Semicon 2.0 notified: ₹1.27 lakh crore scheme widens India’s chip ambitions
Semicon 2.0, a ₹1.27 lakh crore programme, is aimed at building a broader semiconductor ecosystem spanning chip design, fabs, packaging, equipment, materials and R&D. The scheme widens eligibility to startups, MSMEs, manufacturers, research bodies and training institutions, with incentives varying across semiconductor segments.
- Aug 31, 2026,
- Updated Aug 31, 2026 3:19 PM IST
The Central government has formally notified Semicon 2.0, setting in motion a ₹1,27,500-crore programme aimed at expanding India’s semiconductor ecosystem beyond chip fabrication to include indigenous design and intellectual property, equipment, materials, advanced packaging, research and development and talent creation.
The notification follows the Union Cabinet’s approval of the India Semiconductor Mission 2.0 outlay on July 15, 2026. The Ministry of Electronics and Information Technology (MeitY) has outlined eligibility criteria and incentives for companies and institutions across six pillars and 10 categories.
Broader semiconductor ecosystem
IT Secretary S Krishnan said the time was right for India to move to the next stage of semiconductor development, with the scheme aimed at strengthening self-reliance and creating a globally competitive industry.
Unlike the first phase, Semicon 2.0 covers a wider range of participants, including chip-design startups and MSMEs, semiconductor fabs, packaging companies, materials and equipment manufacturers, research organisations and training institutions.
MUST READ: Semicon 2.0 explained: 6 ways India's ₹1.27 lakh crore chip strategy could reshape manufacturing
For commercial chip design, Indian companies owned or controlled by Indian citizens or Overseas Citizens of India (OCIs), including startups and MSMEs, will be eligible. Startups can receive seed funding, equity co-investment or other support, while larger companies can access royalty financing or equity co-investment.
Support for semiconductor fabs
For silicon wafer fabs, the government will provide 40% of eligible capital expenditure. Applicants must propose a 300-mm wafer facility with capacity of at least 40,000 wafer starts per month, possess production-grade licensed technology, invest at least ₹20,000 crore and have minimum revenue of ₹7,500 crore in at least one of the preceding three financial years.
The support is lower than the 50% offered under the first phase.
For compound semiconductor, photonics, sensor/MEMS and discrete semiconductor fabs, the minimum investment is ₹500 crore, with minimum revenue of ₹200 crore and capacity of at least 500 wafer starts per month. These projects will receive 35% of eligible capex. Display fabs, including OLED, Micro LED and LCD projects, will also receive 35% support, subject to technology-specific criteria.
| Category | Eligibility/investment requirement | Government assistance |
|---|---|---|
| Strategic chip design | Indian-owned and controlled companies with substantial operations and workforce in India | Support based on a competitive RfP |
| Commercial chip design | Indian companies owned/controlled by citizens or OCIs, including startups and MSMEs | Seed funding, equity co-investment or royalty financing |
| Chip deployment | Newly launched chips, IPs or SoCs with no previous sales | 9% of net sales for five years |
| Silicon wafer fabs | Minimum ₹20,000 crore investment, ₹7,500 crore revenue; 300-mm wafers and at least 40,000 wafer starts per month | 40% of eligible capex |
| Compound, photonics & sensor fabs | Minimum ₹500 crore capex and ₹200 crore revenue; at least 500 wafer starts per month | 35% of eligible capex |
| Display fabs | Projects involving OLED, Micro LED or LCD technologies, subject to specified thresholds | 35% of eligible capex |
| ATMP/OSAT facilities | Minimum ₹1,000 crore capex and ₹200 crore revenue | 35% for advanced packaging; 25% for legacy packaging |
| Equipment & materials | Requirements vary by segment, with capex thresholds ranging from ₹50 crore to ₹300 crore | Up to 30% capex support for specified segments, plus equipment PLI |
| Advanced semiconductor R&D | Semiconductor companies, either independently or with academic/R&D partners | Up to 75% of project cost |
| Talent development | Academic institutions, research bodies, laboratories and domestic training organisations | Up to 75% of project cost |
Packaging, equipment and materials included
Semicon 2.0 will also support advanced and conventional ATMP/OSAT facilities, with incentives of 35% of capex for advanced packaging and 25% for conventional packaging. Eligible applicants in this category need a minimum capex of ₹1,000 crore and revenue of ₹200 crore.
Equipment and materials companies can also participate. The thresholds include ₹300 crore capex and ₹120 crore revenue for semiconductor equipment R&D and equipment, sub-assembly and component manufacturing. Semiconductor-grade raw-material projects require ₹50 crore capex and ₹20 crore revenue, while test and characterisation facilities require ₹100 crore and ₹40 crore, respectively.
Equipment manufacturers will additionally receive a PLI of 10%, 8%, 6%, 4% or 2% of the value of bills of materials sourced from domestic manufacturers for five years from FY29, subject to a ceiling of 50% of eligible capex.
ALSO READ: Cabinet approves Semicon 2.0 with budget outlay of ₹1.27 lakh crore
Startups and R&D
Eligible chip-design startups and MSMEs can access the Design Infrastructure Support framework, including national EDA tools and multi-project wafer fabrication services. They can also seek seed funding of up to ₹15 crore, capped at 50% of project cost.
The scheme provides up to 75% of project costs for advanced semiconductor R&D and talent-development projects, subject to project-specific conditions.
