Modi Launches ₹1.27 Lakh Crore Semicon 2.0 as India's Chip Ambitions Move Beyond Assembly

Prime Minister Narendra Modi inaugurated the fifth edition of SEMICON India on Wednesday, September 17, at the Yashobhoomi convention centre in New Delhi, and used the occasion to formally launch Semicon 2.0, the second phase of India's semiconductor mission, backed by a fiscal outlay of ₹1.27 lakh crore. The launch marks a deliberate widening of India's chip ambitions: where the first phase concentrated on attracting assembly, testing and fabrication units, the new programme extends government support across the entire value chain, from design software and manufacturing equipment to specialised materials and advanced research.

A Bigger Bet Than Phase One

According to Akashvani News, the state broadcaster, the budget for the second phase amounts to roughly $13.5 billion, up from about $8 billion committed under the original Semicon India Programme approved in 2021. Semicon 2.0, cleared by the Union Cabinet ahead of the event, rests on six core pillars: chip design, manufacturing equipment, specialised semiconductor materials, fabrication facilities, advanced packaging, and research and development.

The government has set a target of supporting at least 200 startups and companies designing chips in India across the full spectrum of semiconductor requirements. Outlook Business reported that Union Electronics and IT Minister Ashwini Vaishnaw told the gathering that India had already produced 85,000 trained semiconductor engineers in four years, exceeding a target originally set for ten years, and that the government now aims to train an additional one lakh. Students from tier-II and tier-III cities, Vaishnaw said, have designed more than 250 chips under government-supported programmes.

Modi's Pitch to Global Chipmakers

Speaking on his 76th birthday, the Prime Minister positioned India as a dependable alternative in a strained global supply chain. India, he said, is "a reliable and continuously prepared destination to meet the new global manufacturing challenges," according to Akashvani News. He pointed to India's 7.8 per cent GDP growth in the most recent quarter and a sovereign rating upgrade from a Japanese credit agency as evidence of macroeconomic stability, and stressed the country's advantage in "talented, skilled youth," noting that India produces lakhs of engineers every year, as reported by Outlook Business.

Before the inauguration, Modi held a closed-door roundtable with senior executives from some of the industry's most consequential companies, including Micron Technology, ASML, Infineon Technologies, Applied Materials, Tokyo Electron, AMD, Intel and Tata Electronics, where he pressed for closer collaboration between industry and government.

Fujifilm's ₹800-Crore Materials Plant

The event drew a concrete investment commitment even before its doors opened. Japan's Fujifilm announced it will invest approximately ₹800 crore (about $83 million) to set up a semiconductor materials manufacturing facility in India, with investment beginning in October 2026 and commercial production expected in fiscal year 2028, Upstox reported. The first phase will produce front-end semiconductor process materials; a second phase covering surface conditioning materials and high-purity chemicals will depend on how quickly domestic demand grows. Fujifilm President and CEO Teiichi Goto met the Prime Minister to reaffirm the commitment. "India is entering an important phase in semiconductor development and we see a meaningful opportunity to contribute," said Koji Wada, Managing Director of Fujifilm India. The company had earlier signed a memorandum with the Gujarat State Electronics Mission in June 2026.

What Phase One Delivered

The government enters the second phase with a visible, if still early, track record. Twelve semiconductor projects have been approved so far under the India Semiconductor Mission, and according to The Tribune, three units approved under Semicon 1.0 have commenced commercial production. The design ecosystem has also widened: electronic design automation tools have been extended to more than 400 academic institutions and 105 startups, and 24 startups have been approved under the Design Linked Incentive scheme. Officials expect the approved projects to create between 50,000 and 60,000 direct jobs.

The Industry Gathers in Delhi

SEMICON India 2026, organised by the India Semiconductor Mission under the Ministry of Electronics and Information Technology together with the global industry body SEMI, runs from September 17 to 19 under the theme "Silicon to Systems: Building the Ecosystem." The Tribune reported that the exhibition brings together more than 600 exhibitors, of which around 300 are international firms, across 15,000 square metres of floor space, with over 150 speakers, six country pavilions representing Japan, South Korea, Malaysia, the Netherlands, Singapore and Sweden, and twelve state government pavilions. A startup pavilion hosts around 40 young companies, alongside a workforce development pavilion and student hackathons.

Markets responded quickly to the policy signal. Shares of listed electronics and semiconductor-linked companies including Kaynes Technology, Syrma SGS Technology and MosChip Technologies recorded gains of up to 10 per cent following the announcements, Upstox and Whalesbook reported.

The harder test lies ahead. India still imports the overwhelming majority of the chips it consumes, and no leading-edge fabrication capacity exists in the country today. But with a second tranche of ₹1.27 lakh crore on the table, three factories already shipping product, and the world's biggest equipment and materials suppliers exhibiting in Delhi this week, the government is betting that the ecosystem approach — design, materials, equipment and packaging built up together — will succeed where isolated fab announcements could not.

Sources: Outlook Business, The Tribune, Akashvani News, Upstox, Whalesbook.