Cabinet Approves Semicon 2.0 Programme

Cabinet Approves Semicon 2.0 Programme

#GS-2 #GS-3 #Governance & Social Justice #Economy #Infrastructure #Science & Technology #Indigenization of Technology #Technology Missions #Current Events #National

Why in News

  • The Union Cabinet has approved the **Semicon 2.0** programme to expand India's electronics and semiconductor industry.
  • Building on the success of the first phase, this scheme aims to establish a complete supply chain from chip design to advanced packaging.
  • The initiative aims to position India as a reliable global manufacturing hub for electronic products and semiconductors.

Overview of Semicon 2.0

  • Launched originally in **2021** as **India Semiconductor Mission (ISM) 1.0**, the new **Semicon 2.0** shifts focus from basic setup to deep ecosystem strengthening.
  • The government has sanctioned a total financial outlay of **Rs 1,27,500 crore** to build a complete domestic ecosystem.
  • Under the chip design pillar, the government supports semiconductor Intellectual Property and startups to make India a leader in fabless chip design.
  • Under the machines and materials pillar, incentives are provided for local production and research in semiconductor equipment, specialty chemicals, industrial gases, and critical materials.
  • Under the fab expansion pillar, capital investments are encouraged for silicon, compound semiconductor, discrete component, and display fabs, with India's first semiconductor fab expected by **2028**.
  • Under the ATMP and OSAT pillar, advanced packaging technologies will strengthen the Assembly, Testing, Marking, and Packaging sector.
  • Under the research and development pillar, partnerships with top global research centers will focus on advanced areas like AI-native chip design.
  • Under the talent development pillar, around **68,000** students across **315** universities are currently getting trained using advanced Electronic Design Automation tools.

Current Status of India's Semiconductor Ecosystem

  • Over the last eleven years, electronics manufacturing in India grew **7-fold** and exports increased **11-fold**, making India the world's second-largest mobile phone manufacturer.
  • The expansion of electronics manufacturing created nearly **25 lakh jobs** over the past decade.
  • Women account for nearly **30%** of the total electronics workforce and **70%** of direct jobs in mobile manufacturing, demonstrating inclusive employment.
  • Since December **2021**, the government approved **12** semiconductor projects across six states with investments exceeding **Rs 1.64 lakh crore**.
  • The original **Semicon 1.0** scheme was launched in **2021** with an outlay of **Rs 76,000 crore** to build initial fabrication and design capabilities through Design Linked Incentives.
  • Financial assistance was provided to **24** semiconductor design projects from startups and MSMEs to design System-on-Chips for satellites, drones, and AI.
  • Under **Semicon 2.0**, India aims to master **3-nanometre** and **2-nanometre** technologies and build a domestic semiconductor market worth **USD 200 billion** by **2035**.

Strategic Importance of a Complete Semiconductor Ecosystem

  • Recent geopolitical tensions like the **US-China** chip rivalry show that semiconductors are critical strategic assets required for national autonomy.
  • Producing chips locally protects critical infrastructure like defense systems, **ISRO** space missions, power grids, and telecom networks from hardware manipulation.
  • Electronics represent India's second-largest import bill after crude oil, so local manufacturing helps reduce the Current Account Deficit.
  • Semiconductors are essential components for electric vehicles, 5G and 6G networks, medical devices, and artificial intelligence hardware.
  • Although India has nearly **20%** of the global chip design talent, full manufacturing capability is needed to lead in Quantum Computing and IoT.
  • Localizing supply chains for raw materials and gases reduces vulnerability to global trade disruptions, especially dependencies on **China**.
  • Becoming a trusted semiconductor provider strengthens foreign partnerships through agreements like the **India-US iCET**, Quad, and bilateral ties with Japan, Germany, and the EU.

Conclusion

  • **Semicon 2.0** marks India's transformation from an electronics assembler into a comprehensive semiconductor superpower.
  • By promoting self-reliance across design, manufacturing, and R&D, this scheme builds a solid foundation for achieving **Viksit Bharat**.