India's government advances its Semicon 2.0 initiative, drawing interest from international equipment suppliers to establish a comprehensive chip ecosystem and reduce supply chain vulnerabilities amid rising global demand and geopolitical shifts.
Global semiconductor equipment makers are examining India as a manufacturing base as New Delhi expands its push to build a fuller chip ecosystem under Semicon 2.0, a senior official in the electronics ministry said. S. Krishnan, secretary at the Ministry of Electronics and Information Technology, said several foreign suppliers are considering setting up production and assembly operations in the country as policymakers try to attract not only chip fabs but also the firms that make the tools and materials those plants need.
According to India Briefing, the cabinet has approved Semicon 2.0 with an outlay of INR 1.275 trillion, or about $13.23 billion, to support chip design, advanced packaging, equipment, specialty materials, research, and skills development. Business Standard and DD India reported that the program extends the earlier semiconductor push and is meant to turn India into a more competitive hub across the value chain, not just a site for chip assembly or fabrication.
Industry observers say that focus on equipment makers is important because semiconductor manufacturing depends on highly specialized machinery that is still dominated by a small number of global suppliers. By trying to localize more of that supply chain, India hopes to reduce import dependence and make future fabs less vulnerable to external bottlenecks.
Krishnan said the government has been talking with companies in the United States, Japan, South Korea, and Europe as it courts investment and partnerships. The broader appeal, he said, comes from India’s expanding electronics sector, policy continuity, and deep technical talent pool, all of which officials see as ingredients for long-term investment.
The interest is arriving at a moment when chip supply chains are being reshaped by geopolitics, industrial policy, and surging demand tied in part to artificial intelligence. Tom's Hardware reported that ASML has already signed an agreement with Tata Electronics to equip what would be India’s first commercial semiconductor fab in Dholera, Gujarat, underscoring how equipment vendors may become central to the country’s next phase of semiconductor development.
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