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Semiconductors, computing hardware and data centres
Chips, computing hardware and data centres: how chips are designed and made, India's semiconductor programme, supercomputers, export controls on chips, and the power and water a data centre draws. Prelims has asked where India's semiconductor plants are.
1 Sep 2026 · Prelims and Mains
Semicon India Programme
A chip passes through three stages before it is sold, and the intellectual property is created in the first of them. The Semicon India Programme, begun in 2021, went after the other two.
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
- 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.
- India has many chip design engineers, but most work for multinational companies, so the designs and the intellectual property belong elsewhere.
Semicon 2.0
The Centre notified the second phase of the programme with ₹1,27,500 crore under the India Semiconductor Mission. Where the first phase bought factories, this one buys the stage before them.
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
- 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.
UPSC has asked
- Prelims 2026: semiconductor plants in India and their locations
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) · 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)
Data centres
India's data centre capacity has gone from 375 MW in 2020 to about 1.57 GW, and the Central Electricity Authority expects data centres to want 17 GW by 2031-32. The strain is local rather than national: a large facility draws millions of litres a day for cooling, and the new capacity is going up in water stressed States whose incentive packages ask for no water disclosure at all.
Also drawn on, not yet tied to one subject: The Hindu, 9 Aug 2026: Hidden environmental cost of powering growing digital and AI world (opens in a new tab)
14 Sep 2026 · Prelims and Mains
India's data centre capacity
A data centre is counted in megawatts rather than in floor space, because electricity is what it really consumes and what it must be given without a break. India's stock of that capacity has grown more than fourfold since 2020, and the projections for the next five years are steeper still.
375 MWInstalled capacity in 2020
1.57 GWInstalled capacity in August 2026
Nearly 8 GWCapacity projected for 2030
17 GWData centre demand expected by the Central Electricity Authority for 2031-32
- Uninterrupted power and constant cooling are the two demands a data centre makes of the place it stands in, and together they are its environmental cost.
PIB, 14 Sep 2026: Data Centres in India: Infrastructure for the Digital Age (opens in a new tab)
9 Aug 2026 · Prelims and Mains
Water and cooling
Cooling is the demand that meets a local limit first. The heat is carried away by water, and a large facility drinks it by the tanker load every day of the year.
- A 100 MW data centre uses about 2 million litres of water a day.
- A conversation of 20 to 50 exchanges with a chatbot may use about half a litre of that water.
14 Sep 2026 · Prelims and Mains
Efficiency standards
How much of that power and water actually reaches the servers is settled by standards rather than by goodwill. India measures the question with a set of ratios and regulates the building itself through the energy code.
- The Bureau of Indian Standards measures a data centre by Power Usage Effectiveness, Carbon Usage Effectiveness, the Cooling Efficiency Ratio and Water Usage Effectiveness.
- The building must also meet the Energy Conservation Building Code 2017 and the Energy Conservation and Sustainable Building Code 2024.
- Direct-to-chip liquid cooling, adiabatic cooling and immersion cooling are the advanced methods that bring those ratios down.
PIB, 14 Sep 2026: Data Centres in India: Infrastructure for the Digital Age (opens in a new tab)
2 Sep 2026 · 9 Aug 2026 · Prelims and Mains
Siting and environmental clearance
Where the new capacity lands decides whether its water demand can be met at all. The clustering has been towards States that are already short of water, and neither the incentive package nor the clearance regime asks the question.
- Facilities are clustering in water stressed Rajasthan, Maharashtra and Telangana.
- State incentives require neither a water disclosure nor a grid impact assessment.
- Environmental clearance is needed only where the centre forms part of a building project over 20,000 sq m or a township.
- That clearance is granted by the State Environment Impact Assessment Authority.
The Hindu, 2 Sep 2026: India's data centre boom is colliding with its climate reality (opens in a new tab) · PIB, 12 Aug 2026: Data centres: power, water and environmental clearance (opens in a new tab)
14 Sep 2026 · Prelims and Mains
Infrastructure status and power supply
The money and the electricity have each been arranged by a separate decision. One made data centres eligible for infrastructure lending, and the other may eventually put a reactor beside one.
- Data centres gained infrastructure status through the Harmonised List of Infrastructure in 2022-23.
- The SHANTI Act, short for Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India, lets future Small Modular Reactors supply them.
PIB, 14 Sep 2026: Data Centres in India: Infrastructure for the Digital Age (opens in a new tab)
Also filed elsewhere
- Photonics · on Satellite and emerging communications
Photonics is where India's chip policy meets its network hardware: the parts that carry a signal as light rather than as current.