India sets target of 200 domestic chip design firms under Semicon 2.0

A new target for silicon design

India expects to foster at least 200 domestic chip design companies under the newly launched second phase of its national semiconductor drive, building on a pilot phase that has already seen five factories begin commercial production.

Speaking at the SEMICON India 2026 conference in New Delhi, Ashwini Vaishnaw, the Union Minister for Electronics and IT, outlined the progress of the India Semiconductor Mission (ISM). Under the first phase of the scheme, the government focused heavily on lowering entry barriers for startups by subsidising expensive Electronic Design Automation (EDA) tools. More than 105 startups have used these tools to design and test chips, and 20 have successfully secured venture capital funding to bring their products closer to commercial launch.

"We estimate at least 200 chip design companies emerging under Semicon 2.0," Vaishnaw said, noting that India’s established strength in information technology and global capability centres is shifting toward proprietary chip design.

Training the workforce

To support this growth, the country has trained about 70,000 chip-design engineers over the last four years, closing in on its initial target of 85,000. The government expects this pool of talent to underpin domestic research, design, and manufacturing as the sector expands.

The physical manufacturing of silicon is also starting to materialise. Of the 12 semiconductor plants approved under the first phase of the mission, five have now commenced commercial production. The next phase will focus on expanding local manufacturing of critical machinery and raw materials, as well as integrating applied research and development directly into these plants to improve yields and quality.

This expansion is also filtering down to smaller domestic businesses. Vaishnaw noted that India’s electronics manufacturing sector has helped micro, small, and medium enterprises (MSMEs) build precision manufacturing skills that are now being utilised across aerospace, defence, and semiconductor production.

Global supply chains

The push is accompanied by a diplomatic effort to embed India into global supply chains. At the conference, Indian officials hosted a series of country-specific roundtables to discuss supply-chain localisation and joint ventures.

A session with Singaporean delegates attracted 142 participants to discuss advanced packaging and supply-chain management, while a European roundtable drew 139 attendees, and a South Korean session brought in 115.

Foreign Secretary Vikram Misri emphasised that building resilient supply chains requires trusted partners, stating that cooperation must be built on reliability, credibility, incentives, and value creation. Misri argued for a balanced approach that combines domestic capabilities with international partnerships.

As these factories scale, the government is also introducing environmental guidelines. Vaishnaw confirmed that new manufacturing facilities will be required to use water recycling systems to curb freshwater consumption, while data centres and factories are being encouraged to adopt closed-loop cooling systems.