The Union Cabinet on Thursday approved three semiconductor proposals totalling ₹1,25,600 crore, and to be located at Dholera and Sanand in Gujarat, and Morigaon in Assam.
The Dholera and Morigaon facilities will be built by Tata Electronics Pvt. Ltd. and Tata Semiconductor Assembly and Test Pvt. Ltd. The former will be India’s first full-fledged fabrication unit producing 50,000 ‘wafer starts,’ the initial form of silicon chips, per month.
The announcement marks a milestone in India’s efforts to kickstart a semiconductor ecosystem because while most of the current investments through government subsidies and Productivity-Linked Incentive schemes have only yielded less sophisticated packaging plants that rely on raw and intermediate material from other sources, fabrication is a more fundamental, expensive and technologically expensive domain. The announcement also reflects growing pressures on global electronics supply chains to diversify away from China, into markets like India and Vietnam.
Powerchip Semiconductor Manufacturing Corporation of Taiwan will be the technology partner for the fab unit, while the assembly and testing unit in Morigaon’s technology partners have been kept confidential at their request, Minister of Electronics and Information Technology Ashwini Vaishnaw told reporters.
The Dholera units will be used to make “high performance compute chips with 28 nanometre technology,” and also to make chips for power management, which Mr. Vaishnaw said accounted for a large part of semiconductor demand. Both facilities’ output will cater to domestic demand as well as export their produced chips, Mr. Vaishnaw said.
Construction will start within 100 days, he added, hoping that the work is done well before the standard 5 year timeline for such facilities. The chip assembly facility by Micron, announced last year, is on track to have its first chip produced by December 2024, Mr. Vaishnaw said. The facilities announced on Thursday will create 20,000 direct jobs and 60,000 indirect jobs, the IT Ministry estimated in a note.
The facility in Sanand will also be a packaging unit, set up by CG Power with technology from the Renesas Electronics Corporation of Japan and Stars Microelectronics of Thailand.
