Semicon 2.0 (ISM 2.0) Semiconductor Incentive Advisory
Semicon 2.0 is the Scheme for Development of Semiconductor Design and Manufacturing Ecosystem in India. It offers 30% of capex for semiconductor machines and materials makers, 25% to 40% of capex for fabs and packaging units, and design and R&D support. Bizastra currently advises on Pillars 2, 3 and 4, which are open now. We map your project to the right pillar, checks the capex and revenue thresholds, and handles the application through to disbursement.
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Capex support (silicon fabs)
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Capex for machines & materials
Crore total scheme outlay
Application window closes (approx.)
Overview
What Is Semicon 2.0 (ISM 2.0)?
Semicon 2.0 is the second phase of the India Semiconductor Mission, notified as the Scheme for Development of Semiconductor Design and Manufacturing Ecosystem in India, with a total outlay of ₹1,27,500 crore as provided in the notification. The policy is effective from 31 August 2026 and is available to eligible semiconductor design, manufacturing, packaging, R&D and talent-development applicants. Support is organised into six pillars and ten categories, each with its own minimum capex, minimum revenue and fiscal support. Implementation guidelines dated 16 September 2026 are currently open for Pillars 2, 3 and 4. It is one of the central government schemes BizAstra advises on, alongside the RDI Fund and the GOBARdhan Scheme.
| Particular | Details |
|---|---|
| Name of the scheme | Semicon 2.0: Scheme for Development of Semiconductor Design and Manufacturing Ecosystem in India |
| Total outlay | ₹1,27,500 crore (as provided in the notification) |
| Effective from | 31 August 2026 |
| Eligible units | Eligible semiconductor design, manufacturing, packaging, R&D and talent-development applicants under the respective categories |
| Eligible capex | Plant & machinery, building, associated utilities, clean rooms and equipment |
| Application window | 3 years from guidelines issuance (16 September 2026), i.e. up to approx. 15 September 2029 |
| Open now | Implementation guidelines dated 16 September 2026 are open for Pillars 2, 3 and 4 |
| Policy / Scheme | Benefit | Applicability |
|---|---|---|
| Industrial Promotion Policy (2025) | Up to 40%–60% Capital Subsidy on FCI | Large & Mega Units; Expansion, Diversification, Technology Upgradation |
| MSME Development Policy (2025) | 40%–60% subsidy for MSME units in thrust sectors | Food, Pharma, Textile, Apparel, Medical Devices |
| MP Logistics Policy (2025) | Up to 30% of investment, maximum ₹5–75 crore depending on project size. | New logistics & warehousing projects in MP with investment ≥ ₹125 crore, for non-agricultural / industrial goods. |
| MP Export Promotion Policy (2025) | 5% interest subsidy, 50% freight & documentation support, 25% infrastructure aid, ₹10 L RCMC, 10% export incentive. | Large Manufacturing Industries exporting over 25% of their production from Madhya Pradesh. |
| IT, ITeS & ESDM Promotion Policy (2023) | CAPEX Assistance 25%–40% (+2% for women entrepreneurs) | IT/ITeS, ESDM units (new and expansion) |
| Tourism Policy (2024) | 15%–40% capital subsidy & grants | Hotels, Resorts, Heritage Units, Ropeways, Cruises |
The Six Pillars
Semicon 2.0 Pillars and Fiscal Support at a Glance
Your pillar and category decide the support rate and the thresholds you must meet. Fiscal support for the fab and ATMP/OSAT categories is on a pari-passu basis.
