India’s semiconductor sprint: ISM 2.0 to back 50 startups, manufacture 3-nm chips by 2032

INdia’s IT government minister Ashwini Vaishnaw on tues set come out an challenging roadmap for India’s semiconductor push, saying the government plans to support at least 50 fabless chip companies in the next phase of the India Semiconductor Mission (ISM), also called ISM 2.0, by scaling up the Design Linked Incentive (DLI) Scheme, with the long-term goal of producing “one AMD” and “one Qualcomm” out of the country.Fabless chip companies design and sell chips that are produced by specialised foundries.A ministry of electronics and Information Technology (MeitY) official said on condition of anonymity that ISM 2.0 will be announced in three months after the government finalises its structure , including funding, incentives for fabless startups, a sharper focus on advanced design, and a roadmap to achieve 3-nanometre and 2-nanometre technology nodes.The first phase of ISM, announced in 2021-end, had an outlay of ₹76,000 crore, which currently has 10 projects under construction, with four expected to begin chip production this year.India will soon be able to manufacture 180-nanometre chips at SCL Mohali, while more advanced nodes down to 28 nanometres being enabled through the upcoming fabrication facility at Tata-PSMC plant in Dholera, Gujarat. By 2032, India has goals to manufacture 3 nanometer (nm) chips, said Vaishnaw, adding that India is studying the paths taken by Taiwan, South Korea and Japan to help get there. Node refers to a chip generation, with those with lower nm having more transistors in the same or smaller area.Speaking at a semiconductor chip design startup event in New Delhi, Vaishnaw said ISM was shaped by three broad ideas given by Prime Minister Narendra Modi: building the full ecosystem, taking a long-term view, and moving India from a services economy to a product nation.He said the government expected just five startups under DLI in the first phase of ISM but ended up with 24, adding that many startups have already taped out (finalised the design of) chips, validated products and found markets. All startups selected under the DLI scheme made presentations to the minister on Tuesday, updating him on the progress of their chip design projects. These startups have attracted nearly ₹430 crore in venture capital funding, with 14 of the 24 participating firms having already secured private investment.Based on his conversations with global industry leaders at the World Economic Forum in Davos, Vaishnaw said India’s credibility in semiconductors has changed dramatically in just a few years. He recalled that in 2022, when India spoke about manufacturing semiconductors, the idea was met with skepticism, while 2023 saw a more cautious response. By 2024, people had begun to take note, and in 2025, the mood had shifted to recognition that India had done something significant.This year at Davos, he said, industry leaders were actively asking what they could do to be part of India’s journey, adding that there is now a clear belief that India will become a major semiconductor nation. The minister said that by 2029, India will have the capability to design and manufacture chips required for nearly 70-75% of domestic applications. By 2035, India aims to be among the top semiconductor nations globally, he said.Six core chip systemsThe minister said India will now focus on six major chip system categories to build a complete design ecosystem, and that different permutations of these would account for nearly 80% of the manufacturing that India can do on its own. The six categories are high-performance compute, radio frequency (RF), networking, power management, sensors and memory.“These six major categories will encourage our startups, academia, and industry to come up with new ideas, thoughts and solutions,” he said, adding that these capabilities would allow the country to design chips for defence, automobiles, railways, space and industrial applications, and eventually manufacture 70-75% of the major electronics it needs domestically.India had also set a target of training 85,000 semiconductor professionals in 10 years, and has trained 67,000 in four years, said the minister, adding, “I can say with a high level of confidence that in the coming years, practically 50% of all semiconductor design work in the world will be done in India.”Vaishnaw also announced a new Deep Tech Awards programme starting this year, which will recognise startups and companies working in areas such as semiconductors, artificial intelligence, biotechnology, space and other deep-tech sectors. He said the first round of the awards will be announced towards the end of the year.