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India's new semiconductor projects

 Prime Minister Narendra Modi virtually laid the foundation stone for three semiconductor projects worth approximately Rs 1.25 trillion. These projects are set to transform India into a global semiconductor hub, driving economic growth and fostering innovation in the country.




The Three Semiconductor Projects

1.Dholera Special Investment Region (DSIR) in Gujarat

  • Semiconductor fabrication facility
  • Investment: Rs 91,000 crore
  • Expected to commence chip production by 2026
  • Established by Tata Electronics Private Limited (TEPL) in partnership with Taiwan’s Powerchip Semiconductor Manufacturing Corporation (PSMC)
  • Powered by renewable energy
  • Dedicated water supply from Narmada river canal

2.Morigaon, Assam

  • Outsourced Semiconductor Assembly and Test (OSAT) facility
  • Investment: Rs 27,000 crore
  • Developed by Tata Electronics Private Limited (TEPL)
  • Will cater to electric vehicles, automotive, mobile phones, and power devices

3.Sanand, Gujarat

  • Outsourced Semiconductor Assembly and Test (OSAT) facility
  • Investment: Rs 7,500 crore
  • Set up by CG Power and Industrial Solutions Limited under the Modified Scheme for Semiconductor Assembly, Testing, Marking and Packaging (ATMP)
All three projects are being incentivised under the India Semiconductor Mission, which has an outlay of Rs 76,000 crore. This mission aims to position India as a prominent global centre for semiconductor design, manufacturing, and technology development.




Employment Opportunities

These semiconductor facilities are expected to generate numerous employment opportunities for India’s youth. The Dholera facility alone is estimated to create around 20,000 skilled jobs, both directly and indirectly. The Morigaon plant is expected to generate 27,000 direct and indirect jobs.


Dholera Plant Details

The Dholera plant, jointly established by Tata Group and Taiwan’s Powerchip Semiconductor Manufacturing Corporation (PSMC), is projected to have its inaugural chip ready for production by the end of 2026. The plant will begin by manufacturing 28 nanometer chips and is expected to have a total capacity of 50,000 wafer starts per month (WSPM).




The chips produced at the Dholera facility will cater to eight broad sectors:

  • High-power computing
  • Electric vehicles
  • Telecom
  • Defence
  • Consumer electronics
  • Automobile
  • Power electronics

India’s semiconductor program: Progress report

Modern technology is built on semiconductor chips, which are used to power everything from expensive drones and self-driving cars to cellphones. At present, the majority of the semiconductor manufacturing market is dominated by Taiwan, China, the United States, South Korea, and Japan.

With the launch of these three units, India can position itself as a global hub for chip manufacturing.

In the interim 2024 Union Budget, India increased the allocation for the scheme to support semiconductor and display manufacturing by 130 percent to INR 690.3 million (US$83.28 million). As per the finance documents produced by the central government, the revised estimate of expenditure for the ‘Modified Programme for Development of Semiconductors and Display Manufacturing Ecosystem in India’ in FY24 is INR 150.3 million (US$18.14 million).

Under is program, fiscal incentive of 50 percent of the project cost is available to companies/consortia/ joint ventures for setting up of semiconductor fabs in India of any node size (including mature nodes). Similarly, a fiscal incentive of 50 percent of the project cost is available for setting up of display fabs of specified technologies in India.

The application window for the semiconductor schemes are open till December 2024, including the Design Linked Incentive (DLI) Scheme. So far, India has received 26 applications under the DLI scheme, and five applications have been granted approval.




Given India’s strengths in chip design, the newly approved units will promote the development of chip fabrication capabilities, supporting homegrown packaging technology advancements. The change is expected to create new employment opportunities in addition to expanding semiconductor production capacity. As per the central government’s estimate, the three new units will directly affect 20,000 high-tech positions and indirectly create an additional 60,000 jobs.

India now has four semiconductor manufacturing facilities after the inclusion of the three new units. Prominent American chip company Micron has committed to invest up to US$825 million to build a facility in India for the assembly and testing of semiconductor chips. It plans to open a production facility at the Sanand plant in Gujarat in early 2025 for assembling and testing cutting-edge D-RAM and Nand products.

With Micron’s investment spread over two years, the project is estimated to generate 15,000 community employment and 5,000 direct jobs in coming years. Making use of the government’s “Modified Assembly, Testing, Marking, and Packaging (ATMP) scheme,” Micron will get fiscal help from the central government for 50 percent of the project cost, with an additional 20 percent coming from the Gujarat state government. Up to US$2.75 billion is anticipated to be invested jointly by Micron and the two governments for the two project phases.


Government Support

Government subsidies from both central and state authorities are anticipated to cover up to 70 per cent of the Dholera project expenses, making it India’s premier commercial semiconductor fab, a longstanding goal of the government.


Partnerships and Collaborations

The Tata Group is actively seeking partnerships with Taiwanese firms for its semiconductor facilities. They are in discussions with UMC Group and Powerchip Semiconductor Manufacturing Corporation for the Dholera plant.

Overall, these projects signify a major stride towards positioning India as a prominent global center for semiconductor design, manufacturing, and technology development, with the potential to drive economic growth and innovation in the country.

know more about India's semiconductor mission here

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