Business News: India has given approval for the construction of three semiconductor plants, signaling an investment of over $15 billion, in a move to position the country as a significant hub for semiconductor manufacturing.

KEY POINTS:

• India aims to become a significant hub for semiconductor manufacturing, similar to the U.S., Taiwan, and South Korea.
• The India Semiconductor Mission has achieved four notable successes in a short time, contributing to the establishment of the semiconductor ecosystem in India.
• Micron received approval in June 2023 to establish a semiconductor unit in Sanand, Gujarat, as part of India’s efforts to attract foreign companies to set up semiconductor operations in the country.

The government of India emphasizes that the country already possesses significant capabilities in chip design and aims to develop further capabilities in chip fabrication. With the establishment of semiconductor plants, the focus will extend to the indigenous development of advanced packaging technologies within India. This move aligns with India’s aspirations to become a major player in the global semiconductor industry, echoing the capabilities of countries like the U.S., Taiwan, and South Korea.

India’s ambitions to become a major chip hub are aligned with global leaders in the semiconductor industry such as the U.S., Taiwan, and South Korea. To achieve this goal, India has been actively seeking to attract foreign firms to establish semiconductor operations within the country. The recent approvals for semiconductor plants and partnerships with key players indicate a strategic push to strengthen India’s position in the semiconductor ecosystem.

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

Tata Electronics is set to collaborate with Taiwan’s Powerchip Semiconductor Manufacturing Corp (PSMC) for the construction of a semiconductor fabrication plant in Dholera, Gujarat. The investment for this project is estimated to be nearly $11 billion (Rs. 91,000 crore). PSMC is known for offering chip design and manufacturing services, particularly in the logic and memory segments.

The partnership is a significant step toward advancing India’s capabilities in chip fabrication and establishing a semiconductor ecosystem within the country. PSMC, with its expertise and experience, is expected to contribute to the success of this venture.

The semiconductor fabrication plant in Dholera, Gujarat, will primarily focus on mature 28-nanometer technology. This technology is relevant to various industries, including automobiles, consumer electronics, and defense. Tata Semiconductor Assembly and Test Pvt Ltd, in collaboration with Powerchip Semiconductor Manufacturing Corp (PSMC), is spearheading this initiative with an investment of nearly $11 billion.

Additionally, a second plant is set to be established in Morigaon, Assam, by Tata Semiconductor Assembly and Test Pvt Ltd, with an investment of $3.26 billion. This facility will concentrate on developing indigenous advanced semiconductor packaging technologies for automotive, electric vehicles (EVs), and consumer electronics segments, including flip chip and integrated system in package technologies.

CG Power, in collaboration with Renesas Electronics Corporation of Japan and Stars Microelectronics of Thailand, is set to establish the third semiconductor factory in Sanand, Gujarat. This facility will specialize in producing chips for consumer, industrial, automotive, and power applications, with an investment of nearly $1 billion (Rs 7,600 crore). All three factories, including those by Tata Electronics and Tata Semiconductor Assembly and Test Pvt Ltd, are expected to commence construction within the next 100 days.

The establishment of these semiconductor units is a significant achievement for India’s Semiconductor Mission, contributing to the establishment of the semiconductor ecosystem in the country. These projects are anticipated to generate 20,000 advanced technology jobs and around 60,000 indirect jobs. The move aligns with global chip manufacturers’ efforts to diversify operations amid geopolitical uncertainties, presenting opportunities for countries like India.