{"id":113959,"date":"2026-07-19T10:51:33","date_gmt":"2026-07-19T05:21:33","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=113959"},"modified":"2026-07-19T12:56:42","modified_gmt":"2026-07-19T07:26:42","slug":"semicon-2-0","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/semicon-2-0\/","title":{"rendered":"Semicon 2.0: India&#8217;s Next Leap Towards a Self-Reliant Semiconductor Ecosystem"},"content":{"rendered":"<h2><b>Semicon 2.0 Latest News<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Recently, the Union Cabinet cleared the second phase of the <\/span><a href=\"https:\/\/vajiramandravi.com\/current-affairs\/india-semiconductor-mission-ism\/\" target=\"_blank\"><span style=\"font-weight: 400;\">India Semiconductor Mission (ISM)<\/span><\/a><span style=\"font-weight: 400;\">, along with the <\/span><a href=\"https:\/\/vajiramandravi.com\/current-affairs\/mobile-phone-manufacturing-scheme\/\" target=\"_blank\"><span style=\"font-weight: 400;\">Mobile Phone Manufacturing Scheme (MPMS)<\/span><\/a><span style=\"font-weight: 400;\">, with outlays of \u20b91.27 lakh crore and \u20b962,500 crore respectively.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Together, the schemes aim to expand semiconductor fabrication, assembly, and packaging facilities in India, while boosting phone assembly and component manufacturing.<\/span><\/li>\n<\/ul>\n<h2><b>Targets Under the New Scheme<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Over its five-year tenure, the government expects the scheme to draw:<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">\u20b94 lakh crore in investment<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">\u20b92 lakh crore in production<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">\u20b91 lakh crore in exports<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2><b>How Is This Different from Phase 1?<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">ISM&#8217;s first phase was approved in <\/span><b>December 2021<\/b><span style=\"font-weight: 400;\"> with an <\/span><b>outlay<\/b><span style=\"font-weight: 400;\"> of \u20b976,000 crore.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">A 2022 amendment allowed it to offer up to <\/span><b>50% capital subsidy<\/b><span style=\"font-weight: 400;\"> for large projects, such as Micron&#8217;s memory chip packaging facility in Sanand, Gujarat.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Funds were also channelled into the <\/span><b><i>Electronics Component Manufacturing Scheme<\/i><\/b><span style=\"font-weight: 400;\">, aimed at incentivising smaller component manufacturing.<\/span><\/li>\n<\/ul>\n<h3><b>Key changes in Phase 2 (Semicon 2.0)<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Broader scope:<\/b><span style=\"font-weight: 400;\"> Covers a larger part of the electronics ecosystem, including chip design talent, capital machinery (equipment used in chip-making), semiconductor-grade chemicals and gases, and R&amp;D efforts.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Lower subsidies:<\/b><span style=\"font-weight: 400;\"> Capital subsidies have been trimmed to 30-40%, as officials believe India&#8217;s semiconductor industry is becoming attractive even with reduced incentives.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Reduced land support:<\/b><span style=\"font-weight: 400;\"> The Union government is less likely to offer land assistance, as State governments have increasingly stepped in with land at token prices and their own additional incentives.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The precise details of Phase 2 will be laid out in a Gazette notification expected next month.<\/span><\/li>\n<\/ul>\n<h2><b>What Has Phase 1 Achieved So Far?<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">12 manufacturing and packaging units were approved, with a total committed investment of \u20b91.64 lakh crore.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Most of these are semiconductor packaging units, spread across Gujarat, Uttar Pradesh, Punjab, Assam, Odisha, and Andhra Pradesh.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The list also includes one silicon fabrication unit and one gallium-nitride Micro LED display fabrication unit.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The Tata Electronics fab is set to begin commercial production in 2028.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">A design-linked incentive programme approved 24 projects.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The government secured licences for costly semiconductor design software and provided them free to universities and startups.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The Semiconductor Lab, Mohali, is being revamped to help students and researchers &#8220;tape out&#8221; (finalise for manufacturing) their chip designs.<\/span><\/li>\n<\/ul>\n<h2><b>Why Is India Focusing on Semiconductor Manufacturing?