₹1.27 Lakh Crore for Semicon 2.0 — and This Time the Money Follows the Gases Too
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Article summary
The Union Cabinet approved the second edition of the India Semiconductor Mission on 15 July 2026 with an outlay of ₹1.27 lakh crore, against ₹76,000 crore for the first mission. The government expects it to attract roughly ₹4 lakh crore in investment and generate semiconductor production worth about ₹2 lakh crore over the scheme period. ISM 1.0 had approved twelve projects carrying cumulative investments of about ₹1.64 lakh crore. The design of the second mission is organised around six pillars — chip design, development, production, raw material support, chips for AI devices, and the end-to-end value chain — and its most significant departure is the extension of incentives to suppliers of raw materials, including minerals and process gases. This addresses a structural gap in the first mission, which concentrated on fabrication and assembly while leaving India dependent on imported inputs whose supply has since proved politically contingent. At the same Cabinet meeting a second edition of the mobile phone manufacturing scheme was approved with an outlay of ₹62,500 crore, offering incentives of 2.25 to 5 per cent on eligible sales, an additional 1.5 per cent for domestic sourcing and a further 3 per cent for design and R&D, with expected cumulative production of around ₹39 lakh crore and about 60,000 direct jobs.
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Sample questions — answers revealed after test
Q1. With reference to the India Semiconductor Mission (ISM) 2.0, which one of the following statements is correct?
Q2. A country succeeds in establishing several semiconductor fabrication plants but continues to import effectively all of its high-purity process gases, specialty chemicals and processed minerals. Which one of the following best describes the strategic position this creates?
Q3. Consider the following statements regarding semiconductor manufacturing and India's missions: 1. ISM 1.0 carried an allocation of ₹76,000 crore, under which twelve projects with cumulative investments of about ₹1.64 lakh crore were approved. 2. Semiconductor manufacturing divides conventionally into design, fabrication, and assembly, testing, marking and packaging, with India historically strong in design services and absent from fabrication. 3. Yield, the proportion of usable chips per wafer, can be secured through sufficient capital investment alone, independently of accumulated operational experience. Which of the statements given above are correct?