ISM 2.0 Incoming: India Targets Full-Stack Innovation in Semiconductor Ecosystem

India’s semiconductor ambitions entered a transformative phase this week with the unveiling of the second edition of the India Semiconductor Mission (ISM 2.0), announced at the Semicon India 2025 summit.
Building on the ₹76,000 crore foundation laid by ISM 1.0, the new roadmap pivots from infrastructure creation to full-stack innovation, ecosystem integration, and indigenous product development.

From Fabs to Full Products: What ISM 2.0 Promises

Union Minister Ashwini Vaishnaw declared ISM 2.0 a “moment of pride,” presenting the first set of Made-in-India commercial-grade chips to Prime Minister Narendra Modi.
The chips, developed by CG Semi and student teams using Electronic Design Automation (EDA) tools, symbolize India’s transition from consumer to creator in the global chip race.

Key highlights of ISM 2.0 include:

• Expanded Incentives: Support now extends beyond fabs and OSATs to include capital equipment, materials, and ancillary industries such as gas and chemical suppliers.
• Product-Centric Focus: A significant portion of funding will be directed toward designing complete chipsets, ensuring that intellectual property (IP) remains within India.
• Silicon Carbide Priority: Proposals for SiC-based wafer manufacturing will be fast-tracked, given their strategic importance in EVs, defense, and power electronics.
• Revamped DLI Scheme: The Design-Linked Incentive program will now support larger domestic firms, advanced packaging, and risk capital access.

Global Confidence, Local Execution

The summit saw participation from 33 countries and over 350 exhibitors, including industry giants like ASML, Lam Research, and Merck Electronics.

Vaishnaw emphasized India’s reputation for respecting IP rights and fostering co-development, positioning the country as a trusted partner in a multipolar tech world.

Kai Beckmann, CEO of Merck Electronics, noted,

India builds resilience into global value chains by developing local capacity,” while MediaTek India’s MD Anku Jain stressed the role of startups in solving ecosystem gaps.

Economic and Strategic Impact

• Cost Advantage: Independent studies suggest India’s semiconductor production is already 15–30% more cost-effective than global benchmarks.
• Talent Pipeline: Over 60,000 engineering students have logged 13 million+ hours on EDA tools, with 278 universities participating in chip design programs.
• Deep Tech Alliance: A $1 billion fund has been launched to support frontier sectors including semiconductors, clean energy, biotech, and quantum technologies.

What’s Next?

With 10 semiconductor projects worth $18 billion underway and land allocated for the HCL-Foxconn JV fab, India is poised to become a global hub for high-value, mid-volume chip production.
The modernization of ISRO’s Semiconductor Laboratory in Mohali is also in motion, aiming to boost domestic tape-outs and export capacity.