| Pillar | Category | Who it is for | Fiscal support |
|---|---|---|---|
| Pillar 1: Design | Categories 1 to 3 | Chip, IP, SoC and module design companies | Strategic design support as per RfP; Design Infrastructure Support and seed funding up to ₹15 crore; DLI of 9% of net sales for 5 years |
| Pillar 2: Machines & Materials | Category 4 | Equipment R&D, raw materials, test facilities and capital equipment makers | 30% of capex (plus PLI of 10% to 2% of BoM value for equipment) |
| Pillar 3: Setting up more Fabs | Categories 5 to 7 | Silicon wafer, compound / photonics / sensors / discrete, and display fabs | 40% of capex (silicon fabs); 35% of capex (compound and display fabs) |
| Pillar 4: ATMP / OSAT | Category 8 | Assembly, testing, marking and packaging units | 35% of capex (advanced packaging); 25% of capex (legacy packaging) |
| Pillar 5: Research & Development | Category 9 | R&D for advanced semiconductor technologies | Up to 75% of project cost (capex + opex), including state incentive |
| Pillar 6: Talent Development | Category 10 | Talent and skilling programmes | Up to 75% of project cost (capex + opex), including state incentive |
| Policy / Scheme | Benefit | Applicability |
|---|---|---|
| Industrial Promotion Policy (2025) | Up to 40%–60% Capital Subsidy on FCI | Large & Mega Units; Expansion, Diversification, Technology Upgradation |
| MSME Development Policy (2025) | 40%–60% subsidy for MSME units in thrust sectors | Food, Pharma, Textile, Apparel, Medical Devices |
| MP Logistics Policy (2025) | Up to 30% of investment, maximum ₹5–75 crore depending on project size. | New logistics & warehousing projects in MP with investment ≥ ₹125 crore, for non-agricultural / industrial goods. |
| MP Export Promotion Policy (2025) | 5% interest subsidy, 50% freight & documentation support, 25% infrastructure aid, ₹10 L RCMC, 10% export incentive. | Large Manufacturing Industries exporting over 25% of their production from Madhya Pradesh. |
| IT, ITeS & ESDM Promotion Policy (2023) | CAPEX Assistance 25%–40% (+2% for women entrepreneurs) | IT/ITeS, ESDM units (new and expansion) |
| Tourism Policy (2024) | 15%–40% capital subsidy & grants | Hotels, Resorts, Heritage Units, Ropeways, Cruises |
Pillar 2
Machines and Materials: 30% of Capex
Equipment R&D
R&D for chip and display equipment and subsystems.
Raw Materials
Front-end and back-end materials such as wafers, photomasks, photoresists, substrates, chemicals, gases and display glass.
Testing
Test and characterization facilities.
Capital Equipment
Manufacturing and assembly of tools, refurbished equipment, sub-assemblies and components.
| Sub-vertical | Min. capex | Min. revenue | Fiscal support |
|---|---|---|---|
| (a) R&D: Semiconductor Equipment | ₹300 crore | ₹120 crore | 30% of capex |
| (b) Semiconductor-Grade Raw Materials | ₹50 crore | ₹20 crore | 30% of capex |
| (c) Test & Characterization Facilities | ₹100 crore | ₹40 crore | 30% of capex |
| (d) Equipment / Refurbished Equipment / Components | ₹300 crore | ₹120 crore | 30% of capex + PLI of 10% to 2% of BoM value, ceiling of 50% of eligible capex |
The lowest entry point in the whole scheme is semiconductor-grade raw materials: a minimum capex of ₹50 crore and minimum revenue of ₹20 crore for 30% capex support. Equipment makers are also eligible for a PLI of 10% to 2% of BoM value, with a ceiling of 50% of eligible capex, as stated in the notification. If you already make components or capital equipment for electronics, also see our ECMS advisory page.
Pillar 3
Setting up More Fabs: 35% to 40% of Capex
Pillar 3 covers three fab categories. Each has its own wafer size or capacity requirement, minimum investment and minimum revenue (in one of the past 3 financial years).
