Govt approves three semiconductor plants; Investment pegged at Rs 1.26 lakh crore

In a big move for a resilient domestic semiconductor ecosystem, the cabinet today approved the establishment of three semiconductor plants. The plants - two in Gujarat and one in Assam - will see a total investment of Rs 1.26 lakh crore.

Chips from these facilities will be used for various applications including automobiles, phones and consumer electronics, in the domestic market as well as for exports.

The construction of the three new plants – one semiconductor fab, and two semiconductor assembly, testing, monitoring and packing (ATMP) units – will start within 100 days.

India’s first semiconductor plant with an investment of USD 2.75 billion is being constructed by US-based Micron Technology in Sanand, Gujarat. The first chip from this assembly and test facility is expected to be rolled out by December 2024.

“In Micron’s case, the construction began within 90 days after the approval. Similarly, we expect the construction of these three plants to start within 100 days,” Minister of Electronics & Information Technology Ashwini Vaishnaw said in a cabinet briefing today.

Tata Electronics Pvt Ltd will set up a semiconductor fab, in partnership with Powerchip Semiconductor Manufacturing Corp (PSMC), Taiwan, in Dholera, Gujarat, with an investment of Rs 91,000 crore.

The plant, which will make high-performance computer chips with 28 nm technology and power management chips for use in applications such as electric vehicles, telecom, and consumer electronics, will have a capacity of 50,000 wafers per month. One wafer contains around 5,000 chips.

CG Power will set up another semiconductor ATMP plant for specialised chips in Sanand, Gujarat, in partnership with Renesas Electronics Corporation, Japan, and Stars Microelectronics, Thailand.

This facility will see an investment of Rs 7,600 crore. The plant will have a capacity of 15 million chips per day and will be used for consumer, industrial, automotive and power applications.

Meanwhile, Tata Semiconductor Assembly and Test Pvt Ltd will set up a semiconductor ATMP unit in Morigaon, Assam with an investment of Rs 27,000 crore.

This plant will have a capacity of 48 million chips per day and the chips will be used in electric vehicles, consumer electronics, telecom, and automotive applications.

The semiconductor plants will be developed under the government’s program for the development of semiconductors and display manufacturing ecosystems. The program, which offers financial incentives for setting up semiconductor units, was notified in 2021 with a total outlay of Rs 76,000 crore.

The government will provide a total incentive of around Rs 59,000 crore for the four plants, including the Micron plant, the minister said.

When asked about the timeline for the construction of the plants, the minister said: “A typical semiconductor fab construction takes 3-4 years. We will be compressing it significantly, as you have seen in the case of Micron, where the construction got compressed to less than 36 months.”

Design, fabrication and ATMP are the three parts of the semiconductor value chain. India already has capabilities to design chips and has developed ATMP technology, while this new project is expected to ensure that the country has fabrication technology as well.

“Semiconductors are going to be manufactured on a large scale, and these made-in-India chips will used in top automotive markets globally,” the minister added.