Semicon 2.0 in 3-4 months; will focus on entire value chain: Vaishnaw

The Indian government has successfully completed the first phase of its ambitious Semicon India initiative, which aims to establish the country as a global hub for semiconductor manufacturing and design. With the successful rollout of Phase 1, the ministry of electronics & IT is now formulating the roadmap for "Semicon 2.0," the next phase in its strategy to further build and strengthen the semiconductor ecosystem. The details of Semicon 2.0 are expected to be announced in the next 3-4 months.

“We are now at a stage where the first phase of the Semicon programme is practically completed. We had promised that it would take about 18 to 24 months for the first phase to be done, and we are very well within that promise. Now, we are formulating Semicon 2.0, which will be a much-expanded version of Semicon 1.0," states Ashwini Vaishnaw, minister of electronics and IT.

Based on the learnings from Semicon 1.0, the government is confident in its vision to bring a comprehensive semiconductor ecosystem to India. “We will give equal emphasis to ecosystem partners and equipment manufacturing, just as we have for ATMP (Assembly, Testing, Marking, and Packaging) and fabs. We will also focus on attracting chemical manufacturing to India and emphasise specialised materials. This will cover the entire value chain—from ingots and wafers to fabs and ATMP. It is Prime Minister Narendra Modi’s vision to focus on the complete semiconductor value chain,” Vaishnaw adds.

To launch the Semicon 2.0 scheme, the government will need approvals from 3-4 different departments, which could take about 3-4 months. Vaishnaw also mentioned that several promising proposals are currently under evaluation, and the Ministry of Electronics & IT (MeitY) intends to present them to the cabinet for approval soon.

Vaishnaw did not reveal the budget for Semicon 2.0 but mentioned that the government is holding "detailed consultations with each stakeholder in the semiconductor industry." He also noted that 3-4 additional states, including Uttar Pradesh, will soon host semiconductor units. Currently, approved projects are underway in Gujarat and Assam.

Vaishnaw expressed optimism about the participation of global semiconductor ecosystem players. He noted that several CEOs of leading companies are in India and have commented that, in their 30-40 years of experience, they have never seen the entire ecosystem come together and collaborate under one roof.

Semicon India 1.0

To establish a semiconductor ecosystem in India, the Union Cabinet, chaired by Prime Minister Narendra Modi, launched the Semicon India programme in December 2021 with a financial outlay of ₹76,000 crore. Recognising the strategic importance of semiconductors in global geopolitics and the digital economy, the government, in the first phase of the programme, offered a 50% fiscal subsidy on a pari-passu basis for semiconductor fabs, display fabs, compound semiconductors, silicon photonics, sensor fabs, and semiconductor ATMP/OSAT facilities. State governments have also contributed by offering additional subsidies of 20-25% over the central government's incentives to attract these investments.

Under Semicon 1.0, the government approved a fabrication unit by Tata Electronics in partnership with Taiwan’s Powerchip Semiconductor, along with a testing and packaging plant. Additionally, the cabinet approved an ATMP facility by Micron and OSAT facilities by CG Power and Kaynes. Once operational in the coming years, these plants are expected to serve both domestic and international markets.

The Indian government has also signed partnerships and Memorandum of Understanding (MoUs) with countries such as the US, EU, Japan, and Singapore, with more agreements in the pipeline.