India pivots to 'Semicon 2.0' to build broader chip ecosystem beyond fabs
The Indian government is shifting its semiconductor strategy to prioritize domestic supply chains, R&D, and talent over capital-intensive fabrication plants.
India is evolving its national semiconductor strategy, moving from a primary focus on fabrication plants toward a more comprehensive framework known as 'Semicon 2.0.' This strategic pivot aims to secure long-term sustainability by building a complete domestic ecosystem rather than relying solely on large-scale infrastructure.
Under the Semicon 2.0 approach, the government is expanding its scope beyond the construction of fabs to encompass the entire semiconductor value chain. This includes a targeted emphasis on chip design, research and development (R&D), and advanced packaging. Crucially, the initiative now prioritizes the creation of domestic supply chains for essential inputs, specifically targeting the production of specialty chemicals, gases, and materials required for chip manufacturing.
The shift from ISM
This evolution follows the initial phase of the India Semiconductor Mission (ISM), which utilized significant subsidies to attract global chipmakers to establish fabrication plants on Indian soil. While these subsidies were intended to jumpstart the industry, policymakers recognized that fabs alone do not constitute a self-reliant ecosystem. The realization that a fab cannot operate in isolation has driven the conceptual shift toward a model that integrates the supporting industries and technical expertise necessary to sustain production.
Strategic implications
Building a domestic semiconductor industry is viewed as critical for India's strategic autonomy and long-term economic growth. By developing internal capabilities in design and materials, India seeks to reduce its strategic vulnerabilities and reliance on imports for critical electronics. This transition is intended to move the country higher up the global tech value chain, transforming it from a consumer of semiconductor technology into a resilient producer.
The path forward
To achieve these goals, the government is focusing on the development of a skilled talent pool capable of driving innovation in chip design and advanced packaging. The success of Semicon 2.0 will depend on whether these subsidies can effectively foster genuine technological breakthroughs and a robust network of domestic suppliers. Observers will be watching for new partnerships in R&D and the emergence of local specialty chemical providers as indicators of the strategy's progress.