The Union Budget 2026-27 launched India Semiconductor Mission 2.0 with a Rs 1,000 crore annual allocation, focused on producing semiconductor equipment and materials domestically, designing full-stack Indian chip IP, and achieving 3nm and 2nm technology nodes by 2035. ISM 2.0 targets at least 50 fabless companies and 100+ semiconductor design IPs. Indigenous processor DHRUV64 from C-DAC was highlighted as a key milestone alongside the announcement.
Semicon Hunt -> investment -> India Semiconductor Mission
2026-06-05
The Union Budget 2026-27 marked a decisive moment for India's semiconductor ambitions with the announcement of India Semiconductor Mission 2.0. Finance Minister Nirmala Sitharaman allocated Rs 1,000 crore for ISM 2.0 for FY 2026-27, with a strong focus on industry-led research, training centres, semiconductor equipment and materials manufacturing, and full-stack Indian semiconductor intellectual property. ISM 2.0 builds on the foundation laid by ISM 1.0, which as of December 2025 had approved 10 projects across 6 states totalling Rs 1.60 lakh crore.
ISM 2.0 represents a deliberate shift from ecosystem creation to ecosystem deepening. Its priorities are: (1) producing semiconductor equipment and materials in India, reducing dependence on imports from Japan, Germany, and the US; (2) designing full-stack indigenous semiconductor IP including processors, power management chips, and RF devices; and (3) fortifying both domestic and global supply chains. The Modified Programme for Development of Semiconductor and Display Manufacturing Ecosystem for 2026-27 has a total financial outlay of Rs 8,000 crore.
The Design Linked Incentive (DLI) Scheme under ISM 1.0 currently supports 24 semiconductor design startups, which have attracted nearly Rs 430 crore in venture capital. Approximately 67,000 students and over 1,000 startup engineers are actively using electronic design automation (EDA) tools, with 122 designs taped out at the Semiconductor Laboratory in Mohali. Startups have completed 16 tape-outs with six chips fabricated at nodes as advanced as 12nm. Under ISM 2.0, the target is at least 50 fabless semiconductor companies and 100+ advanced semiconductor design IPs by 2035.
A key milestone announced alongside ISM 2.0 is DHRUV64, a fully indigenous 64-bit microprocessor developed by C-DAC under the Microprocessor Development Programme. Built on modern architectural principles, DHRUV64 targets 5G infrastructure, automotive electronics, industrial automation, consumer devices, and IoT. It builds on SHAKTI, AJIT, VIKRAM, and THEJAS processors developed under the Digital India RISC-V programme, collectively forming the foundation of an Indian processor ecosystem that reduces dependence on imported chips for critical applications.
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