MeitY has notified a ₹1,27,500 crore semiconductor programme expanding support beyond fabs to equipment, materials, packaging and talent.
The Ministry of Electronics and Information Technology (MeitY) has notified the second phase of the Semicon India programme, widely known as Semicon 2.0, with a total outlay of ₹1,27,500 crore. While the first phase focused primarily on semiconductor fabrication and assembly, the new programme expands support across six segments of the semiconductor supply chain, including areas beyond fabs and packaging.
The notified structure covers chip design for strategic and commercial applications, chip deployment that supports designs reaching volume production, silicon wafer and speciality fabs, advanced packaging and outsourced semiconductor assembly and test (OSAT) facilities, equipment and materials manufacturing, and research, development and talent. The equipment and materials pillar is the significant new addition: India has approved twelve semiconductor projects across six states so far, but none is focused on manufacturing the specialised production equipment, chemicals and materials those facilities consume.
Silicon wafer fabs receive support covering 40 per cent of eligible capital expenditure, while compound semiconductor, photonics and sensor fabs, display fabs and advanced packaging facilities can receive 35 per cent. Legacy packaging receives 25 per cent, while equipment and materials projects can receive support of up to 30 per cent. Chip deployment works differently, reimbursing 9 per cent of net sales over five years, subject to caps per application and company, while research and talent projects can receive funding covering up to 75 per cent of project costs.
A silicon wafer fab applicant needs a minimum investment of ₹20,000 crore and projected revenue of ₹7,500 crore, while operating 300-mm wafers at 40,000 wafer starts per month or more. A compound semiconductor, photonics or sensor fab requires at least ₹500 crore of investment and ₹200 crore of revenue, while display fabs require ₹10,000 crore of investment and ₹5,000 crore of revenue. An assembly, testing, marking and packaging or OSAT facility requires at least ₹1,000 crore of capital expenditure and ₹200 crore of revenue. Design startups and micro, small and medium enterprises must be Indian-owned or controlled by Overseas Citizen of India holders. Eligible design startups and MSMEs can receive milestone-linked advance seed funding covering up to 50 per cent of project cost, capped at ₹15 crore per application.
Central support for silicon wafer fabs has fallen from 50 per cent to 40 per cent under the new programme. According to officials briefing the press, state governments are expected to provide additional incentives worth roughly half of the central contribution, bringing total public support to around 60 per cent. Compared with the first phase, applicants could therefore receive broadly similar overall support, but would need to secure incentives from both the central and state governments.
This is a notified scheme, not a proposal. Micron, Kaynes Semicon and CG Semi have already begun commercial production under the earlier phase of India’s semiconductor programme. According to IT Secretary S. Krishnan, the new scheme is intended to strengthen self-reliance while building a globally competitive semiconductor industry. Union Minister Ashwini Vaishnaw has said that India could account for close to 10 per cent of the global semiconductor market in the coming years, although this remains a projection rather than a formal commitment or guaranteed outcome.
The thresholds are the practical news for readers. A design startup no longer needs a fab partner to qualify for support, although it must meet the Indian or Overseas Citizen of India ownership requirements. A test and measurement company, gas supplier or photoresist manufacturer can now apply independently under the new equipment and materials pillar, which did not exist in the earlier phase. For engineers, the 35 per cent support available for compound semiconductor, photonics and sensor fabs is particularly significant: gallium nitride, silicon carbide and micro-electro-mechanical systems facilities face a ₹500 crore investment threshold rather than ₹20,000 crore for a silicon wafer fab, potentially putting such projects within reach of Indian mid-sized companies. Students and faculty are also covered through the research and talent pillar, which can fund up to 75 per cent of project costs, including activities such as university tape-outs.
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