Category 5: Silicon Semiconductor Wafer Fabs
| Particular | Details |
|---|---|
| Wafer size | 300 mm silicon semiconductor wafer fabs |
| Min. installed capacity | At least 40,000 wafer starts per month |
| Min. capital investment | ₹20,000 crore |
| Min. revenue (1 of past 3 FYs) | ₹7,500 crore |
| Fiscal support | 40% of capex (pari-passu basis) |
| Policy / Scheme | Benefit | Applicability |
|---|---|---|
| Industrial Promotion Policy (2025) | Up to 40%–60% Capital Subsidy on FCI | Large & Mega Units; Expansion, Diversification, Technology Upgradation |
| MSME Development Policy (2025) | 40%–60% subsidy for MSME units in thrust sectors | Food, Pharma, Textile, Apparel, Medical Devices |
| MP Logistics Policy (2025) | Up to 30% of investment, maximum ₹5–75 crore depending on project size. | New logistics & warehousing projects in MP with investment ≥ ₹125 crore, for non-agricultural / industrial goods. |
| MP Export Promotion Policy (2025) | 5% interest subsidy, 50% freight & documentation support, 25% infrastructure aid, ₹10 L RCMC, 10% export incentive. | Large Manufacturing Industries exporting over 25% of their production from Madhya Pradesh. |
| IT, ITeS & ESDM Promotion Policy (2023) | CAPEX Assistance 25%–40% (+2% for women entrepreneurs) | IT/ITeS, ESDM units (new and expansion) |
| Tourism Policy (2024) | 15%–40% capital subsidy & grants | Hotels, Resorts, Heritage Units, Ropeways, Cruises |
Category 6: Compound Semiconductor / Photonics / Sensors (incl. MEMS) / Discrete Fabs
| Particular | Details |
|---|---|
| Wafer size | Photonics: 100 mm or above; Compound / Discrete: 150 mm or above; Sensors / MEMS: 200 mm or above |
| Min. installed capacity | At least 500 wafer starts per month |
| Min. capital investment | ₹500 crore |
| Min. revenue (1 of past 3 FYs) | ₹200 crore |
| Fiscal support | 35% of capex (pari-passu basis) |
| Policy / Scheme | Benefit | Applicability |
|---|---|---|
| Industrial Promotion Policy (2025) | Up to 40%–60% Capital Subsidy on FCI | Large & Mega Units; Expansion, Diversification, Technology Upgradation |
| MSME Development Policy (2025) | 40%–60% subsidy for MSME units in thrust sectors | Food, Pharma, Textile, Apparel, Medical Devices |
| MP Logistics Policy (2025) | Up to 30% of investment, maximum ₹5–75 crore depending on project size. | New logistics & warehousing projects in MP with investment ≥ ₹125 crore, for non-agricultural / industrial goods. |
| MP Export Promotion Policy (2025) | 5% interest subsidy, 50% freight & documentation support, 25% infrastructure aid, ₹10 L RCMC, 10% export incentive. | Large Manufacturing Industries exporting over 25% of their production from Madhya Pradesh. |
| IT, ITeS & ESDM Promotion Policy (2023) | CAPEX Assistance 25%–40% (+2% for women entrepreneurs) | IT/ITeS, ESDM units (new and expansion) |
| Tourism Policy (2024) | 15%–40% capital subsidy & grants | Hotels, Resorts, Heritage Units, Ropeways, Cruises |
Category 7: Display Fabs
| Particular | OLED (Gen 6 or above) | Micro LED | LCD (Gen 8 or above) |
|---|---|---|---|
| Min. installed capacity | At least 30,000 panels / month | At least 500 sq m panel area / month | At least 60,000 panels / month |
| Min. capital investment | ₹10,000 crore | ₹1,500 crore | ₹10,000 crore |
| Min. revenue (1 of past 3 FYs) | ₹5,000 crore | ₹600 crore | ₹5,000 crore |
| Fiscal support | 35% of capex (pari-passu) | 35% of capex (pari-passu) | 35% of capex (pari-passu) |
| Policy / Scheme | Benefit | Applicability |
|---|---|---|
| Industrial Promotion Policy (2025) | Up to 40%–60% Capital Subsidy on FCI | Large & Mega Units; Expansion, Diversification, Technology Upgradation |
| MSME Development Policy (2025) | 40%–60% subsidy for MSME units in thrust sectors | Food, Pharma, Textile, Apparel, Medical Devices |
| MP Logistics Policy (2025) | Up to 30% of investment, maximum ₹5–75 crore depending on project size. | New logistics & warehousing projects in MP with investment ≥ ₹125 crore, for non-agricultural / industrial goods. |
| MP Export Promotion Policy (2025) | 5% interest subsidy, 50% freight & documentation support, 25% infrastructure aid, ₹10 L RCMC, 10% export incentive. | Large Manufacturing Industries exporting over 25% of their production from Madhya Pradesh. |
| IT, ITeS & ESDM Promotion Policy (2023) | CAPEX Assistance 25%–40% (+2% for women entrepreneurs) | IT/ITeS, ESDM units (new and expansion) |
| Tourism Policy (2024) | 15%–40% capital subsidy & grants | Hotels, Resorts, Heritage Units, Ropeways, Cruises |
Pillar 4
ATMP / OSAT: 25% to 35% of Capex
Category 8 supports setting up Semiconductor Assembly, Testing, Marking and Packaging (ATMP) and Outsourced Semiconductor Assembly and Test (OSAT) facilities.
