India Approves Semiconductor Projects Worth $15.2 bn Ahead of General Election

India’s Union Cabinet has offered approval for setting up three semiconductor fabrication (fab) units. These units, slated to commence construction within the next 100 days, are expected to create a substantial employment boost, generating 20,000 direct jobs in advanced technology and approximately 60,000 indirect employment opportunities.
BE SemiconductorsIndia will be heading for a general election within the next 3-4 months. Prime Minister Narendra Modi is aiming to retain his position in Indian politics by securing a third term for the ruling BJP.

HIGHLIGHTS

# India okays three semiconductor fabrication (fab) units
# To generate 20,000 direct jobs
# To create 60,000 indirect employment opportunities
# Tata Electronics- PSMC from Taiwan to invest Rs 91,000 crore in Gujarat
# Tata Semiconductor Assembly and Test will invest Rs 27,000 crore in Assam
# CG Power-Renesas Electronics- Stars Microelectronics will invest Rs 7,600 crore in Gujarat

The foremost among these units is a semiconductor fab boasting a monthly capacity of 50,000 wafers, which will be established in Dholera, Gujarat, through a collaboration between Tata Electronics and Powerchip Semiconductor Manufacturing Corp (PSMC) from Taiwan.

With an investment outlay of Rs 91,000 crore, Union IT Minister Ashwini Vaishnaw emphasized the significance of this venture, which will primarily focus on producing high-performance compute chips utilizing 28 nm technology, along with power management chips catering to a spectrum of industries including electric vehicles (EVs), telecom, defense, automotive, consumer electronics, display, and power electronics.

In another strategic move, Tata Semiconductor Assembly and Test (TSAT) will spearhead the establishment of a semiconductor assembly, testing, monitoring, and packing (ATMP) unit in Morigaon, Assam. This facility, with a daily capacity of 48 million, will receive an investment injection of Rs 27,000 crore and will specialize in advanced semiconductor packaging technologies such as flip chip and ISIP (integrated system in package), catering to sectors spanning automotive, EVs, consumer electronics, telecom, and mobile phones.

The third unit, dedicated to specialized chips, will be established in Sanand, Gujarat, by CG Power in collaboration with Renesas Electronics, Japan, and Stars Microelectronics, Thailand. With a daily capacity of 15 million, this unit will be infused with an investment of Rs 7,600 crore and will focus on manufacturing chips for consumer, industrial, automotive, and power applications.

Rajeev Chandrasekhar, Union Minister of State for Electronics and IT, highlighted India’s attractiveness for investment in the semiconductor sector, disclosing proposals worth over Rs 2.5 lakh crore, encompassing packaging, design, and research and development. He emphasized the nation’s commitment to fostering a conducive environment for technological innovation and economic growth.

This development comes on the heels of US-based Micron Technology’s initiation of construction on a facility worth Rs 22,500 crore in Sanand, Gujarat, last September, signaling a landmark moment in India’s semiconductor journey.

Industry stakeholders have welcomed the Union Cabinet’s nod for the establishment of these semiconductor units under the India Semiconductor Mission. S.P. Kochhar, Director General of COAI, lauded the decision as a positive and commendable step forward.

However, despite the shifting investments in the semiconductor industry away from China, analysts from Moody’s Analytics suggest that Asia will remain the epicenter of electronics production for the foreseeable future. According to their report, Taiwan and South Korea lead the world in advanced chip production, with the US and Europe contributing less than 10 percent to the global chip supply.

Baburajan Kizhakedath