On Thursday, the Union Cabinet approved the setting up of three semiconductor fabrication plants (Fabs) worth $15.2 billion in India. This includes the Tata Group’s proposal to build the first major chipmaking facility in the country.
Dholera Chipmaking Facility
The proposal has been accepted under the programme for “Development of Semiconductors and Display Manufacturing Ecosystems in India,” which was announced in 2021. All three units will start construction within the next 100 days.
Tata Electronics Private Limited (TEPL) will build an $11 billion Fab along with Powerchip Semiconductor Manufacturing Corp (PSMC), Taiwan, in Dholera, Gujarat. PSMC will provide technology and execution support for the facility. The unit will have a capacity of 50,000 wafers (an initial form of silicon chips) per month.
Union cabinet approves 3 semiconductor units under the India Semiconductor Mission. A giant leap towards realising PM Shri @narendramodi Ji’s vision of "Make in India, Make for the World".#CabinetDecision pic.twitter.com/NAtE48rInt
— Ashwini Vaishnaw (@AshwiniVaishnaw) February 29, 2024
This will be India’s first AI-enabled state-of-the-art Fab, and it will produce high-performance chips with 28 nm technology and power management chips for electric vehicles, telecom, defence, and automotive and consumer electronics, among other sectors. It will generate over 20,000 direct and indirect skilled jobs in the region.
The announcement to set up the Fab was made by N Chandrasekaran, Chairman of Tata Sons, at the 20th Vibrant Gujarat Global Summit in January this year.
Semiconductor Assembly Unit in Morigaon, Sanand
The Cabinet also approved the setting up of a semiconductor assembly and test unit in Assam’s Morigaon by Tata Semiconductor Assembly and Test Pvt Ltd (TSAT). The $3 billion plant will have a capacity of 48 million per day and will be beneficial for automotive, electric vehicles, consumer electronics, telecom, and mobile phones, among other things.
Minister of Electronics and Information Technology Ashwini Vaishnaw told reporters that the technology partners in this unit have been kept confidential upon request.
Additionally, the government has greenlighted a project by Crompton Greaves (CG) Power, in partnership with Japan’s Renesas Electronics Corporation and Thailand’s Stars Microelectronics, to set up a semiconductor unit in Sanand, Gujarat, to produce specialized chips. The chip facility will have a daily production capacity of 15 million chips.
India Aims to Become Semiconductor Hub
“With the Cabinet approval of 3 semiconductor units under the India Semiconductor Mission, we are further strengthening our transformative journey towards technological self-reliance,” PM Narendra Modi said in a post on X after the announcement.
Earlier in 2023, US-based Micron had announced the setting up of a semiconductor plant in Gujarat’s Sanand. An Israeli firm, Tower Semiconductor, has also proposed $9 billion to establish a plant in the country. In 2021, India announced a $10 billion incentive programme for the development of a sustainable semiconductor and display ecosystem in India.
Microchips have become the modern world’s equivalent of oil by becoming intrinsic to military, economic and geopolitical strength. With the US, China and other major powers involved in a “chip war” and investing heavily in domestic chip capacity, India is also planning to become a leading semiconductor manufacturing hub. Investments like these will play a significant role in establishing a semiconductor ecosystem in India.