India approves more than $13 billion semiconductor plan

India approved a new semiconductor programme on Wednesday, offering more than $13 billion in financial assistance to speed up domestic chip production. The Union Cabinet approved the Semicon 2.0 initiative, expanding a drive launched five years ago to cut reliance on imports and attract investment in the semiconductor industry.

The programme is intended to strengthen India's semiconductor ecosystem, encourage local production of key materials and attract global manufacturers to build fabrication plants in India. The cabinet said the plan recognised the need for sustained long-term support and aimed to place India on the global semiconductor map, but it did not give more details on how the money will be used.

The plan comes after pandemic-era disruption and geopolitical tensions exposed weaknesses in global semiconductor supply chains. India previously launched Semicon 1.0 in 2021, offering support of up to half the cost of setting up chip projects. The source said those incentives helped start 12 manufacturing projects across fabrication, packaging and related areas, with at least three already in commercial production. One of them is an assembly and test facility set up by US memory company Micron Technology.

India's chip market grew from about $38 billion in 2023 to an estimated $45 billion to $50 billion in 2024-25. The government is targeting a market size of $100 billion to $110 billion by 2030.