🗞️ Why in News Union Budget 2026-27 allocated Rs 1,000 crore to India Semiconductor Mission 2.0 (ISM 2.0) while the foundation stone of India’s first Quantum Valley was laid in Amaravati, Andhra Pradesh — both signalling India’s push to become a strategic technology manufacturer rather than merely a technology consumer.
India Semiconductor Mission — From ISM 1.0 to ISM 2.0
ISM 1.0 — Building the Foundation (2021–2025)
India Semiconductor Mission (ISM) was launched in December 2021 under the India Semiconductor Mission — a specialised body within MeitY (Ministry of Electronics and Information Technology). The scheme carried a Rs 76,000 crore incentive outlay providing up to 50% fiscal support for semiconductor fabrication units, display fabs, and compound semiconductors.
ISM 1.0 achievements:
- 10 projects approved worth Rs 1.60 lakh crore across 6 states
- Key approved units:
- Tata Electronics — semiconductor fab in Dholera Special Investment Region, Gujarat (N28 node; 50,000 wafers/month capacity)
- CG Power (Renesas/STARS Microelectronics JV) — ATMP (Assembly, Testing, Marking, Packaging) unit in Sanand, Gujarat
- Micron Technology — ATMP unit in Sanand, Gujarat — India’s first semiconductor facility under ISM
- Kaynes Semicon — ATMP unit in Sanand, Gujarat
- Zetwerk Electronics facility (Rs 100 crore) inaugurated in Bengaluru by MeitY Minister Ashwini Vaishnaw — equipped with SMT (Surface Mount Technology) and FATP (Final Assembly, Testing and Packing) lines
India’s semiconductor market grew from $38 billion (2023) to $45–50 billion (2024-25) and is projected to reach USD 100–110 billion by 2030.
ISM 2.0 — The Next Phase (2026 Budget)
Budget 2026-27 allocated Rs 1,000 crore for ISM 2.0. Additional allocation: Modified Programme for Display Manufacturing received Rs 8,000 crore for 2026-27.
ISM 2.0 targets:
- 70–75% semiconductor self-sufficiency by 2029
- Capability for 3nm/2nm chip fabrication by 2035 (currently, India’s approved fabs target 28nm–65nm nodes — sufficient for automotive, IoT, defence applications)
- Expanded ATMP and design ecosystem to support the broader chip supply chain
Why Semiconductors Are a Strategic Priority
Semiconductors are the oil of the 21st century — every electronic device, defence system, telecommunications network, and AI system depends on chips. India currently imports 95%+ of its semiconductor requirements.
The vulnerability was exposed during the 2020–2022 global chip shortage — caused by COVID-19 supply chain disruptions — which halted automobile production, delayed smartphone launches, and revealed how dependent India’s entire manufacturing sector is on a handful of global foundries (primarily TSMC in Taiwan and Samsung in South Korea).
Geopolitical risk: Taiwan produces ~92% of the world’s most advanced chips. Any conflict in the Taiwan Strait would be catastrophic for India’s technology supply chains. Atma Nirbharta in semiconductors is therefore a national security imperative, not merely an industrial policy.
India’s First Quantum Valley — Amaravati
What Was Inaugurated
The foundation stone of India’s first Quantum Valley was laid at Uddandarayunipalem village, Thullur mandal, Amaravati, Andhra Pradesh by Union Minister Dr. Jitendra Singh (Minister of State, PMO/Science & Technology) and AP CM N. Chandrababu Naidu.
Key infrastructure:
- 133-qubit quantum computer centre — among the largest planned quantum computing facilities in Asia outside China and Japan
- Partners: IBM (quantum hardware), TCS (software/integration), L&T (construction/infrastructure), C-DOT (communications), C-DAC (HPC/quantum research), SRM University (academic partnership)
- Completion timeline: August 2026 (main complex), December 2026 (quantum computer operational)
Quantum Computing — The Technology Context
Classical computers use bits (0 or 1). Quantum computers use qubits — which, through quantum superposition, can represent 0 and 1 simultaneously. This enables exponentially greater computational power for specific problem classes:
- Cryptography: Breaking or creating encryption systems
- Drug discovery: Simulating molecular interactions for pharmaceutical research
- Financial modelling: Portfolio optimisation and risk analysis
- Logistics: Route optimisation (travelling salesman class problems)
- AI/ML training: Accelerating neural network optimisation
The 133-qubit system positions India to work on real-world quantum advantage problems — the threshold where quantum computers definitively outperform classical ones for certain applications is estimated at around 100–1000 qubits depending on the application.
