India boosts chip ambitions, okays plants with $15 billion in investments

India has approved building three semiconductor plants with investments of more than $15 billion as the country aims to become a major chip hub.

“India already has deep capabilities in chip design. With these units, our country will develop capabilities in chip fabrication. Advanced packaging technologies will be indigenously developed in India,” according to a government statement on Thursday.

India has ambitions to become a major chip hub on the lines of the U.S., Taiwan and South Korea, and has been courting foreign firms to set up operations in the country.

Tata Electronics will partner Taiwan’s Powerchip Semiconductor Manufacturing Corp to build one of the fabrication plants in Dholera, Gujarat, with an investment of nearly $11 billion (Rs.91,000 crore), according to the statement.

PSMC provides chip design and manufacturing services in the logic and memory segments. It has six semiconductor foundries in Taiwan.

The factory will focus on the mature 28-nanometer technology, namely in industries such as automobiles, consumer electronics and defense. Mature technology refers to processes involved in making 28-nanometer or larger chips — generally considered legacy chips.

Tata Semiconductor Assembly and Test Pvt Ltd will set up the second plant in Morigaon, Assam, with an investment of $3.26 billion (Rs.27,000 crore), to develop “indigenous advanced semiconductor packaging technologies including flip chip and integrated system in package technologies” for automotive, EVs and consumer electronics segments.

CG Power, in partnership with Japan’s Renesas Electronics Corporation and Thailand’s Stars Microelectronics will set up the third factory in Sanand, Gujarat, specializing in chips for consumer, industrial, automotive and power applications. It will see an investment of nearly $1 billion (Rs 7,600 crore).

All three factories will start construction within next 100 days.

India in June 2023 had approved Micron for setting up a semiconductor unit in Sanand, Gujarat.

“Within a very short time, India Semiconductor Mission has achieved four big successes. With these units, the semiconductor ecosystem will get established in India,” the government said.

These factories will directly create 20,000 advanced technology jobs and about 60,000 indirect jobs.

Global chip manufacturers have been looking to diversify operations amid geopolitical uncertainty, which stands to benefit countries such as India.

Taiwan Semiconductor Manufacturing Company, the world’s largest contract chip maker, most recently opened a new plant in Japan as the country is attempting to boost its lagging chip-manufacturing industry.