The second phase of India Semiconductor Mission — Semicon 2.0 — will focus on creating a sustainable semiconductor ecosystem and ensuring that designing, manufacturing, and packaging semiconductor chips move up the value chain and that Made in India products find a ready market, a senior government official said. This upcoming phase will also focus on funding players to provide the equipment, materials, and gases needed for semiconductor manufacturing.
“The next phase of the India Semiconductor Mission (ISM) is currently in the works. We had preliminary discussions with many stakeholders as to how to design the programme. The design and the outline is currently ready and is undergoing detailed discussion internally within the government,” S Krishnan, Secretary, Ministry of Electronics and Information Technology (MeitY), said while addressing the second day of the Gujarat SemiConnect event being held at Gandhinagar, Gujarat.
In his virtual address to the gathering, Krishnan pointed out that under Semicon 1.0, the Government of India had focussed on mature technologies, where the “risks” were limited. “We need to figure out how to make it a sustainable ecosystem and also how we move up the value chain. Under the first phase of ISM we have one major SEMOS fab and one or two compound semiconductor fabs may also get considered. We have to work towards more of those (in the second phase). We also need materials, equipment and gases which are needed to support the entire ecosystem around semiconductor manufacturing. This was not explicitly supported in the first phase of ISM, primarily because we had the SPECS (Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors) which closed on March 31, 2024. So we will have to cover all these ecosystem investments as well to see that they are effectively supported and they come up alongside the manufacturing bases. The government is focusing on all the elements starting from design, materials, gases, equipment, manufacturing of semiconductor, creation of human resources, making sure that the chips manufactured in the country will have a ready market,” he said while revealing details of some of the areas that the Government of India is focussed on for the Semicon 2.0.
Phase-1 of ISM
Phase-1 of India Semiconductor Mission or Semicon 1.0 was notified in December 2021 with a total outlay of ₹76,000 crore. It had three large components. This included support for establishing fabs, ATMPs, and OSATs, which had roughly an outlay of about ₹65,000 crore. This second portion was to modernise the semiconductor laboratories based in Mohali for which an outlay of ₹10,000 crore was provided. The third component was the design-linked incentive scheme with an outlay of ₹1000 crore, which was meant to establish a design ecosystem for the country. “Out of the Rs 65000 crore, we have committed more than Rs 60000 crore to the five major semiconductor units which are currently under construction. In addition we have a few more projects that are currently under evaluation and are expected to be awarded quickly. Applications under ISM-1 are closed,” Krishnan said.
Changes in design-linked incentives
Under SEMICON 2.0, The design-led incentive scheme is undergoing further changes to ensure it can support more ambitious design-linked innovations and initiatives in the country. “In addition to the designing of the chips itself, there is packaging design which also needs to move alongside. We need to look at how advanced packaging can be supported through the design linked scheme,” the Meity secretary said.
Support for HR
Pointing out that India has inked MoUs with Singapore, Japan, Germany, Taiwan, Netherlands and the European Union to train our human resources in various aspects of the semiconductor value-chain, Krishnan said, “One critical element in the manufacturing segment is the need for having outstanding human resources which can handle this kind of advanced and sophisticated techniques. So training and skill building will continue to receive support from the government through targeted efforts. The Government of India is fully committed to make sure that steps taken in the semiconductor field are fully realised through continued support and action. There is a lot of interest not just in Gujarat, but in other states as to how they can contribute to the semiconductor industry.”
Under construction projects
Under Semicon 1.0, the government has cleared five proposals, including one Tata Group chip fabrication unit and four chip assembly units. Tata Electronics, in partnership with Taiwan’s Powerchip Semiconductor Manufacturing Corporation, is already constructing India’s first AI-enabled semiconductor fabrication unit at Dholera in Gujarat, with an investment of ₹91,000 crore.
Micron Technology’s ATMP unit in Sanand, Gujarat, is expected to produce its first chip in 2025. Tata Group is building a similar facility in Assam with an investment of ₹27,000 crore. CG Power in collaboration with foreign partners laid the foundation stone for a ₹7,600 crore ATMP unit at Sanand in Gujarat. Similarly, Kaynes Technology is setting up an ATMP unit in Gujarat with an ₹3,300 crore investment.