The government had earlier approved 12 semiconductor projects across six states under the first phase. Micron’s ATMP plant, Kaynes Semicon and CG Semi’s OSAT facility have already commenced commercial production, according to the government.
MUST WATCH: Semicon 2.0: Cabinet Clears ₹1.27 Lakh Crore Push To Build India’s Chip Powerhouse
The Central government has formally notified Semicon 2.0, setting in motion a ₹1,27,500-crore programme aimed at expanding India’s semiconductor ecosystem beyond chip fabrication to include indigenous design and intellectual property, equipment, materials, advanced packaging, research and development and talent creation.
The notification follows the Union Cabinet’s approval of the India Semiconductor Mission 2.0 outlay on July 15, 2026. The Ministry of Electronics and Information Technology (MeitY) has outlined eligibility criteria and incentives for companies and institutions across six pillars and 10 categories.
Broader semiconductor ecosystem
IT Secretary S Krishnan said the time was right for India to move to the next stage of semiconductor development, with the scheme aimed at strengthening self-reliance and creating a globally competitive industry.
Unlike the first phase, Semicon 2.0 covers a wider range of participants, including chip-design startups and MSMEs, semiconductor fabs, packaging companies, materials and equipment manufacturers, research organisations and training institutions.
MUST READ: Semicon 2.0 explained: 6 ways India's ₹1.27 lakh crore chip strategy could reshape manufacturing
For commercial chip design, Indian companies owned or controlled by Indian citizens or Overseas Citizens of India (OCIs), including startups and MSMEs, will be eligible. Startups can receive seed funding, equity co-investment or other support, while larger companies can access royalty financing or equity co-investment.
Support for semiconductor fabs
For silicon wafer fabs, the government will provide 40% of eligible capital expenditure. Applicants must propose a 300-mm wafer facility with capacity of at least 40,000 wafer starts per month, possess production-grade licensed technology, invest at least ₹20,000 crore and have minimum revenue of ₹7,500 crore in at least one of the preceding three financial years.
The support is lower than the 50% offered under the first phase.
For compound semiconductor, photonics, sensor/MEMS and discrete semiconductor fabs, the minimum investment is ₹500 crore, with minimum revenue of ₹200 crore and capacity of at least 500 wafer starts per month. These projects will receive 35% of eligible capex. Display fabs, including OLED, Micro LED and LCD projects, will also receive 35% support, subject to technology-specific criteria.
| Category | Eligibility/investment requirement | Government assistance |
|---|---|---|
| Strategic chip design | Indian-owned and controlled companies with substantial operations and workforce in India | Support based on a competitive RfP |
| Commercial chip design | Indian companies owned/controlled by citizens or OCIs, including startups and MSMEs | Seed funding, equity co-investment or royalty financing |
| Chip deployment | Newly launched chips, IPs or SoCs with no previous sales | 9% of net sales for five years |
| Silicon wafer fabs | Minimum ₹20,000 crore investment, ₹7,500 crore revenue; 300-mm wafers and at least 40,000 wafer starts per month | 40% of eligible capex |
| Compound, photonics & sensor fabs | Minimum ₹500 crore capex and ₹200 crore revenue; at least 500 wafer starts per month | 35% of eligible capex |
| Display fabs | Projects involving OLED, Micro LED or LCD technologies, subject to specified thresholds | 35% of eligible capex |
| ATMP/OSAT facilities | Minimum ₹1,000 crore capex and ₹200 crore revenue | 35% for advanced packaging; 25% for legacy packaging |
| Equipment & materials | Requirements vary by segment, with capex thresholds ranging from ₹50 crore to ₹300 crore | Up to 30% capex support for specified segments, plus equipment PLI |
| Advanced semiconductor R&D | Semiconductor companies, either independently or with academic/R&D partners | Up to 75% of project cost |
| Talent development | Academic institutions, research bodies, laboratories and domestic training organisations | Up to 75% of project cost |
Packaging, equipment and materials included
Semicon 2.0 will also support advanced and conventional ATMP/OSAT facilities, with incentives of 35% of capex for advanced packaging and 25% for conventional packaging. Eligible applicants in this category need a minimum capex of ₹1,000 crore and revenue of ₹200 crore.
Equipment and materials companies can also participate. The thresholds include ₹300 crore capex and ₹120 crore revenue for semiconductor equipment R&D and equipment, sub-assembly and component manufacturing. Semiconductor-grade raw-material projects require ₹50 crore capex and ₹20 crore revenue, while test and characterisation facilities require ₹100 crore and ₹40 crore, respectively.
Equipment manufacturers will additionally receive a PLI of 10%, 8%, 6%, 4% or 2% of the value of bills of materials sourced from domestic manufacturers for five years from FY29, subject to a ceiling of 50% of eligible capex.
ALSO READ: Cabinet approves Semicon 2.0 with budget outlay of ₹1.27 lakh crore
Startups and R&D
Eligible chip-design startups and MSMEs can access the Design Infrastructure Support framework, including national EDA tools and multi-project wafer fabrication services. They can also seek seed funding of up to ₹15 crore, capped at 50% of project cost.
The scheme provides up to 75% of project costs for advanced semiconductor R&D and talent-development projects, subject to project-specific conditions.
The government had earlier approved 12 semiconductor projects across six states under the first phase. Micron’s ATMP plant, Kaynes Semicon and CG Semi’s OSAT facility have already commenced commercial production, according to the government.
MUST WATCH: Semicon 2.0: Cabinet Clears ₹1.27 Lakh Crore Push To Build India’s Chip Powerhouse