New Delhi, August 31: The Electronic System Design and Manufacturing (ESDM) industry has welcomed the government’s notification of the ₹1.27 lakh crore Semiconductor 2.0 scheme. The industry believes this initiative has the potential to attract over ₹5 lakh crore in cumulative private investment over the next five to seven years, significantly strengthening India’s semiconductor ecosystem.
The India Electronics and Semiconductor Association (IESA) stated that this program expands upon the existing Semiconductor India initiative. It aims to enhance India’s design and manufacturing capabilities by covering six key pillars of the semiconductor value chain.
IESA President Ashok Chandak noted that the official notification of Semiconductor 2.0 marks a significant milestone. He emphasized that the government’s swift action to notify the scheme following the central cabinet’s approval demonstrates a serious commitment to policy continuity, effective implementation, and long-term dedication.
Chandak highlighted that investments in the semiconductor industry typically consider a long-term horizon of 10 to 15 years. Therefore, policy stability is one of the most critical factors for investors. He believes this will bolster confidence among both domestic and global investors in India.
According to the industry body, the first phase of the semiconductor program has already instilled confidence in the sector. So far, 12 projects have received approval, over 100 design startups have been supported, and access to electronic design automation tools in educational institutions has been enhanced, laying a strong foundation.
IESA pointed out that the most notable feature of Semiconductor 2.0 is its comprehensiveness. The scheme encompasses the entire value chain, including chip design, semiconductor fabrication units, assembly, testing, packaging, equipment and material manufacturing, research and development, and skilled human resource development.
The industry has also welcomed the government’s decision to establish a high-level committee, co-chaired by the Principal Scientific Advisor (PSA) and the National Security Advisor (NSA), to identify strategically important semiconductor products. This will ensure that incentives are directed towards areas critical to national needs and strategic priorities.
Chandak further mentioned that considering the current investment pipeline and the expanded scope of the scheme, IESA estimates that Semiconductor 2.0 could attract over ₹5 lakh crore in investments across fabrication units, ATMP and OSAT facilities, equipment and material manufacturing, research and development (R&D), chip design, and supply chain-related sectors.
He stated that the government’s financial support should not only be viewed as subsidies but as a catalyst for attracting substantial private investment. The expansion of the semiconductor industry will also increase demand for machinery, specialty chemicals, packaging, logistics, and highly skilled human resources, benefiting the entire industrial ecosystem.
IESA also noted that Semiconductor 2.0 should be viewed in conjunction with initiatives like the Electronics Components Manufacturing Scheme (ECMS), Mobile Phone Manufacturing Scheme (MPMS), and Electronics Manufacturing Clusters (EMC). The combined impact of these initiatives could significantly boost domestic value addition, technological development, and self-reliant manufacturing in India.
The industry body congratulated Union Electronics and Information Technology Minister Ashwini Vaishnaw, Electronics and Information Technology Secretary S. Krishnan, India Semiconductor Mission CEO Amitesh Kumar Sinha, and the entire ministry team for the successful implementation of this initiative.
It is noteworthy that the government formally notified the Semiconductor 2.0 scheme on Monday, which will provide comprehensive financial and policy support for semiconductor design, chip manufacturing, packaging, testing, equipment manufacturing, research, and talent development.
Leave a Comment