India approves second phase of semiconductor mission with budget of 1.27 lakh rupees

Expansion of Supply Chain Support

Unlike the first phase, Semicon 2.0 also extends incentives to suppliers of critical raw materials for chip production, including minerals and industrial gases. This is being done to create a more complete domestic semiconductor supply chain. The minister emphasized that ISM 2.0 was approved with a total budget of 1.27 lakh rupees.

Priorities and Self-Reliance

According to Vaishnaw, Semicon 2.0 will cover the entire semiconductor creation cycle and will be built on six main areas, with chip design being the first area of focus. He added that the program will prioritize the development, creation, and production of indigenous semiconductor chips to strengthen India's internal capabilities. The minister stated that by the end of this program's implementation, the country will achieve self-sufficiency in domestic chip production.

Results of the First Phase and Global Context

Previously, the government had allocated 76,000 crore rupees for the first phase of the India Semiconductor Mission (ISM). Under ISM 1.0, 12 projects were approved with cumulative investments of approximately 1.64 lakh rupees, with Tata Electronics and its semiconductor division contributing a significant portion of these commitments.

The launch of Semicon 2.0 comes amid a global race among countries to expand semiconductor manufacturing capacity, driven by constant supply constraints and growing demand for advanced chips, especially those used in artificial intelligence applications. The government anticipates that the new scheme will attract investments into additional semiconductor segments and help meet the rising demand for AI-focused chips.