembly, testing, marking and packaging and outsourced semiconductor assembly and test, it supports advanced and legacy packaging with an incentive of 35 percent of capex for advanced packaging and 25 percent of capex for conventional packaging.

Previously, under the first phase of the programme, the government had approved 12 semiconductor projects across six states, with three facilities — Micron's assembly, test and packaging (ATMP) plant, Kaynes Semicon and CG Semi OSAT facility--having commenced commercial production earlier this year.