Three Indian semiconductor plants are now in commercial production; ISM 2.0 approved with Rs 1,27,500 crore outlay

At a press conference on 18 August 2026 announcing the fifth edition of SEMICON India, MeitY Secretary S Krishnan declared that three major semiconductor facilities approved under the first phase of the India Semiconductor Mission have entered commercial production — Micron, Kaynes and CG Semi, all located at Sanand in Gujarat. The Prime Minister inaugurated the first of these on 28 February 2026, with two more following, and Krishnan projected that five to six projects would be in commercial production by the end of the calendar year. These are the concrete outputs of ISM 1.0, which approved twelve projects worth a combined Rs 1.64 lakh crore across Gujarat, Assam, Uttar Pradesh, Punjab, Odisha and Andhra Pradesh.

The most strategically significant item in the pipeline is the Tata-Powerchip fabrication plant at Dholera, Gujarat. The Rs 91,000 crore facility is designed for 50,000 wafers a month on the 28-nanometre node and targets its first chip in December 2026. If it delivers, it will be the first plant to actually fabricate silicon on Indian soil rather than assembling and packaging imported chips — the step that converts India's semiconductor programme from back-end activity into front-end fabrication, the segment with the deepest strategic value.

Alongside the production milestones, the government signalled the next policy phase. The Union Cabinet approved ISM 2.0 on 15 July 2026 with an outlay of Rs 1,27,500 crore — against Rs 76,000 crore for the first phase — and extended the programme's timeline from five years to twelve, a change designed for capital projects that take years to build. The second phase widens coverage across six areas: chip design, machines and materials, fabrication units, assembly, testing and packaging with a focus on advanced packaging, research and development in fields such as silicon photonics and power semiconductors, and talent development. Krishnan said the notification for ISM 2.0 would be issued shortly.

The announcement also fixed the date for SEMICON India 2026, themed 'Silicon to Systems: Building the Ecosystem'. PM Modi will hold a roundtable with global semiconductor chief executives on 16 September and inaugurate the two-day conference and exhibition at Yashobhoomi in New Delhi on 17 September. More than 500 exhibitors, 150 speakers, delegations from over 40 countries and six country pavilions are expected, including ASML, Applied Materials, Lam Research, Tokyo Electron, Infineon, Micron, Tata Electronics, NXP and IBM Research. The government's stated ambition is to double India's domestic semiconductor demand from $100 billion to $200 billion and place India among the world's top five chip ecosystems by 2029.

What makes this a signal rather than another policy announcement is the shift in evidentiary weight. ISM 1.0 is no longer a portfolio of approvals and memorandum of understanding ceremonies — three facilities are shipping commercial product today, and the fabrication frontier (Tata-Powerchip) is months away from first silicon. The doubling of the outlay in ISM 2.0 and the extension of the programme to twelve years indicate the government has moved from seeding the industry to underwriting a multi-decade build-out. The test to watch is whether the Dholera fab achieves its December 2026 first-chip target and whether ISM 2.0's notification translates cabinet approval into signed projects.

Milestones at a glance

• ISM 1.0 approvals — 12 projects, Rs 1.64 lakh crore, six states (Delivered).
• Commercial production — Micron, Kaynes, CG Semi (Sanand, Gujarat) (Live since Feb 2026).
• First silicon fabrication — Tata-Powerchip, Dholera — Rs 91,000 crore, 50,000 wafers/month, 28nm (Targeting Dec 2026).
• ISM 2.0 — Rs 1,27,500 crore outlay, 12-year timeline (Cabinet approved 15 Jul 2026).
• SEMICON India 2026 — CEO roundtable 16 Sep; inauguration 17 Sep, Yashobhoomi (Confirmed).

The Techadyant view

The doubling of the outlay and the extension to twelve years tell you what the government has actually decided: ISM 1.0 was the seed round. ISM 2.0 is the conviction that India's chip industry is now a national industrial project, not a policy experiment. — Techadyant Labs analysis

Two constraints deserve attention. The first is talent: India already accounts for roughly 20 per cent of the world's chip design engineers, but scaling from a deep design bench to a full manufacturing workforce is the harder step, and Krishnan's framing of India as a potential fabrication-talent exporter for the rest of the world is an early signal of how the government intends to close it. The second is sequencing: the CEO roundtable on 16 September puts the government's pitch directly in front of the firms it is courting for fabs and advanced packaging, and its outcomes will determine whether ISM 2.0's money converts into signed projects beyond the Gujarat cluster.

What to watch

Two dated tests. First, the Tata-Powerchip first-chip milestone in December 2026 — fab yields at 28nm on Indian soil are the single most checkable proof point of the whole programme, and any slippage will be read globally as a verdict on India's fabrication readiness. Second, the ISM 2.0 notification and its first signed projects: the twelve-year timeline only matters if projects beyond the Gujarat cluster begin to transact. The CEO roundtable on 16 September is the earliest window for announcements.

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