During the “India’s Techade: Chips for Viksit Bharat” event, Prime Minister Narendra Modi inaugurated three semiconductor facilities, signaling a monumental step towards chip manufacturing in India. With the government subsidizing approximately 70% of the costs, this ambitious project aims to establish India as a leading hub for silicon fabrication. The investment from the Indian government exceeds Rs. 1.25 lakh crore across these three semiconductor plants.
Tata Electronics Private Limited (TEPL) is establishing the inaugural commercial semiconductor fab in Dholera, Gujarat. Collaborating with Taiwan’s Powerchip Semiconductor Manufacturing Corporation (PSMC), Tata aims to establish the fabrication facility.
According to a report by The Economic Times, PSMC will facilitate technology transfer to India, enabling TEPL to commence production of 28nm chips by the end of 2026. The facility is poised to advance to producing 22nm chips in the subsequent years. PSMC, ranked as the 7th largest semiconductor foundry globally, will play a pivotal role in this endeavor.
At the outset, the facility will produce chips catering to microcontrollers, power management ICs, wireless devices, automotive chips, and other applications. Tata has outlined an ambitious strategy and has appointed Randhir Thakur, former president of Intel Foundry Services, as TEPL’s CEO.
The company has additionally enlisted Srinivas Satya, the Country President of Applied Materials India, to serve as TEPL’s chief supply chain officer. The government’s investment in this facility amounts to approximately Rs. 91,000 crore.
In addition, TEPL will establish another semiconductor plant in Morigaon, Assam, with an investment of nearly Rs. 27,000 crore.
The third semiconductor fab, located in Sanand, Gujarat, will be established by CG Power and Industrial Solutions. This initiative will receive a government investment of Rs. 7,500 crore. These facilities will primarily focus on semiconductor assembly, testing, marking, and packaging (ATMP).
Although India’s semiconductor manufacturing sector is still in its early stages, the country has the potential to expedite its growth through international investments, partnerships between industry and academia, and governmental backing. As per a BBC report, India boasts approximately 20% of the world’s leading talent in chip design. Major companies such as Intel, AMD, and Qualcomm leverage the local engineering expertise through their R&D facilities in India.
With the establishment of a domestic semiconductor foundry, India has the potential to emerge as a significant player akin to South Korea, Taiwan, Japan, and China in the global semiconductor industry. It’s worth mentioning that India has recently reduced import duties on smartphones, contributing to its steady ascent as one of the world’s leading exporters of electronics.
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