India's semiconductor policy has moved from attracting fabs to building the whole ecosystem. Critically examine with reference to Semicon 2.0.

The Semicon India Programme of 2021 had an outlay of ₹76,000 crore and mainly subsidised fabs and packaging units. Semicon 2.0 was approved in July 2026 with ₹1,27,500 crore spread across six pillars, from design to talent [1]. That is a real shift towards a whole ecosystem, but it is not yet proven in execution.

The shift: from fabs to the ecosystem

• Semicon 1.0 gave fabs 50% fiscal support and approved 12 projects worth over ₹1.64 lakh crore [2].
• Semicon 2.0 has six pillars: Design, Machines and Materials, More Fabs, ATMP/OSAT, R&D and Talent [1].
• Pillar 2 aims to bring in at least 3 equipment makers and 5 chemicals and gases firms. These are the global chokepoints of the chip supply chain [2].
• Pillar 3 widens the fab scope beyond silicon to compound semiconductor, discrete and display fabs [1].

Strengths

• Realistic entry point: 8 of 10 earlier projects were packaging units, which cost far less to set up than fabs [3].
• Design base: startups backed for chip design have completed 16 tape-outs, and 13 have raised venture funding [3].
• Fiscal prudence: incentives are paid only when firms meet agreed milestones, so the state does not pay for plants that are never built [5].
• Time-bound process: a single portal, a 3-year application window and projects of up to 6 years [1][2].

Weaknesses

• Approval is not production: only 5 of 12 Semicon 1.0 projects were producing by October 2026 [2]. Two fab consortia approved in 2013 stalled after approval, and the Empowered Committee had to be reconstituted in 2015 [6].
• Low spending: only 23% (2023-24) and 9% (2024-25) of the semiconductor budget was actually spent [4].
• Headline vs cash: ISM 2.0 got just ₹1,000 crore in 2026-27 [5].
• Spread thin: funding all six pillars at once, while richer economies compete with large subsidies, risks doing many things partly rather than a few things well.

Overall, Semicon 2.0 correctly targets inputs, design and talent rather than fabs alone. Its success depends on phasing: packaging, materials and design first, advanced fabs later. Two steps would help: a public milestone tracker for each project, and partnerships with trusted countries. Together they can turn approvals into output and give real content to Atmanirbhar Bharat in strategic technology.