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Semiconductor programme
India's chip programme has moved a stage on. The first phase, from 2021, chased factories and got twelve projects approved across six States. The second, notified on 1 September 2026 with ₹1,27,500 crore, puts design first, because India trains plenty of chip designers but they work for foreign companies, so the intellectual property leaves with them.
UPSC has asked
- Prelims 2026: semiconductor plants in India and their locations
How a chip is made
Design
Engineers design the chip, creating its intellectual property (IP)
Fabrication
Circuits built on silicon wafers in a fab
ATMP/OSAT
Wafers assembled, tested and packaged into finished chips
- India has many chip design engineers, but most work for multinational companies, so the designs and the intellectual property belong elsewhere.
The three chip design tracks
Strategic chips
- For national security and critical infrastructure
- Government names the IP and chips it wants
- C-DAC selects developers by bidding
- IP jointly owned by company and C-DAC
Commercial fabless firms
- Seed funding
- Electronic design automation tools and multi-project wafer runs
- Royalty financing for larger firms
- Open to firms owned by Overseas Citizens of India
Deployment linked incentive
- An incentive linked to net sales of new Indian designed chips
- Capped per application and per company
What the first phase built
- Begun in 2021, it approved 12 projects across six States, including Micron's assembly and test plant and a Tata Electronics wafer fab built with Taiwan's Powerchip Semiconductor Manufacturing Corporation.
What has happened
1 Sep 2026
The Centre notified the framework of Semicon 2.0, the second phase of the Semicon India Programme, with ₹1,27,500 crore under the India Semiconductor Mission.
- Capital support widens beyond wafer fabs to compound semiconductor, photonics, sensor and display fabs, packaging, equipment, materials, research and talent.
- Design gets three tracks of its own, to turn Indian designers into Indian owned fabless companies.
The Hindu, 31 Aug 2026: Govt notifies ₹1,27,500-crore Semicon 2.0; spells out eligibility norms, sops for chip ecosystem (opens in a new tab) · The Indian Express, 1 Sep 2026: Semicon 2.0: What is India's Rs 1.27 lakh-crore push for chip design? (opens in a new tab)
22 Aug 2026
The Centre began work on a subsidy scheme for polysilicon, the first link in the solar value chain and a step upstream of chip making.
- It aims to add 30 GW of polysilicon capacity by 2030.
The Hindu, 22 Aug 2026: Centre plans support for polysilicon manufacturing (opens in a new tab)