ISM 2.0 to cover semiconductor ecosystem partners as well: Vaishnaw

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The second version of India Semiconductor Mission 2.0 will provide support not just for chip manufacturing projects but also to the ecosystem partners who play key roles in their production, Union Minister Ashwini Vaishnaw said on Tuesday.

While speaking to the media at Semicon India 2025, Vaishnaw said that a significant portion of the incentives will be earmarked for product development.

"Getting ecosystem partners into the country is very important because that is the way to sustainably grow.

"All the sectors need to be covered. We will continue that same approach and will give a lot of support to equipment manufacturers, material manufacturers and all other ecosystem partners. That will be a significant part of our journey," the minister said in response to a question on the next version of the India Semicon Programme.

Under the first edition of India Semiconductor Mission, the government had approved an incentive of Rs 76,000 crore, comprising Rs 65,000 crore in incentives for chip production, Rs 10,000 crore for the modernisation of the Semiconductor Laboratory in Mohali and Rs 1,000 crore for the design-linked incentive scheme.

"We should get all the sectors covered from automotive to power electronics to consumer electronics to medical to defence and strategy. A very significant part of the allocation in the next version will also be for products. Developing full products means, as in chipsets which are designed here, the IP rights reside in our country," Vaishnaw said.

Earlier in the day, Prime Minister Narendra Modi said 10 semiconductor projects worth over $18 billion are underway, and the country is advancing towards the next phase of the India Semiconductor Mission, and revamping the design-linked incentive scheme to tap the $1 trillion global chip market.

The work is underway on the next phase of the India Semiconductor Mission.

The Prime Minister also said, "The government is going to give shape to the new DLI (design-linked incentive) scheme".

Vaishnaw said the design projects under the schemes have progressed very well.

"We have provided the latest EDA (Electronic Design Automation) tools to 278 universities. By now, 60,000 engineering students have already worked on these EDA tools for more than 13 million hours. And these 17 student teams, who have designed these chips and taped them out, these chips were today presented to the Prime Minister," the minister.

The chip presented to the Prime Minister also includes the first commercial-grade chip made by CG Semi.

Speaking at the Semicon India event, Electronics and IT Secretary S Krishnan said that critical semiconductor production projects may continue to get up to 70 per cent of the total project cost as an incentive from the Centre and states.

He said the government is looking to expand benefits under the design-linked incentive (DLI) to support larger domestic companies and enhance grants provided under it.

Krishnan said the support that India provides for semiconductor projects is unprecedented, and a total of around $30 billion in incentives and various other benefits is under implementation.

The central government has been providing 50 per cent capital support, while the state government gives incentives of around 20 per cent of the total project cost.

"I've never come across in all these years a programme which is as generous as industrial policy support, which almost amounts to 70 per cent of the cost of a particular project. This 70 per cent is disbursed on a pari-passu basis... Assistance of this level will definitely continue for certain segments, which are crucial and important," Krishnan said.

He said semiconductor, fabs, display fabs, etc, are crucial for the country.

"Display fabs are still an area we are looking out for. In the ISM (India Semiconductor Mission) -2, that will be a crucial element to what we will be looking for, and various other devices, which are a critical area of focus for us," Krishnan said.

Earlier in the day, Prime Minister Narendra Modi announced that the government is working on a new semiconductor mission as well as the DLI scheme.

Krishnan said DLI is one of the key programmes, which we will be looking to expand in the days to come.

"Thus far, it (DLI) has been confined to startups and to SMEs. We are looking to expand that scope. Likewise, we are looking to expand the kind of assistance we will be providing for this particular incentive scheme, both in terms of a grant and also improving access to risk capital," Krishan said.

At present, MSMEs and startups engaged in semiconductor design get up to $2 million in grants from the government under the DLI scheme.

A presentation by Krishnan at the event showed that the new DLI scheme may see support for large domestic semiconductor design firms as well.