Govt Commits 97% Of Chip Manufacturing Fund

The government has reportedly committed around INR 62,900 Cr, nearly 97% of the INR 65,000 Cr, earmarked for semiconductor manufacturing incentives. 

A PTI report, citing Electronics and IT Secretary S Krishnan, said that the funds left can accommodate only small projects.

He further said that under the INR 76,000 Cr India Semiconductor Mission, INR 65,000 Cr was allocated for chip production, INR 10,000 Cr for the modernisation of the Semiconductor Laboratory in Mohali and INR 1,000 Cr for the design-linked incentive scheme.

This comes a few days after the Minister of State for Electronics and Information Technology, Jitin Prasada, has reportedly said that the country’s first homegrown chip is expected to be launched by the end of this year.

“The first packaged chip is expected to be out by December 2025,” the minister was quoted as saying in an ANI report. Prasada He had further added that the government has charted a roadmap for India to become a global chip hub, integrating the entire supply chain—from design and assembly/testing to manufacturing and exports.

Union minister Ashwini Vaishnaw outlined the vision for a ‘Made in India’ chip during his address at the World Economic Forum in Davos this January, emphasizing the country’s target of rolling out its first chip by the end of the year.

India’s Growing Push To Power The Chip Industry

India has been steadily working to establish a robust domestic semiconductor ecosystem to reduce reliance on imports and enhance its position in the global electronics value chain. In line with this vision, the Union Cabinet last week cleared four new projects worth INR 4,594 Cr under the India Semiconductor Mission (ISM).

Of these, two projects will be set up in Bhubaneswar, Odisha, while Punjab and Andhra Pradesh will each host one.

Earlier this month, Vaishnaw said that India is building a commercial-scale silicon-based fabrication facility with a capacity exceeding 50,000 wafer starts per month—well above industry averages.

He further highlighted that six semiconductor units, including one fabrication plant and five assembly, testing, marking and packaging (ATMP) facilities, are currently at various stages of planning, construction, and execution. Additionally, four more projects—one silicon carbide fab and three ATMP units, including an advanced packaging facility were approved last week, said Vaishnaw in an X post.

“The entire ecosystem—spanning design, fabrication, packaging, equipment, chemicals and gases—is now taking shape in Bharat,” Vaishnaw noted. 

The Centre rolled out the India Semiconductor Mission (ISM) in December 2021 with the objective of building a self-reliant and dynamic semiconductor ecosystem in the country. The programme was sanctioned with a total financial outlay of INR 76,000 Cr.

Through the ISM, the government seeks to extend financial support for investments in semiconductor fabrication, display manufacturing, and chip design, thereby bolstering India’s position in the global electronics value chain.

As per Inc42, the homegrown semiconductor market is expected to become a $150 Bn opportunity by 2030.