| Parameter | Advanced Packaging | Legacy Packaging |
|---|---|---|
| Technology focus | 2.5D/3D packaging, Wafer-Level Chip Scale Packaging (WLCSP), heterogeneous integration, advanced substrates | Standard / legacy ATMP / OSAT packaging |
| Min. capital investment | ₹1,000 crore | ₹1,000 crore |
| Min. revenue (1 of past 3 FYs) | ₹200 crore | ₹200 crore |
| Fiscal support | 35% of capex (pari-passu basis) | 25% of capex (pari-passu basis) |
| Policy / Scheme | Benefit | Applicability |
|---|---|---|
| Industrial Promotion Policy (2025) | Up to 40%–60% Capital Subsidy on FCI | Large & Mega Units; Expansion, Diversification, Technology Upgradation |
| MSME Development Policy (2025) | 40%–60% subsidy for MSME units in thrust sectors | Food, Pharma, Textile, Apparel, Medical Devices |
| MP Logistics Policy (2025) | Up to 30% of investment, maximum ₹5–75 crore depending on project size. | New logistics & warehousing projects in MP with investment ≥ ₹125 crore, for non-agricultural / industrial goods. |
| MP Export Promotion Policy (2025) | 5% interest subsidy, 50% freight & documentation support, 25% infrastructure aid, ₹10 L RCMC, 10% export incentive. | Large Manufacturing Industries exporting over 25% of their production from Madhya Pradesh. |
| IT, ITeS & ESDM Promotion Policy (2023) | CAPEX Assistance 25%–40% (+2% for women entrepreneurs) | IT/ITeS, ESDM units (new and expansion) |
| Tourism Policy (2024) | 15%–40% capital subsidy & grants | Hotels, Resorts, Heritage Units, Ropeways, Cruises |
Pillar 1
Design: Seed Funding and a 9% Deployment-Linked Incentive
Pillar 1 supports semiconductor IP, chip, SoC and module design across three categories. For information only: guidelines for Pillar 1 are not open yet, so Bizastra advisory is currently offered for Pillars 2, 3 and 4.
