Semicon 2.0 Draws $12 Billion Investment Interest as India Expands Semiconductor Ecosystem
India’s semiconductor programme is entering a new phase, with investment proposals worth around $11–12 billion, or nearly ₹1 lakh crore, emerging under Semicon 2.0. Union Electronics and Information Technology Minister Ashwini Vaishnaw announced the investment interest at SEMICON India 2026, with the proposed investments expected to come into the sector over the next two to three years. The proposals cover areas including semiconductor equipment, materials, gases, chemicals and substrates.
The development comes as India seeks to build a semiconductor ecosystem extending beyond chip fabrication. The focus is increasingly moving towards the complete value chain, including chip design, manufacturing, advanced packaging, research, equipment, specialised materials and skilled manpower.
Semicon 2.0 Focuses on the Complete Value Chain
Semicon 2.0 has been designed around six broad areas: chip design, semiconductor machinery and materials, fabrication, advanced packaging, research and development, and talent development. The programme has an approved outlay of about ₹1.27 lakh crore and aims to strengthen capabilities across different stages of semiconductor production.
The approach reflects the complexity of semiconductor manufacturing. A modern chip industry requires not only fabrication plants but also specialised equipment, high-purity chemicals and gases, packaging facilities, testing infrastructure, design capabilities and a highly trained workforce. The government has set an objective of creating around one lakh jobs and training more than one lakh technicians over five years.
Global Companies Deepen Their India Presence
The latest investment interest is accompanied by major corporate announcements. US semiconductor equipment manufacturer Applied Materials has announced plans to invest $5 billion in India through 2035. The company intends to expand research and development, strengthen the semiconductor supply chain and develop talent, including through a proposed 140-acre advanced semiconductor research park in Bengaluru.
Lam Research has also announced plans involving approximately ₹10,000 crore for India, including a proposed silicon-component manufacturing facility and expansion of its research and development operations. These developments add an important equipment and technology dimension to India's semiconductor ambitions.
Tata Electronics Expands the Supplier Network
Tata Electronics is also working to strengthen the ecosystem surrounding semiconductor manufacturing. The company has entered into multiple agreements connected with materials, chemicals, suppliers and supporting infrastructure. Its semiconductor plans in Gujarat and Assam are part of a wider effort to establish manufacturing and supply-chain capabilities within India.
The development of local suppliers is particularly significant because semiconductor manufacturing depends on a large network of specialised companies. Equipment, chemicals, gases, components and other materials have to meet extremely demanding standards. Building these capabilities domestically could provide Indian companies with opportunities to participate more deeply in semiconductor supply chains.
Building on the Progress of Semicon 1.0
Semicon 2.0 builds on the projects approved under the first phase of India's semiconductor programme. According to government figures, 12 manufacturing projects have been approved under Semicon 1.0, involving investments of more than ₹1.64 lakh crore. Three projects have already entered commercial production.
The transition from project approvals to commercial production represents an important stage for the industry. Semiconductor facilities require significant time for construction, equipment installation, testing and customer qualification before they can reach large-scale production.
Micron has already begun commercial production of semiconductor memory modules in Sanand, Gujarat, while other facilities are also progressing towards commercial operations. These developments are creating an initial base for India's semiconductor manufacturing ecosystem.
Growing Demand for Semiconductor Technology
India's semiconductor ambitions are also being driven by rising demand from electronics, automobiles, telecommunications, artificial intelligence, data centres and other technology-intensive sectors. Reuters reported that India's semiconductor consumption is expected to reach around $110 billion by 2030.
As electronics manufacturing expands, access to reliable semiconductor supplies is becoming increasingly important. A stronger domestic ecosystem could support manufacturers while creating opportunities for companies involved in chip design, packaging, equipment, materials and related engineering services.
From Chip Factories to a Broader Technology Ecosystem
The theme of SEMICON India 2026, “Silicon to Systems: Building the Ecosystem,” reflects the wider direction of India's semiconductor strategy. The event has brought together more than 600 companies and participants from 52 countries, highlighting the international nature of the semiconductor supply chain.
The emphasis on an end-to-end ecosystem also creates opportunities beyond traditional semiconductor manufacturing. Startups and MSMEs are being encouraged to develop chip designs and semiconductor technologies, while research institutions and universities are being integrated into workforce and innovation programmes.
The Road Ahead
The latest investment proposals provide further momentum to India's semiconductor ambitions, but their long-term impact will depend on implementation. Converting investment commitments into operational facilities, developing reliable domestic suppliers, expanding skilled manpower and achieving commercial-scale production will be important milestones for the sector.
India's semiconductor strategy is consequently moving from attracting individual projects towards building a connected industrial ecosystem. The combination of domestic companies, global technology firms, research institutions and government-supported programmes is creating a broader foundation for semiconductor manufacturing and related industries.
The MGMM Outlook
Semicon 2.0 reflects the growing depth of India’s semiconductor ambitions, with the focus extending beyond chip fabrication to design, advanced packaging, equipment, materials, research and skilled talent. The proposed $11–12 billion in investment interest, alongside commitments from global companies such as Applied Materials and Lam Research and the expanding role of Tata Electronics, indicates increasing participation across different parts of the semiconductor value chain. The progress of projects approved under Semicon 1.0, including the start of commercial production by Micron, further provides an emerging foundation for the sector.
The development also highlights the importance of building a complete and connected semiconductor ecosystem within India. As demand for semiconductors grows across electronics, automobiles, telecommunications, artificial intelligence and data centres, strengthening domestic capabilities can create opportunities for manufacturers, startups, MSMEs, researchers and skilled professionals. With continued investment in infrastructure, technology, supplier networks and talent development, Semicon 2.0 can further support India's participation in global semiconductor supply chains while contributing to the country's broader technology and manufacturing ecosystem.
(Sources: Moneycontrol, Indian Express, Financial Express)
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