Highlights
- The Finance Ministry's Expenditure Finance Committee has cleared a proposal for a Rs 1.25 lakh crore outlay under India Semiconductor Mission 2.0, which now awaits final Union Cabinet approval.
- The proposed allocation is significantly higher than the Rs 76,000 crore committed under the first phase of the mission.
- Companies involved in semiconductor assembly, testing and design, including Kaynes Technology (NSE:KAYNES), CG Power (NSE:CGPOWER) and MosChip Technologies (NSE:MOSCHIP), are being tracked as potential participants in the expanded programme.
- Twelve semiconductor manufacturing projects have already been approved under the mission, with an investment pipeline of about Rs 1.64 lakh crore.
India's push to build a domestic semiconductor manufacturing and design ecosystem has reached a fresh milestone, with the Finance Ministry's Expenditure Finance Committee clearing a proposal for a Rs 1.25 lakh crore outlay under India Semiconductor Mission 2.0. The proposal will now be placed before the Union Cabinet for final approval. The allocation, announced as part of the Union Budget for 2026-27, is aimed at strengthening the country's semiconductor value chain across manufacturing equipment, specialised materials, indigenous intellectual property, chip design capabilities and resilient supply chains. The development has renewed investor interest in a clutch of listed companies with exposure to India's expanding chip ecosystem.
Why Investors Are Watching
The scale of the proposed allocation marks a substantial step-up from the first phase of the mission, which had earmarked Rs 76,000 crore. Investors are watching the development closely because it signals continued and expanding policy support for a sector where India has historically been almost entirely dependent on imports. Companies with existing or planned exposure to semiconductor assembly, testing and design in India, including Kaynes Technology (NSE:KAYNES), which is building an outsourced semiconductor assembly and test facility in Gujarat, and CG Power (NSE:CGPOWER), part of a consortium that has secured approval for a similar facility, are being tracked as potential beneficiaries of the expanded mission. Chip design-focused firms such as MosChip Technologies (NSE:MOSCHIP), which works across application-specific integrated circuits, systems-on-chip, field-programmable gate arrays and embedded systems, are also drawing attention as India seeks to build design capacity alongside manufacturing.
Market Context
The renewed policy push comes at a time when global semiconductor supply chains are being closely watched amid geopolitical uncertainty and shifting trade dynamics between major economies. Under the mission so far, twelve semiconductor manufacturing projects have been approved, with a combined investment pipeline of approximately Rs 1.64 lakh crore, spanning one semiconductor fabrication unit, two compound semiconductor fabrication units and nine packaging units. On the design side, twenty-four projects are being supported under the Design Linked Incentive Scheme, 105 companies have received assistance in accessing advanced chip design tools, and twenty-three design tapeouts have been completed at various foundries. The first batch of made-in-India chips is expected to begin rolling out from facilities in Gujarat during 2026, a milestone that market participants view as an important proof point for the broader mission.
What Market Participants Will Monitor
Going forward, investors are likely to track the timeline for final Cabinet approval of the Rs 1.25 lakh crore outlay, along with the specific incentive structures that emerge for manufacturing equipment, specialised materials and design services under the expanded mission. Execution milestones at existing approved projects, including progress on outsourced semiconductor assembly and test facilities in Gujarat, will also be closely watched, as will any additional project approvals or fresh investment announcements tied to the mission. Commentary from company managements on order pipelines, capacity utilisation plans and revenue visibility linked to semiconductor-related contracts is expected to be a key input for how the market values this theme over the coming quarters.
Industry or Peer Perspective
The semiconductor theme spans a diverse set of companies with different points of exposure, ranging from electronics manufacturing services providers moving into assembly and testing, to dedicated chip design firms, to larger diversified industrial groups participating through joint ventures and consortiums. This diversity means the mission's expansion is likely to be viewed differently across the investor base depending on each company's specific role in the value chain, whether in packaging, testing, design services or raw material and equipment supply. Peer comparisons within this space remain evolving, given that several of the underlying projects are still in early stages of execution rather than full commercial production.
Conclusion
The clearance of a larger outlay for India Semiconductor Mission 2.0 by the Expenditure Finance Committee represents an incremental but notable step in the country's broader effort to localise chip manufacturing and design capacity. With final Cabinet approval still pending and several underlying projects at varying stages of execution, the coming months are likely to bring further clarity on how the expanded mission translates into concrete investment and production milestones for companies operating across India's semiconductor ecosystem.
FAQs
Q: Why is the company in focus today?
A: Kaynes Technology (NSE:KAYNES), CG Power (NSE:CGPOWER) and other semiconductor ecosystem companies are in focus after the Finance Ministry's Expenditure Finance Committee cleared a Rs 1.25 lakh crore proposal for India Semiconductor Mission 2.0, which now awaits Union Cabinet approval.
Q: What factors are investors monitoring?
A: Investors are watching the timeline for final Cabinet clearance, the incentive structure for manufacturing, design and materials under the expanded mission, and execution progress at existing approved semiconductor assembly, testing and design projects.
Q: Which peer companies are relevant?
A: Companies relevant to this theme include MosChip Technologies (NSE:MOSCHIP), which focuses on chip design services, alongside Kaynes Technology and CG Power, which are involved in semiconductor assembly and testing facilities in India.
Q: Is this article investment advice?
A: No. This article is intended solely for informational purposes and should not be considered investment, financial or trading advice.