| Category | What it supports | Support |
|---|---|---|
| Category 1 | Design for national importance and strategic priorities | Fiscal support and chip design infrastructure support as per the approved RfP |
| Category 2 | Design for the commercial sector | Design Infrastructure Support (EDA tools, MPW fabrication, IP cores, CSS and post-silicon validation) and Product Design Linked Incentive: seed funding up to ₹15 crore, equity co-investment and royalty financing |
| Category 3 | Deployment-Linked Incentive (DLI) for IPs, chips and SoCs | 9% of net sales for 5 years; maximum ₹30 crore per application; aggregate ceiling of ₹120 crore per company, including group companies |
| Policy / Scheme | Benefit | Applicability |
|---|---|---|
| Industrial Promotion Policy (2025) | Up to 40%–60% Capital Subsidy on FCI | Large & Mega Units; Expansion, Diversification, Technology Upgradation |
| MSME Development Policy (2025) | 40%–60% subsidy for MSME units in thrust sectors | Food, Pharma, Textile, Apparel, Medical Devices |
| MP Logistics Policy (2025) | Up to 30% of investment, maximum ₹5–75 crore depending on project size. | New logistics & warehousing projects in MP with investment ≥ ₹125 crore, for non-agricultural / industrial goods. |
| MP Export Promotion Policy (2025) | 5% interest subsidy, 50% freight & documentation support, 25% infrastructure aid, ₹10 L RCMC, 10% export incentive. | Large Manufacturing Industries exporting over 25% of their production from Madhya Pradesh. |
| IT, ITeS & ESDM Promotion Policy (2023) | CAPEX Assistance 25%–40% (+2% for women entrepreneurs) | IT/ITeS, ESDM units (new and expansion) |
| Tourism Policy (2024) | 15%–40% capital subsidy & grants | Hotels, Resorts, Heritage Units, Ropeways, Cruises |
Pillars 5 and 6
R&D and Talent Development: Up to 75% of Project Cost
For information only: guidelines for Pillars 5 and 6 are not open yet, so Bizastra advisory is currently offered for Pillars 2, 3 and 4.
| Pillar | Category | Fiscal support |
|---|---|---|
| Pillar 5: Research & Development | Category 9: R&D for advanced semiconductor technologies | Up to 75% of project cost (capex + opex), including state incentive |
| Pillar 6: Talent Development | Category 10: Talent development | Up to 75% of project cost (capex + opex), including state incentive |
| Policy / Scheme | Benefit | Applicability |
|---|---|---|
| Industrial Promotion Policy (2025) | Up to 40%–60% Capital Subsidy on FCI | Large & Mega Units; Expansion, Diversification, Technology Upgradation |
| MSME Development Policy (2025) | 40%–60% subsidy for MSME units in thrust sectors | Food, Pharma, Textile, Apparel, Medical Devices |
| MP Logistics Policy (2025) | Up to 30% of investment, maximum ₹5–75 crore depending on project size. | New logistics & warehousing projects in MP with investment ≥ ₹125 crore, for non-agricultural / industrial goods. |
| MP Export Promotion Policy (2025) | 5% interest subsidy, 50% freight & documentation support, 25% infrastructure aid, ₹10 L RCMC, 10% export incentive. | Large Manufacturing Industries exporting over 25% of their production from Madhya Pradesh. |
| IT, ITeS & ESDM Promotion Policy (2023) | CAPEX Assistance 25%–40% (+2% for women entrepreneurs) | IT/ITeS, ESDM units (new and expansion) |
| Tourism Policy (2024) | 15%–40% capital subsidy & grants | Hotels, Resorts, Heritage Units, Ropeways, Cruises |
Which Pillar Fits You?
Match Your Project to the Right Pillar
You make chemicals, gases, wafers, substrates or display glass
Pillar 2 (raw materials): 30% of capex from a ₹50 crore capex and ₹20 crore revenue threshold.
You make or refurbish semiconductor equipment, tools or components
Pillar 2 (capital equipment): 30% of capex plus a PLI of 10% to 2% of BoM value, from ₹300 crore capex.
You plan a test or characterization lab
Pillar 2 (testing): 30% of capex from ₹100 crore capex and ₹40 crore revenue.
You plan a packaging (ATMP / OSAT) unit
Pillar 4: 35% (advanced) or 25% (legacy) of capex, from ₹1,000 crore capex.
You plan a fab
Pillar 3: 40% for 300 mm silicon fabs, 35% for compound, photonics, sensor, discrete and display fabs.
How We Help
How Bizastra Handles Your Semicon 2.0 Application
Map and Assess
We map your project to the right open pillar (2, 3 or 4) and category and check it against the minimum capex, revenue and capacity thresholds.
Structure and File
We structure eligible capex across plant and machinery, building, utilities, clean rooms and equipment, and prepare the application under the current guidelines.
Follow Up and Disburse
We manage queries, compliance and CA certification through to disbursement of your fiscal support.
