The Finance Ministry has approved an outlay exceeding ₹1 lakh crore for the second phase of the India Semiconductor Mission, according to reports. The proposal is expected to move to the Union Cabinet soon for final clearance, with sources indicating it could be taken up before the end of April.
The upcoming phase, ISM 2.0, is aimed at strengthening India’s semiconductor ecosystem with a sharper focus on research and development, chip design, and innovation. The initiative also coincides with the development of a new semiconductor facility in Sanand, Gujarat, further supporting the country’s ambitions in the sector.
The scheme is likely to introduce incentives for advanced semiconductor technologies, including next-generation nodes such as 3nm and 2nm. This marks a strategic shift toward high-end capabilities, moving beyond basic manufacturing.
The first phase of the mission had a financial outlay of ₹76,000 crore and saw the approval of 10 projects, attracting investments of around ₹1.60 lakh crore. Building on this momentum, the second phase aims to deepen technological expertise and reduce reliance on external ecosystems.
A key focus under ISM 2.0 will be the development of a strong fabless ecosystem, encouraging domestic chip design and intellectual property creation. The government also plans to strengthen the entire semiconductor value chain, from design to fabrication.
Talent development remains a central pillar of the mission, with plans to invest across more than 500 universities to create a skilled workforce aligned with industry needs.
Supporting this broader push, Kaynes Technology has recently inaugurated a semiconductor facility in Gujarat with an investment of ₹33,000 crore. The plant is expected to produce up to 6 million chips per day, marking a significant step forward in India’s semiconductor manufacturing capabilities.
