New Delhi, Sept 2026 : India’s semiconductor ecosystem has expanded significantly over the past five years, moving from having no commercial chip fabrication plant in 2021 to a stage where 12 semiconductor units have been approved and five are already in production in 2026, according to a government factsheet released on the occasion of SEMICON India 2026.
The factsheet said the country’s semiconductor journey is entering its next phase with Semicon 2.0, which builds on the infrastructure and capabilities created under the first phase rather than starting from scratch.
Semiconductors are fundamental to modern electronic systems and are used in smartphones, computers, medical equipment, automobiles, defence platforms, satellites and data centres. Developing a domestic semiconductor ecosystem is therefore considered important for technological resilience, economic security and reducing dependence on overseas supply chains.
The Union Cabinet approved Semicon 2.0 on July 15, 2026, with a financial outlay of ₹1,27,500 crore. While Semicon 1.0 focused on establishing the foundation for domestic semiconductor manufacturing, the second phase is designed to expand the ecosystem across the broader chip value chain.
According to the factsheet, Semicon 2.0 will focus on six strategic areas: chip design, machines and materials, new fabrication facilities, advanced packaging, research and development, and talent development. Strengthening the ATMP/OSAT ecosystem is also a key component of the programme.
The government said India is witnessing rapidly increasing demand for semiconductor products. The domestic semiconductor market is projected to reach $110 billion by FY2030 and exceed $200 billion by FY2035. At present, however, domestic manufacturing remains at an early stage.
India imported semiconductor products worth nearly $150 billion between FY2017 and FY2025, with imports growing at a compound annual growth rate of around 23 per cent during the period. If the trend continues, annual semiconductor imports could reach approximately $240 billion by 2035, highlighting the scale of the challenge and the need to expand domestic production.
The government said Semicon 2.0 aims to establish a more complete semiconductor value chain within India rather than focusing only on the final stages of manufacturing. Such an ecosystem would encompass design, materials, equipment, fabrication, packaging, research and skilled manpower.
The global semiconductor market has also expanded steadily. According to the factsheet, the industry recorded a compound annual growth rate of 6.5 per cent between 2014 and 2024 and is projected to grow at around 8.5 per cent annually over the next five to 10 years.
However, recent disruptions in global supply chains have exposed vulnerabilities in the semiconductor industry. Geopolitical tensions have further highlighted the risks associated with dependence on concentrated international supply networks.
The government acknowledged that semiconductor manufacturing is among the world’s most complex industrial activities and requires substantial investment, technical expertise, precision and sustained policy support.
With Semicon 2.0, the government aims to strengthen India’s position across the semiconductor value chain while creating opportunities for high-skilled employment. The initiative is also expected to expand opportunities for students and young engineers as chip-design and semiconductor-related programmes grow across educational institutions.
The government factsheet said the long-term impact could include greater domestic production of electronic devices, reduced dependence on overseas supply chains and increased availability of high-value technology jobs within India.
