Govt has finalised design, outline of ISM phase two, to support semicon

The government is also working to make sure that the fabless semiconductor chip' ecosystem is also enhanced further by making changes to the design linked incentive scheme

Aashish Aryan

2 min read Last Updated : Mar 07 2025 | 12:10 AM IST

The Central government has finalised the outlines of the second phase of the India Semiconductor Mission (ISM) and is now holding internal discussions before rollout of the scheme which will support more ambitious design-linked innovations and design initiatives in the country.

“We have to now figure out how to make it a completely sustainable ecosystem and also how do we move up the value chain as time goes along. While the legacy nodes are important and they have considerable demand, there are also risks of over-capacity and capacity from other geographies,” Union electronics and information technology ministry secretary S Krishnan said.

Under the second phase of the ISM, the government will also look to provide some support to raw materials, equipment, gases and speciality chemicals needed in semiconductor manufacturing, Krishnan said.

The government is also working to make sure that the fabless semiconductor chip ecosystem is also enhanced further by making changes to the design linked incentive scheme so that more ambitious projects and innovations are supported through incentives, he said.

“There is also (chip) packaging design which needs to go alongside and we have to look at how advanced packaging can be supported through the design linked scheme as well,” Krishnan said.

The country attracted investment worth $18 billion under the first phase of the ISM. Approved by the Union Cabinet in December 2021, ISM has so far seen incentive approvals for four chip packaging facilities and one chip manufacturing facility.

The ₹76,000 crore mission aims to set up from scratch a complete semiconductor chip manufacturing and packaging capabilities in the country.

Micron, which is headquartered in the US, was the first company to receive government approval to set up a chip packaging unit at Sanand in Gujarat. The assembly, testing, marking, and packaging (ATMP) plant will be constructed at a total cost of $2.75 billion, which include the investments to be made by the company as well as state and central government's sops and incentives.