Semiconductors: India to have 3 more plants at Rs. 1.26 trillion investment
Virendra Pandit
New Delhi: With the Union Cabinet, headed by Prime Minister Narendra Modi, approving proposals to set up three more fabrication plants to manufacture semiconductors, key to most of the state-of-the-art technologies, India will soon enter the microchip revolution under the Make in India drive.
Two of these new plants will be set up in Gujarat and one in Assam. Two large American companies are part of the Assam plant.
Besides these three projects, US chip giant Micron is setting up a plant in Sanand, Gujarat.
These units are expected to generate 26,000 direct advanced technology jobs and about 100,000 indirect jobs, said Union Electronics and Information Technology Minister Ashwini Vaishnaw.
The Union Cabinet on Thursday approved Rs 1.26 trillion worth of investments in setting up three semiconductor fabrication plants, including Tata Electronics’ proposal to build India’s first major chip fabrication facility at Dholera in Gujarat.
The Modi government also cleared a separate Tata proposal for a chip assembly plant in Morigaon, Assam, and another by CG Power in Sanand, Gujarat. The work on all three projects is expected to begin in the next four months.
Tata Electronics’ proposed semiconductor fabrication unit in Dholera, in partnership with Powerchip Semiconductor Manufacturing Corp (PSMC), Taiwan, will involve an investment of Rs 91,000 crore (USD 11 billion) and is expected to create 20,000 direct and indirect skilled jobs.
The plant, projected to have a capacity of 50,000 wafer starts per month (WSPM), will manufacture high-performance computing chips with 28nm technology.
“One wafer can have roughly 5,000 chips in it. So, practically this unit will produce around 3 billion chips in a year,” said Vaishnaw, at a press conference after the Cabinet meeting.
The chips produced at the Dholera facility will cater to eight broad sectors, including high-power computing, electric vehicles, telecom, defense, consumer electronics, automobile, and power electronics, he said.
“A typical semiconductor fabrication timeline for production is 3 to 4 years. But we will try to compress it. India has already developed the assembly, testing, marking, and packaging (ATMP) technology.”
Vaishnav said subsidies worth Rs 59,000 crore had already been given out of a total of Rs 76,000 crore earmarked for the four plants, including Micron’s, under the India Semiconductor Mission. “Eight states have shown interest in setting up semiconductor manufacturing facilities.”
Apart from the Dholera plant, Tata Semiconductor Assembly and Test (TSAT) will set up a semiconductor plant in Morigaon, Assam, with an investment of Rs 27,000 crore that will generate 27,000 direct and indirect jobs.
“Two American conglomerates are a part of the Assam plant, and a majority of the production from the facility will be exported,” Vaishnaw said.
N Chandrasekaran, Chairman of Tata Sons, said: “We are in a unique time for the electronics manufacturing market globally. The world is seeking a more secure and resilient electronics supply chain. With our semiconductor fab and this strategic project in semiconductor assembly and testing, we will be enabling our global customers to base a key part of their semiconductor value chain in India.”
The third approval is for CG Power’s proposal, in partnership with Renesas Electronics Corporation, Japan, and Stars Microelectronics, Thailand. They will set up a semiconductor unit in Sanand, Gujarat, with an investment of Rs 7,600 crore.
CG Power said the three companies will subscribe in one or more tranches to the equity capital of the JV company. CG Power will have the highest stake at 92.34 percent for an investment of USD 205 million, followed by Renesas at 6.76 percent (USD 15 million investment), and Stars at 0.9 percent (USD 2 million).
Renesas is a leading semiconductor company focused on specialized chips. It operates 12 semiconductor facilities and is an important player in microcontrollers, analog, power, and system-on-chip (SoC) products. The plant will have a capacity of 15 million chips per day.
About the Dholera plant, Randhir Thakur, CEO & MD of Tata Electronics, said: “Our partnership with PSMC provides access to a broad technology portfolio in leading edge and mature nodes, including 28nm, 40nm, 55nm, 90nm, and 110nm, and also collaboration for high volume manufacturing.”
Frank Hong, Chairman of PSMC, said: “The semiconductor industry presents a large and growing opportunity, which India is uniquely placed to capture. The country has a growing domestic demand and global customers are also looking at it for supply chain resilience. There could not have been a better time for India to enter the semiconductor manufacturing industry. This partnership has the potential to redefine the contours of global semiconductor manufacturing and we are looking forward to collaboration with Tata Electronics.”
TSAT is developing indigenous advanced semiconductor packaging technologies, including flip chip and ISIP (Integrated System In Package). The Assam plant will have a capacity of 48 million chips per day.
