India's Semiconductor Push: Cabinet Approves 12 Plants Under Rs 76,000 Crore ISM Scheme

Indian Express - Explained · 19 May 2026 · 2 min read
Prelims · Science and technology Mains · GS3 Economy High relevance

The Union Cabinet approved two new semiconductor plants, bringing the total to 12 under the India Semiconductor Mission (ISM), a Rs 76,000 crore initiative to establish domestic chip manufacturing and reduce reliance on imports amid global supply chain vulnerabilities.

Key points

India Semiconductor Mission (ISM): Launched in 2021 with Rs 76,000 crore outlay, ISM aims to build a full-stack chip ecosystem, including fabrication, packaging, and design, to position India in the global semiconductor supply chain.

Geopolitical Significance: Semiconductors are critical for defense, electronics, and AI, making domestic production a strategic priority amid US-China tensions and supply chain disruptions.

Tata Electronics: Setting up India's first commercial-grade chip fab in Dholera, Gujarat, with Taiwan's PSMC, at Rs 91,000 crore investment, targeting 50,000 wafers/month across 28nm-110nm technologies.

Micron Technology: First ISM-approved project (2023) in Gujarat, a US-based memory chip manufacturer, benefited from increased incentives (30% to 50%) for assembly and testing plants.

Regional Distribution: Plants span Gujarat, Assam, Andhra Pradesh, Uttar Pradesh, and Odisha, promoting industrial decentralization and regional economic growth.

ISM 2.0: Budget 2024 announced ISM 2.0 to focus on equipment production, indigenous IP design, and supply chain resilience, with a proposed $11 billion outlay.

[GS3-Economy] The semiconductor sector aligns with India's 'Make in India' and 'Atmanirbhar Bharat' goals, potentially boosting electronics manufacturing and reducing the $24 billion annual chip import bill.

Way Forward: India should accelerate skill development in semiconductor engineering, incentivize R&D through tax breaks, and establish bilateral tech partnerships with Taiwan and the US to bridge technological gaps.

Key terms

Semiconductor Fabrication

The process of manufacturing integrated circuits (chips) on silicon wafers, involving photolithography and etching. For UPSC, it's critical for GS3 (economy/technology) as it underpins strategic industries like defense, telecom, and AI, reducing import dependence.

India Semiconductor Mission (ISM)

A Rs 76,000 crore PLI-style scheme launched in 2021 to build domestic semiconductor manufacturing capacity. Relevant for GS2 (governance) and GS3 (economy), it addresses national security and economic self-reliance amid global chip shortages.

Outsourced Semiconductor Assembly and Test (OSAT)

Facilities that package and test chips post-fabrication. Key for UPSC as OSAT units (e.g., Kaynes Semicon) create jobs and integrate India into global value chains, a focus area in GS3's industrial policy.

28nm-110nm Technology Nodes

Refers to chip miniaturization levels (nanometers). For UPSC, understanding these terms is vital for GS3 (science and tech) as they determine chip efficiency, with 28nm being mainstream for automotive and IoT applications.