In fresh chip push, focus shifts to supply chains, IP and equipment, Pg11

Key Highlights:

• Union Finance Minister Nirmala Sitharaman announced India Semiconductor Mission (ISM) 2.0 to strengthen semiconductor manufacturing in India.
• ISM 2.0 will focus on equipment, materials, Indian intellectual property (IP) design, and supply chains.
• The initiative includes industry-led research and training centers for technology and workforce development.
• The Finance Ministry has allocated Rs 1,000 crore for 2026-27 to the IT Ministry for the scheme's second phase.
• The Union Cabinet cleared four new semiconductor assembly and testing plants with a total outlay of Rs 4,594 crore in August.

Detailed Insights:

• ISM 1.0, launched in December 2021 with approximately $10 billion outlay, primarily subsidized semiconductor fabrication, assembly, and testing plants.
• ISM 2.0 represents a shift from a fab-centric approach to a full value-chain strategy, encompassing equipment, materials, chemicals, design tools, R&D, training, and supply-chain resilience.
• The government aims to support a broader chip ecosystem, considering adjustments to incentives for chip packaging.
• The initiative aims to enhance India's competitiveness and strategic autonomy in semiconductor design, tools, materials, and upstream inputs.
• Currently, the government is providing financial incentives for the construction of 10 chip-related factories, including fabrication, assembly, and testing plants.

Key Concepts Involved:

• Semiconductor: A material with electrical conductivity between a conductor and an insulator, used in electronic devices.
• Intellectual Property (IP): Creations of the mind, such as inventions, literary and artistic works, designs, and symbols, used in commerce.
• Supply Chain: The network between a company and its suppliers to produce and distribute a specific product to the final buyer.