India, July 16 -- The Union Cabinet's approval of the Rs.1.27 lakh crore India Semiconductor Mission 2.0 broadens the government's chip push from the fab to the ecosystem around it. Six pillars now cover chip design, machines and materials, more fabs, advanced packaging, research and development, and the design-engineer pipeline the world is a million short of. Silicon photonics and advanced-node research qualify for support of up to 75%. This is the structural correction ISM 1.0 needed.

That correction comes with unusual candour about limits. The ecosystem, officials said, must first stabilise at 28nm - a mature node accounting for around 70% of global chip demand and running everything from cars to power grids. The advanced range of 7-...