<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The push stems from lessons learned through recent global disruptions:<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">COVID-19-era supply chain breakdowns exposed India&#8217;s vulnerabilities.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">U.S. export controls during its trade tensions with China highlighted the risks of weak integration into global electronics value chains.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The government maintains that building domestic capacities is essential, even if it takes decades to match countries like the <\/span><b>Netherlands and Taiwan<\/b><span style=\"font-weight: 400;\">, whose companies remain critical to global chipmaking.<\/span><\/li>\n<\/ul>\n<h2><b>How Advanced Are the Targeted Chips?<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">While the most powerful phones use <\/span><b>&#8220;frontier&#8221; grade chips<\/b><span style=\"font-weight: 400;\"> with a process node of 7 nanometres or smaller, India&#8217;s current focus is on <\/span><b>28nm chips<\/b><span style=\"font-weight: 400;\">, made using what are called &#8220;legacy&#8221; process nodes.\u00a0<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">IT Minister Ashwini Vaishnaw noted there is a massive market for these chips, since everyday electronics, where size and computing power are not critical constraints, rely heavily on them.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">As ISM 2.0 progresses, the government hopes to <\/span><b>move the ecosystem toward frontier nodes<\/b><span style=\"font-weight: 400;\">, particularly by strengthening domestically-owned intellectual property and research.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Currently, while India has many semiconductor designers, most work for foreign firms or on their behalf, meaning royalties and expertise largely stay outside the domestic industry.<\/span><\/li>\n<\/ul>\n<h2><b>Why the Mobile Phone Manufacturing Scheme (MPMS)?<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Although a growing share of global iPhone sales come from India-assembled handsets, most components remain imported, and Indian-designed handsets are virtually absent from the market.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The MPMS seeks to:<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Expand domestic phone assembly to grow the ancillary component market.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Incentivise domestic design and R&amp;D.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The scheme offers incentives ranging from 2.25% to 5%, depending on the extent of local design involved in the handsets.<\/span><\/li>\n<\/ul>\n<h2><b>Conclusion<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Semicon 2.0 marks India&#8217;s shift from simply attracting chip packaging units to building a deeper, more self-reliant electronics ecosystem, spanning design, machinery, and R&amp;D.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Its success will hinge on whether India can move beyond legacy-node manufacturing toward owning the intellectual property and expertise that define frontier chipmaking.<\/span><\/li>\n<\/ul>\n<p><b>Source:<\/b> <strong><a href=\"https:\/\/www.thehindu.com\/business\/cabinet-okays-semicon-20-mobile-phone-manufacturing-scheme-highways-and-urea-plants\/article71226334.ece\" target=\"_blank\" rel=\"nofollow noopener\">TH<\/a> | <a href=\"https:\/\/www.pib.gov.in\/PressReleasePage.aspx?PRID=2284784&amp;reg=48&amp;lang=1\" target=\"_blank\" rel=\"nofollow noopener\">PIB<\/a> | <a href=\"https:\/\/ism.gov.in\/schemes\/semicon2.0\/index\" target=\"_blank\" rel=\"nofollow noopener\">ISM<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Semicon 2.0 strengthens semiconductor manufacturing, design and R&#038;D to advance India&#8217;s technological self-reliance.<\/p>\n","protected":false},"author":18,"featured_media":114003,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[18],"tags":[60,8789,22,59],"class_list":["post-113959","post","type-post","status-publish","format-standard","has-post-thumbnail","category-upsc-mains-current-affairs","tag-mains-articles","tag-semicon-2-0","tag-upsc-current-affairs","tag-upsc-mains-current-affairs-tag","no-featured-image-padding"],"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/113959","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/18"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=113959"}],"version-history":[{"count":4,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/113959\/revisions"}],"predecessor-version":[{"id":114004,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/113959\/revisions\/114004"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/114003"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=113959"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=113959"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=113959"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}