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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.
All 8 subjects shown; the 4 that changed from 1 to 15 September 2026 are marked.Show only these
Semicon India Programme
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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.
- 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.
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
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.
What changed
1 Sep 2026
15 Jul 2026Update
- The Union Cabinet approved Semicon 2.0 with an outlay of ₹1,27,500 crore.
- Capital support falls from a uniform 50 per cent to 40 per cent for silicon fabs, 35 per cent for other fabs and advanced packaging and 25 per cent for conventional packaging, while chip design can get up to 75 per cent.
- The near term focus stays on mature nodes of 28 nanometres and above, which make up about 70 per cent of world demand.
PIB, 15 Jul 2026: Cabinet approves Semicon 2.0 - Government delivers on its commitment for a long-term policy support to Semiconductors in India (opens in a new tab) · The Indian Express, 15 Jul 2026: Cabinet approves India Semiconductor Mission 2.0 with a six-year outlay of about Rs 1.27 lakh crore (opens in a new tab)
4 Jul 2026Update
- The CG Semi assembly and test plant at Sanand began commercial production, the third approved unit to do so.
PIB, 4 Jul 2026: Chip Momentum Would Boost the Atmanirbhar Bharat Mission: Union Minister Ashwini Vaishnaw (opens in a new tab) · The Hindu, 4 Jul 2026: India's semiconductor push will create countless jobs: PM (opens in a new tab)
Background reading: 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)
UPSC has asked
- Prelims 2026: semiconductor plants in India and their locations
Mobile Phone Manufacturing Scheme
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The scheme succeeds the production linked incentive for large scale electronics and pays a share of eligible sales, with extra incentives for components sourced in India and for Indian brands that design their own products.
What changed
15 Jul 2026New subject
- The Cabinet approved a ₹62,500 crore scheme for 2026 to 27 to 2030 to 31, after the production linked incentive for large scale electronics ended on 31 March 2026.
- The base incentive is 2.25 to 5 per cent of eligible sales, with up to 1.5 per cent more for sourcing components in India and a further 3 per cent for Indian brands that design the product.
PIB, 15 Jul 2026: Cabinet approves Mobile Phone Manufacturing Scheme (MPMS) (opens in a new tab)
Semiconductor design access
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The Semi-Conductor Laboratory at Mohali is India's only working fab, and its process design kit lets a chip design be taken to a layout ready for fabrication on an Indian process; the Chips to Startup programme sends student designs there.
What changed
23 Jul 2026New subjectalso in news
- The process design kit of the Semi-Conductor Laboratory, Mohali is now open to students, so a design can be taken to a layout ready for fabrication on an Indian process. Under the Chips to Startup programme 175 designs have been sent for fabrication there.
PIB, 23 Jul 2026: eChipHub serves as a comprehensive national platform for semiconductor design education and capacity building (opens in a new tab) · PIB, 30 Jul 2026: Over 1 Lakh Engineers Trained, 68,000 Persons Skilled in Chip Design and 175 Chip Designs Taped Out Under Semiconductor Talent Development Initiatives (opens in a new tab)
See also: Semicon India Programme
High bandwidth memory
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High bandwidth memory is memory stacked vertically and connected to the processor through very wide data paths, which is what training large artificial intelligence models depends on, and two South Korean firms make most of it.
What changed
10 Jul 2026New subjectalso in news
- Two South Korean firms hold nearly four fifths of the market for high bandwidth memory, the stacked memory that AI training depends on, and semiconductors are now about a quarter of South Korea's exports.
Data centres
India's data centre capacity
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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.
- 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.
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
What changed
14 Sep 2026
PIB, 14 Sep 2026: Data Centres in India: Infrastructure for the Digital Age (opens in a new tab)
14 Sep 2026
- 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)
28 Jul 2026Updatealso in news
- An industry projection puts operational capacity at 2.2 GW in 2025, rising to 12 GW by 2030, with AI dedicated capacity growing from 275 MW to about 6,500 MW. The official figures in the standing part count differently and are not replaced.
9 Jul 2026Updatealso in news
- Gujarat notified India's first State data centre policy, for 2026 to 29, which includes support for captive desalination plants to meet the sector's water demand.
Water and cooling
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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.
What changed
Efficiency standards
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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.
What changed
Siting and environmental clearance
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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.
What changed
2 Sep 2026
9 Aug 2026
26 Jul 2026Update
- Residents of Thane protested on 18 July against a hyperscale data centre of about 54 acres that needs about 422 MW of continuous power. The company puts its water need at 125 kilolitres a day, the municipal corporation says it will supply 12 million litres a day of recycled sewage water, and the city is already short by 40 million litres a day. In Visakhapatnam and Anakapalli, about 601 acres allotted for a 1 GW hub drew objections over water, power and nearby forest.
- Maharashtra cut the green energy requirement for such projects from 100 to 51 per cent in June 2026.
- Also in news: New York State halted large new data centres on 14 July, and Amsterdam and Singapore have used moratoriums or quotas.
The Hindu, 26 Jul 2026: Why are mega data centre projects facing stiff resistance? (opens in a new tab) · Frontline, 7 Aug 2026: A residents' campaign against a hyperscale data centre inside Thane city has turned data centre siting into a mainstream environmental dispute in Maharashtra, with water, power and heat as the contested grounds. (opens in a new tab) · The Indian Express, 23 Jul 2026: Data centre construction is being halted abroad over power, water and local costs, as India expands its own (opens in a new tab)
Background reading: PIB, 12 Aug 2026: Data centres: power, water and environmental clearance (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.