The Government of India notified the Semicon 2.0 scheme on 31 August 2026 as the next phase of the Semicon India Programme. The scheme carries a fiscal outlay of ₹1,27,500 crore and sets guidelines for semiconductor manufacturing, design, packaging, and talent development in India.
Semicon 2.0 Framework
The scheme is structured around six pillars. These are design, machines and materials, fabrication units, ATMP and OSAT facilities, research and development, and talent development. ATMP stands for assembly, testing, marking, and packaging. OSAT stands for outsourced semiconductor assembly and test.
Fiscal Support for Fabrication Units
Under the notified guidelines, silicon wafer fabs with a minimum investment of ₹20,000 crore are eligible for 40% fiscal support. Compound, display, and other specialised fabs are eligible for 35% fiscal support. These categories are part of the semiconductor manufacturing chain used for integrated circuits and related electronic components.
Incentives for Chip Design and Skills
The scheme allows startups and Indian- or OCI-owned companies to apply for chip design incentives. The Deployment-Linked Incentive is fixed at 9% of net sales for up to five years, with a cap of ₹30 crore per application. The government has also set a target to train 100,000 additional semiconductor engineers, after 85,000 engineers were already trained.
Important Facts for Exams
- Semicon 2.0 is the second phase of the Semicon India Programme.
- Silicon wafer fabs are the core facilities used for semiconductor chip fabrication.
- ATMP refers to assembly, testing, marking, and packaging in the semiconductor value chain.
- OCI stands for Overseas Citizen of India.
Strategic Planning and Investment Targets
A high-level expert panel will be formed to identify strategic semiconductor chips of national interest for targeted incentives. The panel will be co-chaired by the Principal Scientific Adviser and the National Security Adviser.
The government expects the scheme to attract about ₹4 lakh crore in investments and generate ₹2 lakh crore in production. The India Electronics and Semiconductor Association has estimated that the programme could catalyse more than ₹5 lakh crore in cumulative private and industry investments.
