AINEWS
Semicon 2.0, India's follow on chip program, shifts the bet from building chip fabrication plants to backing Indian companies that design, ship, and own the products those chips go into.
India's cabinet approved a roughly Rs 1,27,500 crore (~$15 billion) follow-on chip program called Semicon 2.0 this month, and the interesting part of the announcement is what is not in it: a single new fab. The new money is meant to turn a country that already designs chips into one that ships and owns the products they go into, a harder and less visible pivot than the 12-fab running total suggests.
The dollar figure and the framing were confirmed at the 2nd India Fabless Semiconductor Design Acceleration Workshop at IIT Delhi on Friday, where IT Secretary S. Krishnan and India Semiconductor Mission (ISM) CEO Amitesh Kumar Sinha laid out the program alongside the India Cellular and Electronics Association (ICEA) and FITT, IIT Delhi. "Fabless design" means the architecture and logic of a chip are drawn up locally while fabrication, the physical printing of transistors onto silicon, is done elsewhere. India has built up that design base over the last decade; what it has not built is the layer above it.
The pivot is explicit in how the government is framing the money. ISM 1.0, the first phase of the program, subsidized fab construction and gave more than 340 universities and startups access to EDA tools, the chip-design software that costs thousands of dollars per seat and used to be the main barrier to entry. Semicon 2.0 keeps that machinery running through the India Semiconductor Mission and adds new funding for design-to-product transition, indigenous IP creation, long-term financing, and market access for Indian chip companies, according to both officials at the workshop.
The "products" in question are not exotic. The target sectors Krishnan named are mobile phones and wearables, televisions and home appliances, IT hardware and data centers, and automotive electronics. Each is a category where India already assembles for global brands but does not own the chip designs or, in most cases, the brand. The 12 manufacturing units approved under ISM 1.0, with cumulative investment of more than Rs 1.64 lakh crore (~$19 billion), are the track record being carried into the new program.
That is also where the "indigenous IP" claim gets harder to evaluate. In semiconductor terms, "indigenous IP" can mean three very different things: a chip architecture licensed from an overseas designer and rebranded, a design patent filed by an Indian team, or full ownership of the end product that uses the chip. The Semicon 2.0 rhetoric does not yet distinguish between them, and the line-item split in the cabinet's approval will tell readers which is being funded. If most of the new money is fab carryover and the design/IP track is a small share, the pivot is rhetorical, not structural.
Of the 12 manufacturing units approved under ISM 1.0, the running total mixes silicon fabs, OSAT (Outsourced Semiconductor Assembly and Test), and ATMP (Assembly, Testing, Marking, and Packaging) facilities. That mix matters because OSAT and ATMP are cheaper to build and do not move a country up the value chain the way a leading-edge fab does. Industry analysis from Zetwerk's 2026 manufacturing roundup and India Briefing's investor overview both flag that India's pipeline is still weighted toward the back end of the value chain, not the leading-edge front end.
The US CHIPS Act, the EU Chips Act, and Chinese provincial subsidies have together reshaped where new fabs get built over the last three years, and the global pipeline of new fabrication plants is already long. Al Jazeera's recent global chip-race comparison and ORF's research on India's semiconductor ambitions both note that subsidy money is a necessary but not sufficient condition for catching up at advanced nodes, the smallest and most capital-intensive chip geometries, where most of the world's leading-edge capacity still sits in Taiwan and South Korea.
The line that has to hold is whether the next phase of the program can name specific companies, fabs, and design wins rather than sectors. ISM 1.0 took roughly a decade to produce 12 approved manufacturing units, and not all of them are producing yet. The next milestone worth watching is the line-item breakdown of the Rs 1,27,500 crore outlay, which the PIB press release on the cabinet approval will publish in detail; that breakdown is the easiest place for a reader to check whether the design-to-product pivot is real or a relabel of the same fab subsidies.