Why BizAstra
CA-Led Scheme Advisory, End to End
Right pillar, right category
Semicon 2.0 has six pillars and ten categories. Choosing the correct one decides your rate and thresholds, so we confirm it first.
Threshold check before you commit
We test your capex, revenue and capacity plans against the minimums before you place equipment orders.
Stacking with other schemes
We work across central schemes such as ECMS and the RDI Fund, so we can see where your project fits best.
CA certification in-house
Capex statements and certifications are handled by our own CA team, which keeps your file clean and fast.
Check If Your Semiconductor Project Qualifies
Send us your project details and our team will confirm your pillar, category and thresholds, and the fiscal support you can claim under Semicon 2.0.
Common Questions
Semicon 2.0: Common Questions Answered
What is Semicon 2.0 (ISM 2.0)?
Semicon 2.0 is the Scheme for Development of Semiconductor Design and Manufacturing Ecosystem in India, the second phase of the India Semiconductor Mission. The policy is effective from 31 August 2026 and has a total outlay of Rs 1,27,500 crore. It supports semiconductor design, manufacturing, packaging, R&D and talent development through six pillars, with fiscal support ranging from a 9% deployment-linked incentive for chip design to 25% to 40% of eligible capital expenditure for fabs, packaging units and machines and materials makers.
How long is the Semicon 2.0 application window?
The application window is 3 years from the issuance of the guidelines on 16 September 2026, that is up to approximately 15 September 2029. Implementation guidelines dated 16 September 2026 are currently open for Pillars 2, 3 and 4.
What are the six pillars of Semicon 2.0?
Pillar 1 covers Design, Pillar 2 Machines and Materials, Pillar 3 Setting up more Fabs, Pillar 4 Further Strengthening the ATMP/OSAT Industry, Pillar 5 Research and Development, and Pillar 6 Talent Development.
How much support do semiconductor fabs get under Semicon 2.0?
Silicon semiconductor wafer fabs (300 mm) get 40% of eligible capex, with a minimum capital investment of Rs 20,000 crore, capacity of at least 40,000 wafer starts per month and revenue of Rs 7,500 crore. Compound semiconductor, photonics, sensors (including MEMS) and discrete fabs get 35% of capex with a minimum investment of Rs 500 crore. Display fabs (OLED, Micro LED and LCD) also get 35% of capex. Fiscal support is on a pari-passu basis.
What support do semiconductor equipment and materials makers get?
Under Pillar 2, Category 4, eligible units get 30% of capex. Minimum thresholds are Rs 50 crore capex and Rs 20 crore revenue for semiconductor-grade raw materials, Rs 100 crore capex and Rs 40 crore revenue for test and characterization facilities, and Rs 300 crore capex and Rs 120 crore revenue for equipment R&D and for equipment, refurbished equipment and components. Equipment makers also get a PLI of 10% to 2% of BoM value, with a ceiling of 50% of eligible capex.
What is the support for ATMP and OSAT facilities?
Under Pillar 4, Category 8, advanced packaging units (2.5D/3D, wafer-level chip scale packaging, heterogeneous integration and advanced substrates) get 35% of capex, and legacy packaging units get 25% of capex. Both need a minimum capital investment of Rs 1,000 crore and minimum revenue of Rs 200 crore in one of the past 3 financial years.
What support is available for chip design companies?
Under Pillar 1, commercial chip design applicants can get Design Infrastructure Support (access to EDA tools, MPW fabrication, IP cores and post-silicon validation) and the Product Design Linked Incentive with seed funding of up to Rs 15 crore, equity co-investment and royalty financing. The Deployment-Linked Incentive pays 9% of net sales for 5 years, up to Rs 30 crore per application and Rs 120 crore per company including group companies. Guidelines for Pillar 1 are not open yet; currently only Pillars 2, 3 and 4 are open.
What capital expenditure is eligible under Semicon 2.0?
Eligible capex covers plant and machinery, building, associated utilities, clean rooms and equipment.