The India Semiconductor Mission

How India's 2021 semiconductor programme offers large subsidies to attract fabs, assembly plants and design firms, and what it has approved so far.

In December 2021, the government approved a 76,000 crore rupee programme to build a semiconductor and display manufacturing ecosystem. The India Semiconductor Mission (ISM) runs it.

What it offers

Fiscal support of up to around 50 percent of project costs for fabs, display fabs and some compound semiconductor and ATMP/OSAT units, shared with states, which often add further incentives.
The Design Linked Incentive scheme for chip design.

Approved projects

By 2025, the government had approved several projects, including:

Tata Electronics fab in Dholera, Gujarat, in partnership with Taiwan’s PSMC.
Micron’s ATMP plant in Sanand, Gujarat.
Tata’s assembly and testing plant in Assam.
CG Power (with Renesas and Stars Microelectronics) OSAT in Gujarat.
Kaynes Technology OSAT in Gujarat.
Several more units approved in 2025, including in Odisha and Punjab.

Why such large subsidies?

Fabs cost billions of dollars, and other countries offer big subsidies too.
India wants to reduce import dependence and build strategic capabilities.

Debates

Cost: some economists question whether huge subsidies are the best use of public money.
Technology: India is starting with older, mature process nodes, not the most advanced chips.
Ecosystem: fabs need suppliers, water, power and skilled workers.

Next phase

The government signalled a second phase of the mission with further funding.

The subsidy calculation

A company plans a chip assembly plant costing thousands of crores. With central support covering about half and state incentives adding more, the project becomes viable in India instead of elsewhere.

Thinking India is building the world's most advanced chips first

India is starting with mature technology nodes and assembly plants.

Key takeaways

The India Semiconductor Mission was approved in December 2021 with 76,000 crore rupees.
It offers support of up to around 50 percent of project costs.
Approved projects include Tata's Dholera fab and Micron's Sanand ATMP plant.
Costs, technology level and ecosystem gaps are debated.