India has received investment proposals worth nearly $12 billion under Semicon 2.0, the second phase of the India Semiconductor Mission. The proposals cover equipment, materials, gases, chemicals, assembly, testing, packaging and substrates, signalling a wider push to build a domestic semiconductor supply chain.
India’s Semiconductor Push Enters a New Phase
The latest semiconductor investment proposals come as India hosts SEMICON India 2026 in New Delhi from September 17 to 19. Union Electronics and Information Technology Minister Ashwini Vaishnaw said companies have proposed investments of around $11 billion to $12 billion under the second phase of the India Semiconductor Mission, or ISM 2.0.
According to the government, the proposed investments are expected to be made over the next two to three years. The projects are not limited to chip fabrication. They cover several parts of the semiconductor value chain, including semiconductor equipment, materials, gases, chemicals, assembly, testing, packaging and substrates.
The development is significant because semiconductor manufacturing depends on a broad industrial ecosystem. A chip facility needs access to specialised equipment, chemicals, materials, packaging facilities, testing capabilities and skilled workers. Building these supporting industries alongside fabrication capacity is a central part of the next phase of India’s semiconductor strategy.
What Semicon 2.0 Covers Beyond Chip Manufacturing
Semicon 2.0 is designed to expand India’s semiconductor capabilities beyond the initial focus on setting up manufacturing and packaging facilities.
The second phase has six broad pillars: chip design, semiconductor machines and materials, fabrication units, advanced packaging, research and development, and talent development. The government has also said it wants at least 200 companies and startups designing chips in India under the new phase.
This broader approach matters because semiconductor manufacturing is not a single-stage activity. Chips move through multiple stages before reaching electronics manufacturers and consumers.
For example, companies need semiconductor-grade chemicals and gases, specialised manufacturing equipment, testing systems and packaging technologies. Local suppliers can potentially reduce dependence on overseas supply chains while also creating opportunities for Indian engineering and manufacturing companies.
The government’s approach therefore seeks to develop an ecosystem rather than concentrate only on chip fabrication plants.
Nearly $12 Billion in Proposals Across the Supply Chain
The $11 billion to $12 billion figure announced by the government includes proposals from companies working across multiple areas of the semiconductor industry. The government has not publicly disclosed the names of all companies behind these proposals because several are still subject to internal approvals.
Vaishnaw said companies would announce their investments themselves after obtaining the required approvals from their boards and shareholders. This means the proposals should be viewed as planned investments rather than completed capital expenditure.
The distinction is important for assessing the development. Investment proposals indicate interest and planned commitments, but the actual economic impact will depend on projects moving through approvals, construction, production and commercial operations.
At the same time, several developments announced around SEMICON India 2026 show that activity is already expanding across the ecosystem.
Global Semiconductor Companies Expand Their India Plans
Global semiconductor companies are increasing their involvement in India’s growing chip ecosystem.
Applied Materials said it plans to invest $5 billion in India through 2035 to strengthen semiconductor research and development, supply chain capabilities and talent development. The company made the announcement during SEMICON India 2026.
Tata Electronics has also announced multiple semiconductor partnerships involving companies such as Nexperia, Besi and Fujifilm. The company said seven partnerships had been announced at SEMICON India, with additional agreements planned.
These developments show that India’s semiconductor strategy is attracting activity beyond domestic chipmakers. Equipment suppliers, materials companies, technology providers and global semiconductor firms are becoming part of the emerging ecosystem.
India Already Has Semiconductor Production Projects
The latest proposals build on projects approved during the first phase of the India Semiconductor Mission.
As of September 2026, India had approved 12 semiconductor fabrication and packaging units involving cumulative investment of more than ₹1.60 lakh crore, according to Business Standard. The government has said that three packaging units operated by Micron Technology, Kaynes Semicon and CG Semi have already started commercial operations.
Commercial production has also begun at Continental Device India Limited’s Mohali facility and Suchi Semicon’s Gujarat facility, according to information shared at SEMICON India 2026.
This marks a shift from the earlier stage of India’s semiconductor programme, when the focus was largely on securing project approvals and establishing manufacturing infrastructure.
Why Tier-2 and Tier-3 Cities Could Benefit
The semiconductor industry could create opportunities beyond the major technology centres because its supply chain requires different types of manufacturing, engineering, logistics and technical services.
Large fabrication and packaging facilities can create demand for suppliers, maintenance companies, industrial services, transportation, specialised construction and skilled technical workers. Over time, clusters around major semiconductor projects could therefore support smaller businesses in nearby cities and industrial regions.
The impact will depend on where companies establish their facilities and how quickly supplier networks develop. However, the government’s emphasis on equipment, materials, chemicals, packaging and testing creates a wider potential opportunity than a strategy focused only on chip fabrication.
For India’s smaller industrial centres, this could be particularly relevant if semiconductor suppliers and ancillary manufacturers begin setting up closer to emerging production clusters.
Jobs and Semiconductor Skills Become a Key Focus
Talent development is another major component of Semicon 2.0.
The government has estimated that ISM 2.0 could contribute to the creation of around 100,000 jobs in the Indian semiconductor ecosystem, including employment generated by downstream industries.
The demand is expected to span engineers, technicians, equipment specialists, researchers, manufacturing professionals and other technical roles.
The government is also pushing chip design and semiconductor research. During SEMICON India 2026, the focus was placed on encouraging young researchers and strengthening industry-driven research and development in India.
For students and workers outside traditional technology hubs, the expansion could create new career pathways if training programmes and industry partnerships expand alongside manufacturing capacity.
The Next Test Is Turning Proposals Into Production
The latest $12 billion figure represents a significant pipeline of proposed semiconductor investment, but the next stage will be execution.
Semiconductor projects require large amounts of capital, reliable infrastructure, specialised talent and long development timelines. Companies must also secure regulatory and internal approvals before proposed investments can translate into operating facilities.
India’s first semiconductor mission focused heavily on establishing the foundations of domestic production. Semicon 2.0 is attempting to broaden that foundation by supporting the equipment, materials, design, packaging, research and talent required to make the ecosystem more complete.
If the proposed investments move forward as planned, the impact could extend beyond chip factories to electronics manufacturing, industrial suppliers, logistics, engineering services and technology startups.
For now, the $11 billion to $12 billion proposal pipeline provides a measure of the industry’s growing investment interest. The more important indicator over the coming years will be how many of these proposals become operational projects and commercially viable businesses.
Key Takeaways
- India has received semiconductor investment proposals worth nearly $12 billion under ISM 2.0.
- The proposals cover equipment, materials, chemicals, gases, assembly, testing, packaging and substrates.
- Semicon 2.0 also focuses on chip design, research, advanced packaging and semiconductor talent.
- The next major challenge is converting proposed investments into operational facilities and sustainable supply chains.
FAQs
What is Semicon 2.0?
Semicon 2.0 refers to the second phase of India’s Semiconductor Mission. It expands government support across chip design, semiconductor equipment and materials, fabrication, advanced packaging, research and development, and talent development.
How much investment has been proposed under Semicon 2.0?
The government has said it has received investment proposals worth around $11 billion to $12 billion under ISM 2.0. The proposed investments are expected to be made over the next two to three years, subject to the relevant approvals.
Does the $12 billion include only chip factories?
No. The proposals cover a wider semiconductor supply chain, including equipment, materials, gases, chemicals, assembly, testing, packaging and substrates.
Could Semicon 2.0 create jobs outside major cities?
Potentially. Semiconductor projects can generate demand for manufacturing suppliers, engineering services, logistics, maintenance and other supporting businesses. The actual regional impact will depend on where facilities and supplier networks are established.
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