Union Electronics and IT Minister Ashwini Vaishnaw recently affirmed that India has significantly advanced its semiconductor manufacturing capabilities, approving 12 new units with investments totaling $20 billion. This progress, he noted, stems from crucial lessons learned from past attempts, specifically addressing a 2005 AMD-backed project that reportedly collapsed due to customs delays.
India's Semiconductor Ambitions: A Look Back at 2005
In 2005, a consortium of Indian technologists, SemIndia Inc., planned a substantial $3 billion investment to establish a wafer fabrication facility in India, utilizing technology licensed from AMD. However, a social media post, to which Vaishnaw was responding, highlighted a critical failure point: imported semiconductor equipment allegedly became stuck at Indian ports, awaiting customs clearances and approvals from various government departments.
Reports suggested that escalating storage costs ultimately forced the companies to return the equipment to China, causing India to miss a pivotal opportunity to establish a domestic semiconductor manufacturing base. This incident underscored the bureaucratic hurdles and logistical challenges that plagued early efforts to build a chip ecosystem in the country.
Semicon India Program: Learning from the Past
Vaishnaw emphasized that the government has since "learnt from past attempts," implementing clearer policies and execution strategies. The Semicon India program, launched in 2022, is a direct result of this renewed approach. Under this initiative, 12 semiconductor units have been approved, attracting $20 billion in investment. The minister confirmed that three of these units are already actively producing chips, signaling tangible progress.
Semicon 2.0 and Future Growth
Building on the momentum of its initial phase, the Union Cabinet, led by Prime Minister Narendra Modi, approved the Semicon 2.0 program on July 15, 2026, with a substantial budget outlay of ₹1.27 lakh crore (approximately $15 billion). This enhanced program aims to further strengthen India's semiconductor design and manufacturing ecosystem through six key focus areas:
- Chip design
- Semiconductor machines and materials
- Additional fabrication plants
- Expansion of ATMP/OSAT (Assembly, Testing, Marking, and Packaging / Outsourced Semiconductor Assembly and Test) facilities
- Research and development
- Talent development
The government's vision is to position India as a significant global hub for semiconductor design and manufacturing, thereby fortifying supply chains, fostering economic growth, and boosting the nation's technological capabilities.
Progress Under Semicon 1.0
Under the initial India Semiconductor Mission, 12 manufacturing projects have received approval, representing cumulative investments exceeding ₹1.64 lakh crore (approximately $19.7 billion). These projects encompass diverse facilities, including:
- One silicon fabrication plant
- One silicon carbide fab
- An integrated gallium nitride Micro LED display fab
- Nine packaging units
These units are designed to cater to a broad spectrum of sectors, including consumer electronics, automobiles, telecommunications, aerospace, and industrial electronics. Notably, companies such as Micron, Kaynes, and CG Semi have already commenced commercial production, with another approved unit anticipated to begin operations in 2026, underscoring the rapid development within India's burgeoning semiconductor industry.