Context: The Union Cabinet has approved India Semiconductor Mission (ISM) 2.0 with an outlay of ₹1.27 lakh crore. Under the revised scheme, the Centre is unlikely to subsidize land acquisition and technology transfer costs, with States expected to facilitate land while the Centre shifts its focus towards semiconductor design, manufacturing, and strengthening the domestic chip ecosystem.
Explanation:
- India Semiconductor Mission (ISM) is India’s flagship programme to develop a semiconductor and display manufacturing ecosystem and reduce import dependence.
- Itaims to strengthen chip design, fabrication (fabs), packaging, testing, and supply chains.
- Technology transfer refers to acquiring semiconductor manufacturing know-how from established global firms; under ISM 2.0, no subsidy will be provided for such costs due to valuation challenges.
- States are expected to provide land and supporting infrastructure for semiconductor projects.
- Incentives have been rationalized: 40% subsidy for silicon fabs, 35% for advanced packaging, and 25% for conventional packaging.
- The scheme also supports fabless chip design companies, start-ups, and aims to increase domestic value addition and technological self-reliance.
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India Semiconductor Mission 2.0 and Semiconductor Ecosystem