India widens chip push with $13.5 billion second phase

Prime Minister Narendra Modi on Thursday, 17 September, outlined the next phase of India’s chip push, backed by ₹1.275 trillion, or about $13.5 billion, as the government seeks to build more of the semiconductor supply chain inside the country.

Speaking at the opening of SEMICON India 2026 in New Delhi, Modi said 12 semiconductor manufacturing projects have been approved and the next phase will broaden support beyond fabrication into design, intellectual property, equipment, chemicals, gases and materials.

The cabinet approved Semicon 2.0 on 15 July with an outlay of ₹1.275 trillion, substantially larger than the ₹76,000 crore (about $7.9 billion) committed to the original Semicon India program launched in 2021.

The second phase is intended to deepen domestic chip design, expand fabrication and advanced packaging and develop the suppliers of equipment and materials needed by semiconductor plants.

“The world is looking for new and trusted manufacturing destinations. India is steadily preparing itself to meet this need,” Modi said.

India has approved 12 semiconductor manufacturing projects representing more than ₹1.64 trillion in proposed investment under the first phase. They include a silicon fabrication plant, a silicon-carbide facility, a gallium-nitride micro-LED display project and nine packaging facilities. Three projects, operated by Micron, Kaynes and CG Semi, have begun commercial production, according to the government.

The figures show how India’s strategy has shifted from attracting individual fabrication plants toward developing a wider domestic supply chain.

Semiconductor manufacturing requires specialized machinery, chemicals, gases, packaging and testing capacity, much of which is concentrated in a relatively small number of countries and companies.

Modi urged semiconductor companies to conduct more research and development in India and called for greater participation by fabless chip companies and suppliers across the manufacturing chain.

Chip design is another focus of the second phase. The government says 24 semiconductor design projects have received financial support under the first program, while 105 startups and smaller companies have been given access to industry-standard electronic-design-automation tools.

Their projects include chips for artificial intelligence, telecommunications, drones, satellite communications, smart meters and internet-connected devices.

Modi said artificial intelligence is changing the semiconductor industry’s requirements, shifting attention beyond transistor size to areas including memory placement, heat management and wider system integration.

AI is also raising electricity requirements from data centers and semiconductor plants. Modi said India’s solar capacity has climbed above 160 GW and pointed to plans to increase nuclear generation and develop small modular reactors.

India is also trying to expand the workforce needed to support the industry. Modi said about 70,000 engineering students have been trained toward a target of 100,000 and urged Indian researchers at home and abroad to work on advanced technologies in the country.

The government has said it wants India’s domestic semiconductor market to reach about $200 billion by 2035, although that is a policy target rather than an independent industry forecast.

SEMICON India 2026 runs from September 17 to 19 at Yashobhoomi in New Delhi under the theme “Silicon to Systems, Building the Ecosystem.” The fifth edition has more than 600 participating companies and representatives from 52 countries, with more than 400 executives and 150 speakers expected to attend.