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Finance ministry has cleared a ₹1.25 lakh crore outlay for India Semiconductor Mission

ICICIdirect Research 01 Jul 2026 DISCLAIMER

News: Finance ministry has cleared a ₹1.25 lakh crore outlay for India Semiconductor Mission (ISM) 2.0, which will now be placed before the Union Cabinet for final approval. The proposed allocation is significantly higher than the ₹76,000 crore under ISM 1.0 and expands the incentive framework beyond fabs and packaging to the entire semiconductor value chain, including chip design, equipment, materials, specialty chemicals, industrial gases, PCBs/substrates, MSMEs and ancillary suppliers

View: ISM 2.0 marks a structural shift from incentivising only semiconductor manufacturing to developing a complete domestic semiconductor ecosystem, which should accelerate localisation, reduce import dependence and attract higher private investments across upstream and downstream segments. The expanded scope is positive for companies investing in semiconductor materials, packaging, PCB/substrate manufacturing and chip design. Among listed players, Kaynes Technology, Amber Enterprises, Syrma SGS Technology, Dixon Technologies, MosChip Technologies, etc. are well positioned to benefit from the broader incentive framework, particularly as the scheme now targets equipment, materials, design IP and resilient supply chains in addition to fabs and OSAT facilities.

Impact: Positive

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