What Happened
- The government highlighted that the Semicon India Programme is being developed to create a complete semiconductor ecosystem — covering chip design, fabrication, assembly, testing, marking, and packaging (ATMP).
- The initiative is guided by the Prime Minister's AtmaNirbhar Bharat vision, aiming to make India a global electronics manufacturing hub by building every layer of the semiconductor value chain domestically.
- 10 semiconductor projects have been approved under the programme, with investment commitments of approximately ₹1.6 lakh crore; one unit has commenced commercial production, and three facilities are currently running pilot lines.
- The Union Budget 2026–27 proposed India Semiconductor Mission 2.0, expanding the scope to include semiconductor equipment manufacturing, materials production, full-stack chip design, and Indian intellectual property development.
Static Topic Bridges
Semicon India Programme and the India Semiconductor Mission
The Semicon India Programme was formally launched in 2022 with a total government outlay of ₹76,000 crore to support semiconductor and display manufacturing in India. It operates through the India Semiconductor Mission (ISM), which functions as a specialized and empowered body under the Ministry of Electronics and Information Technology (MeitY). The programme provides fiscal support of up to 50% of project cost for Silicon CMOS-based semiconductor fabrication plants under the Modified Scheme for Semiconductor Fabs. It also runs a Design Linked Incentive (DLI) Scheme, offering up to 50% of eligible expenditure (capped at ₹15 crore) for product design, and deployment-linked incentives of 4–6% of net sales over 5 years (capped at ₹30 crore).
- Total programme outlay: ₹76,000 crore
- Fiscal support: 50% of project cost for fab units (pari-passu basis)
- DLI Scheme: Up to ₹15 crore for product design, ₹30 crore deployment-linked
- India Semiconductor Mission 2.0 proposed in Budget 2026–27 with ₹8,000 crore allocation
- 10 projects approved; includes 2 fabrication plants and 8 ATMP/OSAT units
Connection to this news: The PIB release underscores that Semicon India is not merely about assembly but about developing a vertically integrated ecosystem — from chip design through manufacturing — aligning with the 2026–27 budget's Mission 2.0 thrust.
Design vs. Manufacturing: The Chip Value Chain Distinction
Semiconductor production is a highly specialised, multi-stage process. Chip design involves creating the circuit architecture (logic, memory, analog), typically done using Electronic Design Automation (EDA) tools. Fabrication (or "fab") is the physical manufacturing of chips using photolithography and chemical deposition processes on silicon wafers. Assembly, Testing, Marking, and Packaging (ATMP) is the back-end process where chips are assembled into usable components. India has historically had strengths in chip design (companies like Qualcomm, Intel, and Texas Instruments have large design centres in India) but has lacked domestic fabrication capacity.
- Global semiconductor value chain: Design → Wafer fabrication → ATMP → Module manufacturing
- India's existing strength: Chip design (EDA, IP blocks, system-on-chip design)
- India's gap: Wafer fabrication (capital-intensive, requires cleanroom infrastructure)
- Micron Technology's ATMP plant in Sanand, Gujarat is among the first approved units
- Global foundry leaders: TSMC (Taiwan), Samsung (South Korea), Intel (USA)
Connection to this news: The government's strategy explicitly targets the full stack — from design to manufacturing — to overcome India's historical dependence on imported chips and to reduce vulnerability to global supply chain disruptions like those exposed during the COVID-19 semiconductor shortage.
SPECS Scheme and Electronics Component Manufacturing
The Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS), notified in April 2020, provides a 25% financial incentive on capital expenditure for producing downstream electronic components including printed circuit boards (PCBs), camera modules, connectors, optical transceivers, and sub-assemblies. It operates under the National Policy on Electronics 2019 (NPE 2019) and complements the PLI scheme by targeting the component layer — not final products. The Electronics Component Manufacturing Scheme (ECMS), approved in 2025, further expanded this support with a ₹40,000 crore budgetary allocation over six years, increased by 75% from the original ₹22,919 crore.
- SPECS: 25% incentive on capex for electronic components and semiconductor sub-assemblies
- ECMS: ₹40,000 crore over 6 years (75% increase from original ₹22,919 crore)
- Over 82 players attracted to set up manufacturing facilities under ECMS
- NPE 2019: Policy framework targeting $400 billion electronics production and $190 billion exports by 2025
Connection to this news: SPECS and ECMS directly support the component layer of the semiconductor value chain, filling the gap between final product assembly (PLI) and chip fabrication (Semicon India) — together forming a three-tiered government intervention across the electronics manufacturing ecosystem.
Key Facts & Data
- Semicon India Programme outlay: ₹76,000 crore
- Investment commitments from approved projects: ~₹1.6 lakh crore
- India Semiconductor Mission 2.0 allocation (Budget 2026–27): ₹8,000 crore
- Approved units: 10 (2 fabs, 8 ATMP/OSAT)
- Commercial production commenced: 2 plants (Micron, Kaynes)
- DLI Scheme: Up to ₹15 crore product design incentive, ₹30 crore deployment-linked
- ECMS allocation: ₹40,000 crore over 6 years
- India's electronics production has reached ₹12 lakh crore