India's chip development initiative has advanced to its next stage, encompassing an industrial framework that extends well beyond wafer fabrication and component assembly. The Semicon 2.0 initiative sets out to extend backing to roughly 200 chip-design firms and startups, alongside plans to equip around one lakh workers with skills for semiconductor fabrication and associated sectors.

On 15 July 2026, the Union Cabinet sanctioned the broadened initiative at a total expenditure of ₹1,27,500 crore. The initiative rests on six foundational areas: chip design, equipment and materials, new manufacturing facilities, advanced packaging, research and development, and workforce training.

The aim is to develop a domestic semiconductor supply chain spanning the full range of industry segments, extending government backing beyond fabrication plants and assembly, testing, and packaging operations. Speaking at SEMICON India 2026, Electronics and Information Technology Minister Ashwini Vaishnaw outlined how the second phase would broaden the design ecosystem, advance precision manufacturing capabilities, and develop the talent pipeline required to support the country's growing semiconductor sector.

Pledges totalling approximately ₹1 lakh crore have been recorded across the broader supply chain, spanning equipment manufacturers, raw material providers, and ancillary industries.

During its initial stage, India's semiconductor initiative directed its efforts toward building foundational production infrastructure, encompassing chip fabrication facilities alongside assembly, testing, marking, and packaging operations. The updated policy broadens its scope to direct greater attention toward the ancillary industries needed to sustain a domestic semiconductor manufacturing sector. The initiative now spans the entire pipeline, from conceptual design and research through to production equipment, processing materials, advanced packaging solutions, and the development of skilled workers.

Chip manufacturing facilities rely on a network of suppliers spanning advanced machinery, raw materials and chemicals, packaging services, engineering design, precision fabrication, and skilled technical workforces. The administration has outlined plans to establish an end-to-end semiconductor industry domestically, with stated goals of fortifying supply-chain stability and generating skilled, well-paid jobs across the sector.

Strengthening India's chip-design sector stands among the primary goals of Semicon 2.0. Prior to the launch of Semicon 2.0, over a hundred new ventures had been receiving state funding to advance chip development. Plans are in place to broaden that foundation to include approximately 200 chip design firms and emerging ventures. The focus is on motivating domestic firms to build original semiconductor intellectual property and market-ready products.

The country possesses a pool of semiconductor design talent and accounts for a considerable portion of the worldwide engineering footprint of leading chipmakers. Converting domestically developed engineering expertise into locally owned semiconductor designs, commercial products, and proprietary intellectual assets has been identified as a further objective. Over time, these firms could supply chip-based components across a range of sectors, including automotive, industrial, telecoms, defence, artificial intelligence, data infrastructure, energy, and consumer electronics.

Over one lakh engineering professionals spanning roughly 500 organisations — including those from universities and early-stage companies — have been granted access to chip design tools. Firms from the country taking part in these schemes have produced hundreds of semiconductor designs, while separate government-backed talent programmes have driven training and design work across universities and research bodies.

The initiative additionally prioritises building a trained talent pool to staff and run chip fabrication plants. Around one lakh skilled workers are to be trained under the scheme, covering roles in fabrication, packaging, testing, equipment upkeep, and associated precision-manufacturing functions. As semiconductor facilities shift from the building phase into active production, the labour pool supporting these operations is set to grow in relevance.

State-backed programmes had equipped thousands of engineering professionals and students with skills spanning chip design, semiconductor fabrication, and advanced packaging techniques by 2026. Where earlier iterations concentrated on cultivating design expertise, Semicon 2.0 aims to broaden participation across manufacturing, packaging, and technician-level positions.

Under Semicon 2.0, precision manufacturing has been identified as a priority area by the administration. Developing expertise in precision parts, tooling, gas-delivery systems, vacuum technology, and specialised mechanical assemblies has been identified as a potential pathway for domestic firms to enter the semiconductor supply chain without requiring them to produce complete fabrication machinery.

Under Semicon 2.0, the semiconductor equipment and materials sector receives its own standalone policy framework. The country relies on overseas suppliers for the vast majority of tools, chemicals, gases, and specialised materials used in semiconductor fabrication. Building capacity in key equipment and materials sectors has been cited as a means of reducing reliance on foreign suppliers while opening export opportunities for Indian engineering firms.

Advanced chip packaging technology has been highlighted as a key element of the Semicon 2.0 framework. Flip-chip packaging, system-in-package designs, and related advanced assembly techniques offer pathways to boost chip performance beyond what transistor miniaturisation alone can deliver. Foreign investment has been flowing into the country's assembly and packaging sector.

Innovation and research form a dedicated component of the Semicon 2.0 framework. Authorities aim to advance India's semiconductor industry beyond reliance on foreign technologies, building expertise across process engineering, materials science, advanced packaging, and chip design.

At SEMICON India 2026, officials disclosed that pledged investments across the broader semiconductor sector had reached around ₹1 lakh crore, spanning not only chip fabrication but also equipment suppliers, raw materials, and allied manufacturing segments. Several projects approved under Semicon 1.0 had moved into manufacturing or were well into their rollout phases by 2026.

Semiconductor partnerships between India and a range of partners — including the United States, Japan, the European Union, Singapore, and the Netherlands — have taken shape over recent years. The initiative aims to build on that groundwork by broadening engagement across a wider segment of the supply chain.