With new fabrication and packaging facilities advancing towards production, semiconductor firms backed by India’s incentive programme are preparing for a surge in major investments.
Semiconductor companies approved under the Indian Semiconductor Mission (ISM) are expected to invest a cumulative ₹312.99 billion by FY27, according to estimates by the Ministry of Electronics and Information Technology (MeitY). The projected figure represents nearly one-fifth of the approximately ₹1.65 trillion investment commitment associated with projects approved under the scheme.
According to a report by the Business Standard, investment activity gained momentum after the programme began to take shape in FY25, when Micron Technology began deploying capital for its assembly, testing, marking, and packaging (ATMP) facility in Sanand, Gujarat.
By the end of FY26, five semiconductor companies had collectively invested ₹15,799 crore, with MeitY projecting an additional ₹155 billion in FY27.
Under the ISM framework, participating companies contribute roughly half of project costs, while the central government provides support through incentives. State governments also contribute financial assistance for approved projects.
During FY25 and FY26, companies invested ₹56.92 billion directly into their projects, with the remaining support coming through central and state government contributions. The participating firms include Micron, CG Power, Kaynes Semicon, and two Tata Group projects, a semiconductor fabrication facility in Dholera, Gujarat, and an outsourced semiconductor assembly and test (OSAT) facility in Assam.
Micron has already commenced commercial production, while Kaynes Semicon has also begun operations. CG Power is expected to start commercial production in July, and the Tata Group’s Assam OSAT facility is scheduled to become operational by the end of the year.
Government estimates indicate that companies will invest around ₹70 billion in FY27, with a significant share directed towards purchasing and installing manufacturing equipment, which accounts for roughly 65 per cent of plant costs.
The Tata fabrication facility, with an investment commitment of about ₹910 billion, represents the largest project under the programme and accounts for more than half of the total committed investment. The facility is expected to be completed in 2028.
MeitY is also preparing an expanded ISM 2.0 programme, reportedly with an outlay of around ₹1 trillion, aimed at strengthening the semiconductor supply chain and supporting domestic raw-material and equipment ecosystems.