India’s National Quantum Mission (NQM), launched in April 2023 with a Rs 6,003.65 crore outlay (2023-31), provides the policy framework within which the Amaravati Quantum Valley operates. NQM targets:
- 50–1,000 physical qubit systems within 8 years
- Quantum communication over 2,000 km
- Satellite-based quantum key distribution (QKD)
WISER Quantum Talent Hub
WISER Quantum Talent Hub aims to train 35 lakh students by 2035 — addressing the severe global talent shortage in quantum computing, where demand currently far exceeds supply of qualified researchers and engineers.
India’s Position in the Global Quantum Race
- USA: IBM, Google, Microsoft leading; IBM achieved 1,121-qubit system in 2023
- China: Aggressively investing; Origin Quantum produced 72-qubit Wuyuan processor
- EU: €1 billion Quantum Flagship programme
- India: 133-qubit Amaravati centre + NQM positions India as a credible mid-tier quantum power
The Semiconductor-Quantum Nexus
Both ISM 2.0 and Quantum Valley Amaravati represent India’s recognition that the commanding heights of the 21st-century economy are in technology manufacturing, not just technology services. India has built a world-class IT services industry (USD 200+ billion in FY25 exports) but remains dependent on foreign hardware.
The strategy is three-layered:
- Near-term (by 2029): ATMP facilities and 28nm fabs reduce chip import dependency for defence, automotive, and IoT sectors
- Medium-term (by 2035): Advanced fabs (3nm/2nm) and quantum computing infrastructure establish India in the global technology supply chain
- Long-term: India as a technology exporter — not just of software but of hardware, chips, and quantum systems
UPSC Relevance
Prelims: ISM 1.0 launch year (2021), Rs 76,000 crore outlay, ISM 2.0 Rs 1,000 crore (Budget 2026-27), 10 projects Rs 1.60 lakh crore, Tata Electronics (Dholera), Micron (Sanand), ISM target 70-75% self-sufficiency by 2029, 3nm/2nm by 2035, Quantum Valley (Amaravati/Thullur), 133-qubit, NQM (Rs 6,003.65 crore, April 2023), WISER 35 lakh students, MeitY, C-DAC, C-DOT.
Mains GS-3: Semiconductor strategy; quantum computing policy; Make in India in strategic industries; technology supply chain security; NQM objectives; India-Taiwan chip dependency risk.
📌 Facts Corner — Knowledgepedia
India Semiconductor Mission:
- ISM 1.0 launched: December 2021; outlay: Rs 76,000 crore (50% fiscal support)
- Approved projects: 10 worth Rs 1.60 lakh crore across 6 states
- Key units: Tata Electronics (Dholera, Gujarat); Micron/CG Power/Kaynes (Sanand, Gujarat)
- ISM 2.0 Budget 2026-27: Rs 1,000 crore; Display Manufacturing: Rs 8,000 crore
- India semiconductor market: $45–50B (2024-25) → projected $100–110B by 2030
- Self-sufficiency target: 70–75% by 2029; advanced fab (3nm/2nm): by 2035
- India currently imports: 95%+ of semiconductor requirements
Quantum Valley — Amaravati:
- Location: Uddandarayunipalem, Thullur, Amaravati, Andhra Pradesh
- Quantum computer: 133 qubits (operational: Dec 2026)
- Partners: IBM, TCS, L&T, C-DOT, C-DAC, SRM University
- WISER Talent Hub: 35 lakh students by 2035
National Quantum Mission (NQM):
- Launched: April 2023; Outlay: Rs 6,003.65 crore (2023-2031)
- Target: 50–1,000 qubit systems within 8 years; Quantum communication: 2,000 km
- Satellite-based QKD (Quantum Key Distribution) included
Semiconductor Technology Nodes:
- ISM 1.0 fabs: 28nm–65nm (automotive, IoT, defence grade)
- Global leaders: TSMC (Taiwan) ~92% of most advanced chips; Samsung (South Korea)
- Global chip shortage (2020-22): COVID-triggered; revealed India’s 95%+ import dependency
C-DAC = Centre for Development of Advanced Computing; C-DOT = Centre for Development of Telematics SMT = Surface Mount Technology; FATP = Final Assembly, Testing and Packing ATMP = Assembly, Testing, Marking, and Packaging (semiconductor back-end process)
Sources: Drishti IAS, AffairsCloud