India’s Semicon 2.0 Push Targets Advanced Chips, Bigger Talent Pool and a Stronger Domestic Semiconductor Ecosystem
India is entering a more ambitious phase of its semiconductor journey with the launch of Semicon 2.0, a government-backed programme designed to expand the country’s capabilities from chip design and fabrication to advanced packaging, semiconductor equipment, materials, research and talent development.
Approved by the Union Cabinet in July 2026, the programme carries a total outlay of ₹1,27,500 crore, making it one of India’s largest technology-policy commitments.
The new strategy comes as semiconductors become increasingly important for artificial intelligence, automobiles, telecommunications, consumer electronics, aerospace and national security.
India Sets Its Sights on Advanced Nodes
One of the most ambitious elements of the programme is India’s intention to move toward much more advanced semiconductor technologies.
According to recent statements from the electronics and IT minister, Semicon 2.0 aims to develop process technologies in the 7-nanometre to 3-nanometre range over the next eight years.
The announcement represents a major change in ambition. India’s initial semiconductor manufacturing efforts have focused largely on more mature process nodes, while the next phase is intended to push research and development toward advanced technologies.
A separate government roadmap has also identified longer-term ambitions involving 3nm and 2nm technologies.
₹1.275 Lakh Crore Programme
The scale of Semicon 2.0 is significant.
The Union Cabinet approved a ₹1,27,500 crore budget for the programme. The government says the purpose is not simply to establish individual chip factories but to develop a complete semiconductor ecosystem.
The programme is built around six major areas:
- Chip design
- Semiconductor equipment and materials
- Fabrication facilities
- Advanced packaging
- Research and development
- Talent development
This integrated approach is intended to reduce dependence on overseas supply chains while increasing India’s role in the global semiconductor industry.
Building a Semiconductor Design Workforce
Talent is another major component of the strategy.
The government has set an objective of developing a pool of 100,000 semiconductor design engineers under the expanded programme.
India already has a substantial presence in global chip design. Government data says the country employs nearly 20 percent of the world’s semiconductor chip-design workforce, demonstrating that design is an area where India already possesses significant expertise.
Semicon 2.0 seeks to build on that foundation by expanding domestic intellectual property, chip architectures and complete system designs.
Universities Become Part of the Strategy
The talent initiative is also reaching universities.
Government programmes have already provided advanced electronic-design automation tools to hundreds of institutions. As of July 2026, around 68,000 people had been trained in chip design, while more than 1 lakh engineers had received semiconductor-related training across broader programmes.
The goal is to give students exposure to the tools and skills used in professional chip development before they enter the industry.
That could help India create a much larger pipeline of engineers capable of working across design, fabrication, packaging and semiconductor manufacturing.
From Chip Design to Manufacturing
India’s semiconductor strategy is not limited to designing chips.
The government has already approved 12 semiconductor projects involving investments of more than ₹1.64 lakh crore. These include silicon and compound-semiconductor fabs, display-related manufacturing and packaging facilities.
Three facilities have already begun commercial production, according to government information, marking an important transition from policy announcements toward actual manufacturing activity.
The first major fabrication facility is expected to be commissioned in 2028, according to the government’s Semicon 2.0 announcement.
Equipment and Materials Are Critical
A semiconductor industry cannot rely only on finished chip factories.
Manufacturing advanced chips requires highly specialized equipment, chemicals, gases, materials and precision-engineering capabilities.
Semicon 2.0 therefore intends to support domestic companies involved in producing semiconductor manufacturing equipment and specialized materials. The government says this could also encourage the development of a broader precision-manufacturing ecosystem in India.
Developing these capabilities domestically could make India’s semiconductor supply chain more resilient.
Advanced Packaging Gets Greater Attention
Chip packaging is another area receiving increased emphasis.
Modern semiconductor packages can play an important role in performance, power efficiency and integration, particularly for advanced computing and AI applications.
Semicon 2.0 intends to encourage more advanced ATMP and OSAT capabilities, allowing India to participate in increasingly sophisticated stages of semiconductor production rather than concentrating only on conventional assembly and testing.
AI Is Increasing the Importance of Semiconductors
The semiconductor push comes at a time when artificial intelligence is rapidly increasing demand for high-performance computing.
AI systems require specialized processors, memory and supporting semiconductor technologies. The government has therefore linked semiconductor development with India’s wider ambitions in AI and advanced computing.
A stronger domestic semiconductor ecosystem could give Indian companies greater access to critical technologies while creating opportunities for startups and research institutions.
Why 3nm Matters
A move toward 3nm-class technology would represent a major technological ambition.
Smaller process nodes can allow manufacturers to place more transistors into a given area and potentially improve performance and energy efficiency. However, leading-edge manufacturing is extremely expensive and technically demanding.
NITI Aayog has noted that constructing advanced 3nm fabs can require investments exceeding $15 billion, illustrating the scale of the challenge India faces.
Consequently, developing advanced-node capability will require more than government funding. India will need sophisticated equipment, experienced engineers, reliable supply chains, research partnerships and strong private-sector participation.
A Long-Term Technology Bet
Semicon 2.0 is therefore better understood as a long-term industrial strategy rather than simply a subsidy programme.
India wants to move from having a large population of chip designers to building greater domestic capabilities across the complete semiconductor value chain.
If successful, the strategy could help create high-value employment, strengthen electronics manufacturing, support AI development and reduce vulnerabilities caused by concentrated global chip supply chains.
The government has already described semiconductor self-reliance as an important component of technological and national-security resilience.
India’s Semiconductor Ambition Is Getting Bigger
The next eight years will be particularly important.
India now has manufacturing projects moving toward commercial production, an expanding design ecosystem, growing semiconductor training programmes and a new ₹1.275 lakh crore policy framework.
The biggest test will be turning these investments and ambitions into commercially competitive chips, reliable manufacturing capacity and globally relevant semiconductor intellectual property.
If India can successfully combine its engineering talent with advanced manufacturing, research and a domestic supplier network, Semicon 2.0 could become a significant step in the country’s attempt to establish itself as a major global semiconductor hub.
The journey from mature-node manufacturing toward advanced 7nm and 3nm technologies will not be easy. But the scale of the latest programme makes one thing clear: India is no longer treating semiconductors as a niche technology sector—it is treating them as strategic infrastructure for the country’s digital and industrial future.
