Semicon 2.0, Scheme for development of Semiconductor Design and Manufacturing Ecosystem in India

What it does

Semicon 2.0 is the second round of central support for semiconductors. The Ministry of Electronics and Information Technology notified it on 31 August 2026 as F. No. W-38/6/2025-IPHW, in the Gazette of India Extraordinary, Part I, Section 1. It builds on the first Semicon India Programme and does not replace that programme's approved projects. Eligible work falls in six pillars and ten categories: chip design, machines and materials, further fabs, the assembly and test industry, research and development, and talent.

It is a scheme of incentives and not a statute. It gives fiscal support, paid on a pari passu basis, which means that support tracks the applicant's own spending and does not arrive ahead of it. The India Semiconductor Mission is the nodal agency, and applications go through its portal during an application window. For the design pillar, the Centre for Development of Advanced Computing issues the request for proposal and evaluates the applications.

Who it binds

It binds the agency and the applicants who accept its terms. An applicant takes on the conditions of the scheme, and a grant is made on the terms approved. The gates decide who can apply. Every manufacturing pillar sets a minimum capital investment for the proposed unit, a minimum revenue earned in one of the three financial years before the application, counted across group companies and joint ventures, and production grade technology that the applicant owns or holds under licence (test and characterisation facilities are exempt from the technology condition).

For the design pillar, the notification states two eligibility formulations: a company incorporated and headquartered in India, with significant operations and manpower presence here, owned and controlled by Indian citizens, or on the same terms by Indian citizens or Overseas Citizens of India.

What has changed, and when

• The first programme gave support of up to 50 per cent for a fab. The notification of 31 August 2026 puts the support for a silicon wafer fab at 40 per cent of eligible capital expenditure.
• On the site's reading, a 300 mm silicon wafer fab of 40,000 wafer starts a month or more needs capital of INR 20,000 crore and revenue of INR 7,500 crore. Compound, photonics, sensor and discrete fabs carry a support level of 35 per cent. Legacy packaging carries 25 per cent. The scheme's tables set the figures for each category.
• Equipment, sub-assemblies and components carry a second layer, a production linked incentive on the value of domestically sourced bill of materials, for five years from the financial year 2028 to 2029.
• Research and development and talent carry only an outer figure, up to 75 per cent of project cost including state incentive, with their criteria left to separate guidelines that had not issued when the note was written.

What turns on it in practice

The gate that decides most cases is revenue. It cannot be met by the project. It has to exist before the application. The site's note puts the point in its title: the gates are revenue, ownership and technology that the applicant already holds, not the capital it proposes to spend. A start-up with a strong plan and no earlier revenue cannot cross it on its own.

The second is ownership. The site's position is that an Indian subsidiary owned or controlled from outside India does not meet either design formulation, whatever its operations here, and that the condition is about shareholding and control and not the place of incorporation. A foreign group that wants design support has to reach it through an Indian owned vehicle, and then the question is whether control genuinely sits where the shareholding does. That is a question for the shareholders' agreement.

The third is the return the design support asks for. The note observes that the design pillar is not a grant. The glossary entries on this site for pari passu support and royalty financing rest on the scheme.

The site's manufacturing and incentives work reads the scheme for applicants who must show the revenue, ownership and technology the gates require.