Golden Opportunity: Modi Opens SEMICON India 2026 as ISM 2.0 Doubles to $13.5B — Applied Materials Pledges $5B, Lam Builds India's First Component Plant

On Thursday, September 17, 2026, Prime Minister Narendra Modi inaugurated SEMICON India 2026 at Yashobhoomi in New Delhi — the fifth edition of the country’s flagship semiconductor conference, and the first since the launch of the India Semiconductor Mission (ISM) 2.0. Executives from more than 600 companies across 52 countries filled the hall, including ASML, Applied Materials, Lam Research, Teradyne, Tokyo Electron, Infineon, NXP, IBM Research and Merck, alongside Indian players Tata Electronics, Micron and CG Power.

Modi’s message was blunt: global chip supply chains are being weaponized, and the world needs new, trusted places to make semiconductors. India, he said, should seize what he called a “golden opportunity” to build those capabilities — pointing to the country’s 7.8% quarterly GDP growth, a recent credit-rating upgrade from a Japanese agency, and the New Delhi Declaration adopted at the BRICS summit as evidence that India is arriving on the global stage.

ISM 2.0: from $8 billion to $13.5 billion

The policy centerpiece of the event is Phase 2 of the India Semiconductor Mission. The new phase carries an outlay of ₹1.27 lakh crore — roughly $13.5 billion over 12 years, up from $8 billion in Phase 1. Crucially, ISM 2.0 broadens what the government will subsidize: where Phase 1 focused heavily on fabrication plants, the new phase extends support to chip design, chemicals, specialty gases, materials and talent development. New rules also let foreign firms partner directly with Indian startups and design houses.

The timing is not accidental. India still imports close to 90% of its semiconductor needs, and the AI boom has turned advanced chips into a strategic resource that major powers increasingly treat as leverage. Modi noted that building semiconductor capability has historically taken decades, but argued India has developed design, manufacturing, equipment, materials and testing capabilities in parallel rather than sequentially.

Phase 1 provides the scoreboard. Twelve semiconductor projects were approved with a combined investment of ₹1.64 lakh crore, and three of them have already begun commercial production. Twenty-four design projects received support under the Design Linked Incentive Scheme, and 105 startups and MSMEs received EDA tool assistance. India also joined the US-led “Pax Silica” coalition of trusted partners on semiconductors and critical minerals earlier this year — a geopolitical alignment that now underwrites the sales pitch Modi made on stage.

The money follows the policy

The biggest corporate commitments of the day came from the equipment side of the industry — the layer of the supply chain that actually builds the machines fabs run on.

Applied Materials announced a $5 billion investment in India over the next decade, anchored by a 140-acre research park. The announcement was made by Dr. Prabu Raja, President of Applied Materials’ Semiconductor Products Group, on the eve and opening day of the event. For a company whose process equipment sits inside nearly every advanced fab on earth, a decade-long, multi-billion-dollar India program is a bet that the country’s chip ecosystem is durable enough to justify deep local R&D infrastructure — not just a sales office.

Lam Research committed ₹10,000 crore (roughly $1.1–1.2 billion) to build India’s first semiconductor silicon component manufacturing unit, with COO Varadarajan making the announcement at the event. The facility will also expand Lam’s India R&D footprint. Components — the precision silicon parts that go inside etch and deposition chambers — are a less glamorous but strategically vital segment, and localizing them gives India a foothold in the equipment supply chain rather than only its downstream.

Tata Electronics signed 16 supplier memoranda of understanding at the event, and CEO Randhir Thakur said the company has already created 1.5 lakh (150,000) direct jobs, with women making up 65% of the workforce across its plants.

Production is already happening

Two domestic players — CDIL Semicon and Suchi Semicon — separately announced the start of commercial production at their facilities during the event. And Micron’s CEO Sanjay Mehrotra offered perhaps the most striking datapoint of the day: the company’s Sanand facility, which began commercial production last year, already exceeds the memory demand of the entire laptop market.

Infineon, meanwhile, said its Indian workforce has grown 28% over the past year — evidence that the talent side of the ecosystem is scaling along with the capital.

On skills, Electronics and IT Minister Ashwini Vaishnaw said the government has trained 70,000 of a targeted 85,000 semiconductor engineers, and is now raising the goal to 100,000.

Why it matters

The AI infrastructure race has made one thing clear over the past two years: compute is the bottleneck, and the countries and companies that control chip supply chains hold the leverage. The US has restricted advanced exports; China is building a self-sufficient stack through Huawei’s Ascend line; and Europe, Japan and the Gulf states are all writing checks for fabs.

India’s play is different. Rather than competing head-on for leading-edge logic fabs — a game that costs $20–30 billion per facility and decades of process know-how — ISM 2.0 spreads its $13.5 billion across the whole stack: design (where India’s engineering workforce is already strong), packaging and assembly (where Micron’s Sanand plant operates), specialty materials and gases, and now equipment components via Lam. The foreign direct investment announced this week — Applied Materials’ $5B and Lam’s ₹10,000 crore — lands precisely in the equipment and R&D segments Delhi wants to cultivate.

The open questions are familiar. Phase 1’s three commercial productions are real but modest against a $200 billion market the government says it is targeting. Power, water and precision infrastructure remain hard constraints. And global chip demand is cyclical — a downturn in 2027–28 could test whether the commitments announced this week survive contact with quarterly earnings.

But as a single-day snapshot, SEMICON India 2026’s opening delivered what policy launches rarely do: concurrent commitments from two of the world’s three largest equipment makers, commercial production announcements from domestic players, and a doubling of the national mission’s budget — all framed around a geopolitics of “trusted supply chains” that India did not create, but intends to exploit.