Launched in 2021, ISM 1.0 was conceived as a state-backed push to build a full-stack chip ecosystem. The FM announced ISM 2.0 in the 2026 Budget to produce equipment and materials, design full-stack Indian IP and fortify supply chains
The Union Cabinet on Tuesday (May 5) approved two new semiconductor plants in India, including one that could be the country’s first display fabrication facility, in a big boost to New Delhi’s chip ambitions. With these, the government has approved a total of 12 chip plants under the first leg of the India Semiconductor Mission, the government’s ambitious Rs 76,000 crore plan to kickstart semiconductor manufacturing in the country, after managing to localise smartphone assembly.
India’s foray into semiconductor production and packaging has been outlined as a strategic move by New Delhi to insert itself into the global chip supply chain and establish the sector to deepen domestic value addition in its electronics sector. Semiconductors — used to power devices from toasters to fighter jets — have become a critical resource amid heightened geopolitical tensions over the last few years.
Launched in 2021, ISM 1.0 was conceived as a state-backed push to build a full-stack chip ecosystem, from fabrication and packaging to design and display manufacturing. Under the scheme, cumulative investments of around Rs 1.64 lakh crore have been committed. In this year’s Union Budget, Finance Minister Nirmala Sitharaman announced the India Semiconductor Mission 2.0 to produce equipment and materials, design full-stack Indian IP and fortify supply chains.
India’s chip map
The 12 chip plants that have received approvals under the ISM are being constructed in states like Gujarat, Assam, Andhra Pradesh, Uttar Pradesh, and Odisha. They include one full-fledged commercial semiconductor fabrication facility, and assembly and testing plants.
Tata Electronics semiconductor foundry (Gujarat): The company is setting up India’s first commercial-grade chip fab, in partnership with Taiwan’s PSMC as the technology partner. Coming up in Dholera, Gujarat, the fab will be set up at an estimated cost of Rs 91,000 crore, and is expected to have a total monthly capacity of 50,000 wafers across 28nm to 110nm technologies.
Micron Technology (Gujarat): This was the first project approved under ISM 1.0 in 2023, after the government jacked up incentives for assembly and testing plants from 30% to 50%. The US-based company is a major manufacturer of memory chips, and its approval was seen as a big boost to India’s semiconductor push. The plant started commercial production in February.
Tata Electronics assembly unit (Assam): Tata Electronics is building this semiconductor assembly and testing facility in Jagiroad, Morigaon district, Assam, with an investment of over Rs 27,000 crore. This facility is expected to manufacture 48 million chips per day for sectors including automotive, electronics, and telecommunications.
HCL-Foxconn (Uttar Pradesh): The HCL-Foxconn joint venture is setting up a Rs 3,700 crore semiconductor Outsourced Semiconductor Assembly and Test (OSAT) facility in Jewar, Uttar Pradesh, with operations expected by 2028. Located near Noida International Airport, the plant will produce display driver chips with a capacity of 20,000 wafers per month.
Kaynes Semicon (Gujarat): The Kaynes Semicon plant in Sanand, Gujarat, is a Rs 3,300 crore OSAT facility inaugurated by Prime Minister Narendra Modi on March 31, 2026. With a capacity of up to 60 lakh chips per day, it focuses on producing power modules for electric vehicles and industrial applications. This plant started commercial operations in March.
CG Semi (Gujarat): CG Power, a Murugappa Group company, is setting up an OSAT plant in Sanand, Gujarat. In a joint venture with Renesas Electronics and Stars Microelectronics, the plant is being developed at an investment of over Rs 7,600 crore.
SiCSem (Odisha): The Rs 2,066-crore assembly and testing (ATMP) facility being set up by SiCSem Pvt Ltd, will produce silicon carbide-based diodes and MOSFETs.
3D Glass Solutions (Odisha): This would be India’s first advanced 3D chip packaging unit. The project is being implemented by the US-based 3D Glass Solutions Inc through its wholly owned Indian subsidiary Heterogeneous Integration Packaging Solutions Pvt Ltd. It is funded by Intel, among others.
Advanced System in Package Technologies (Andhra Pradesh): The company will set up a semiconductor manufacturing unit in Andhra Pradesh, under a technology tie-up with APACT Co. Ltd, South Korea, with an annual capacity of 96 million units.
Continental Device (Punjab): The company will expand its discrete semiconductor manufacturing facility at Mohali, Punjab. The proposed facility will manufacture high-power discrete semiconductor devices such as MOSFETs, IGBTs, Schottky Bypass Diodes, and transistors, both in Silicon and Silicon Carbide.
Crystal Matrix (Gujarat): On Tuesday, the Cabinet approved a Rs 3,068 crore compound semiconductor fabrication and assembly based on GaN (Gallium Nitride) technology for manufacturing Mini/Micro-LED display modules to be set up by Crystal Matrix Ltd. Once functional, this would be the first display assembly facility in India, an industry that has so far been largely concentrated in countries like Japan and South Korea.
Suchi Semicon (Gujarat): The company will set up an Outsourced Semiconductor Assembly and Test (OSAT) facility in Surat, Gujarat, worth Rs 868 crore for manufacturing discrete semiconductors.
What’s next: ISM 2.0
The government is working on the next iteration of the plan, and could approve a scheme with an outlay of around $11 billion, The Indian Express had earlier reported. However, under the revised scheme, the government’s priorities might change. While ISM 1.0 focused on attracting chipmaking infrastructure to India, ISM 2.0 is likely to offer greater support to ancillary industries such as gases, chemicals and capital goods, among others.
Under ISM 2.0, the government could reduce the capex subsidy for assembly and testing plants (ATMP/OSAT) from the current 50%. Under the new scheme, the government could also offer capital equipment and ecosystem support such as gases, chemicals, and raw materials needed at assembly and testing plants.
ISM 2.0 could also see a much more significant design-side push, and tie incentives to the amount of market capital companies are able to raise.
